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Monday, May 10, 2021

$ 900 billion, a growth in consumer spending to buy online after Covid-19 … How has the Middle East been affected?

Covid-19 has raised consumer spending in the electronic retail sector by $ 900 billion globally after the epidemic changed the behavior of people who had to stay at home and prompted them to boost online purchases.

The percentage of e-commerce out of total retail sales in the Middle East and Africa increased to 4.6% during the height of the pandemic, compared to 2.2% before the crisis.

The UAE witnessed an increase in consumer spending online during the year 2020, mainly driven by the increase in the number of electronic stores by 21% year-on-year, in addition to the increase in the number of e-commerce partners by 44% compared to 2019, according to the “Recovery Visions: E-Commerce” report issued by Master Card.

Covid-19 has accelerated the shift to e-commerce spending in markets such as the UAE and the United States, which have already started promoting digital transformation, along with countries that were in the early stages of the digital transformation of retail, such as Egypt and Brazil.

The online purchase rate of people residing in Saudi Arabia increased by 33% over the average over the past year, and the levels of electronic purchase in the UAE increased by 21%, in Russia by 29%, and in the United Kingdom by 22%.

E-commerce accounted for approximately one dollar out of every five dollars spent on retail, last year, while it was a dollar of every seven dollars spent in 2019, as e-commerce represented a lifeline for the retail sector. Face-to-face interaction, fearing the spread of the epidemic.

The report predicts that between 20% and 30% of the shift in online shopping related to Covid-19 will be permanent, even after the epidemic subsides.

Core retail sectors such as grocery, which held the smallest digital share before the crisis, saw some of the biggest gains as consumers adapted to buying online.

Two-thirds of online purchases in Saudi Arabia are made through websites based in the Gulf region instead of global platforms such as American Amazon and Chinese Alibaba, while Egyptians who shop online prefer Arab websites, according to a recent report issued last month by UNCTAD titled “Covid-” 19 and e-commerce. ”

E-commerce sales in the Middle East and Africa are currently stable at 2.4% of retail sales in the region after Covid-19 caused it to rise to 4.6% during the height of the epidemic, while it was at 2.2% before the crisis.

The proportion of e-commerce from retail sales in Europe increased to 11.6% during the height of the epidemic, compared to 7.5% before the crisis and 8.5% now.

E-commerce represented 11% of retail sales in the United States before the spread of Covid-19, but it rebounded to represent 22% at the height of the epidemic, to currently settle at 17%.

The proportion of e-commerce from retail sales in the United Kingdom increased to 31.3% during the spread of Covid-19, compared to 21.8% before the outbreak of the epidemic, when it stabilized at 24.1% during the current period.

Global consumer spending on e-commerce rebounded by 25-30% during the outbreak – from March 2020 to February 2021, in a year-on-year comparison, as the volume of sales increased and the number of different countries in which shoppers placed electronic orders.

The report suggested that groceries will be at the top of the sectors that will continue to benefit from the digital transformation in the field of e-commerce during the coming period, as only 7% of global grocery stores have electronic stores, but with the spread of Covid-19, the sector has rebounded. For example, a fifth of online grocery store shopping is currently taking place, as a result of pandemic-related closures.

The share of e-commerce in total global retail trade increased from 14% in 2019 to 17% in 2020, due to the digital transformation that Covid-19 has promoted, according to the United Nations Conference on Trade and Development (UNCTAD).

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