Gold rush in the Middle East, heavyweight release of the 2023 Cross-border E-commerce White Paper for the Middle East!
Exciting news! The 2023 Cross-border E-commerce White Paper for the Middle East is being released during a gold rush in the region
The Middle East cross-border e-commerce market presents unprecedented activity and prosperity with its increasingly young population and growing purchasing power, providing broad market opportunities for global businesses to go overseas.
On May 30th, in order to better help merchants seize this emerging market, Shoplazza, together with Baidu International MediaGo, Dealfy, MaBang Technology, Payssion and SaleSmartly, conducted in-depth insight and analysis of the Middle East cross-border e-commerce market and massive data, and officially released the “Growth New Power of Independent Station – 2023 Middle East Cross-border E-commerce White Paper” (hereinafter referred to as “White Paper”).
This white paper focuses on the Middle East cross-border e-commerce market, deeply analyzes the current market situation, looks forward to future development trends, insight into the outbound opportunities in the Middle East region, and proposes a comprehensive solution for merchants facing challenges and problems in market development, helping Chinese businesses achieve success in the Middle East cross-border e-commerce market.
The cross-border market in the Middle East is booming.
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The cross-border e-commerce market in the Middle East is rising rapidly. According to the International Trade Administration’s forecast, its market value will reach nearly $70 billion by 2023. This development is mainly driven by three key factors: young population structure, high Internet penetration rate, and government policy support.
According to World Bank data, the total population of the Middle East region has reached 454 million, of which more than half are the main consumer groups of cross-border e-commerce and mobile e-commerce. On this basis, a nearly 100% Internet penetration rate provides even more market space for cross-border e-commerce.
In addition, the Middle East region, as a key area for the implementation of China’s “One Belt One Road” initiative, has brought more opportunities for cross-border merchants. As of January 2020, China has signed cooperation agreements with all Middle Eastern countries to jointly build the “One Belt One Road”.
With a younger population, increased internet penetration, and government support policies, consumers in the Middle East are increasingly inclined towards online shopping, and cross-border e-commerce provides them with a broader and more diverse range of shopping choices.
****Independent websites leading the new wave in the Middle East** **
Currently, the Middle Eastern e-commerce market has several major players, including Souq (now Amazon Middle East), Noon, Namshi, etc. However, for Chinese merchants, the entry threshold is high, and self-entering the Middle Eastern market faces certain difficulties. Independent websites, which are more flexible in their operation and more conducive to the precipitation of private traffic, are gradually becoming a new choice for Chinese merchants to tap the Middle Eastern market.
Convenient and fast: independently set up stores and quickly enter the market
Through independent websites, Chinese merchants can independently set up stores and quickly enter the Middle Eastern market by using templates to build their website, without high threshold qualifications.
Flexible operation: low-cost operation, free development
Independent websites provide merchants with flexible operational space. They can customize personalized business strategies and marketing methods, reduce operating costs, quickly adapt to market changes, and achieve free development.
Precipitation of private traffic: establish solid assets and achieve repeat purchases
Independent websites allow merchants to communicate directly with customers before, during, and after sales, providing personalized services and customized membership systems, thereby creating a solid private traffic, increasing repeat purchase rates and loyalty.
With the advantages of convenience, flexibility, and the accumulation of private domain provided by independent stations, whether small start-ups or medium and large enterprises, they can achieve breakthroughs and brilliant achievements in the cross-border markets of the Middle East.
**Exclusive Decoding of Cross-Border Marketing in the Middle East**
As the population in the Middle East region becomes increasingly younger, the usage rate of social media has increased significantly in recent years. Middle Eastern users spend an average of 3.5 hours per day on social media and remain active on about 8.4 platforms per person per month.
Baidu International’s global AI-integrated marketing platform MediaGo maintains deep cooperation with Snapchat and TikTok. Based on rich experience in overseas advertising and marketing practices, it has created cross-border marketing solutions for e-commerce brands that adapt to various media, which can meet the different needs of DTC advertisers for brand, effect, conversion and other scenarios.
Snapchat is one of the most popular social applications among millennials and Generation Z in the Middle East. It has a high penetration rate in the Middle East market, and in Saudi Arabia, which has a total population of only 35 million, the number of Snapchat users has exceeded 20 million.
This white paper combines Snapchat with the consumption characteristics of the Middle East market to create a three-step approach for e-commerce brands to go global, which can meet the different needs of overseas advertisers for brand, effect, conversion and other scenarios.
TikTok users in Saudi Arabia and the United Arab Emirates are among the most active in the Gulf Cooperation Council (GCC) countries. According to research data from Statisa and AI technology analysis company HypeAuditor, the penetration rate of TikTok in these two countries will exceed 100% in 2023, and the number of TikTok influencers in the UAE ranks 11th in the world, with an average of 380 videos uploaded per person, which is 46% higher than the global average. The characteristics of TikTok users in the Middle East are interesting, sincere, and have a high acceptance of advertising. They pursue value, convenience, and shopping experiences. Therefore, cross-border merchants need to have a deep understanding of the local culture and implement targeted strategies for this diverse market.
WhatsApp has over 115 million users in the Middle East, and in the six Gulf countries, it is the most widely used service under Meta. On WhatsApp, businesses can adopt a public domain drainage + private domain operation model to achieve marketing cost reduction and efficiency improvement.
For example, customers can be directed to the merchant’s independent landing page through social media operations, and low-cost mass marketing can be achieved through WhatsApp Business API group sending, and with the help of SaleSmartily for batch group management and operation, private domain operation can be realized to increase repurchase rate.
****New Path of Cross-border Logistics in the Middle East****
****Special Characteristics of Middle East Orders****
Compared to other regions, orders in the Middle East have special and complex characteristics. Cash on delivery (COD) is the mainstream logistics mode for cross-border e-commerce exports to the Middle East, but it often faces a series of challenges such as unclear addresses, difficult phone communication, low efficiency of final delivery, and after-sales service problems, especially during Ramadan promotion period. To solve these problems, it is crucial for merchants to introduce order review and management, pre-review abnormal orders, and communicate in real-time.
In order to improve management efficiency, save time and labor costs, using ERP for unified management has become a necessary choice for merchants. By integrating cross-border e-commerce platforms and freight forwarding systems, as well as optimizing logistics operation systems, fine, standardized, and process-oriented order management can be achieved to alleviate the difficulties brought by the complexity of Middle East orders.
****Challenges of Cross-border Logistics in the Middle East****
Cross-border logistics in the Middle East faces many challenges, such as logistics timeliness, customs clearance issues, and distribution problems. The timeliness and acceptance rate of COD mode are closely related, and compressing the time efficiency of each link and smooth connection are key. At the same time, the customs clearance regulations in various countries in the Middle East are strict, with high compliance requirements for specific products, and customs clearance taxes are also a major cost for sellers.
On the other hand, last-mile delivery is challenged by factors such as geographical environment, cultural and language differences, and the complexity of COD delivery processes, which affect delivery efficiency and customer satisfaction.
In the face of these challenges, independent merchants can choose different logistics solutions based on the situation in different regions, while adding communication tools such as Whatsapp to establish communication with buyers in advance. After the goods are shipped, monitor the logistics status in a timely manner and keep in touch with customers and logistics providers.
****Analysis of the local payment landscape in the Middle East****
Under the active promotion of governments and financial regulatory agencies, payment habits in the Middle East region have gradually shifted from cash on delivery to digital payments. According to a consumer survey by McKinsey, 60% of Middle Eastern consumers now prefer digital payments.
According to Payment data, 47% of online transactions in the Middle East are currently conducted through credit cards, 21% through bank transfers and local card payments. Mainstream online payment methods such as Mada and STC pay are gradually becoming popular.
When preparing for local online payment methods, merchants may face problems such as some payment gateways not supporting local currencies, difficulty in opening multi-currency accounts, and exchange rate fluctuations. It is recommended that merchants adopt a strategy of local payment and US dollar pricing to cope with these challenges.
Therefore, merchants need to adjust their payment strategies in a timely manner, retaining the option of cash on delivery and actively introducing local online payment methods to adapt to the changing trend of payment methods.
****Middle East independent site solutions****
In the emerging cross-border e-commerce market, the Middle East region is gradually emerging with its unique market environment and consumer demands. In order to help Chinese merchants successfully build competitive independent sites, Shoplazza, together with its ecological partners, has launched the Middle East independent site solution, including independent site construction, Middle East market marketing strategies, support for multiple languages and currencies, comprehensive payment methods, efficient and high-quality logistics and warehousing services, and is committed to helping Chinese merchants efficiently meet the full-module needs of various industries.
The above content is sourced from the “New Driving Force for Independent Station Growth – 2023 Middle East Cross-border E-commerce White Paper” jointly released by Dianjiang Technology and its partners Baidu International MediaGo, Dealfy, Mabang Technology, Payssion and SaleSmartly. We sincerely thank all our excellent cross-border partners for their valuable information and in-depth insights provided in this white paper.
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