Excavating the Middle East Market! The Golden Mine of buying Chinese-made products is waiting for cross-border merchants

Middle East Market Golden opportunity for cross-border merchants to buy Chinese-made products!

“With a piece of cloth on their heads, they claim to be the richest in the world!”

After witnessing the grandeur of the 2022 Qatar World Cup, are you also impressed by the Middle Eastern people’s “arrogance”?~

A World Cup cost over $229 billion, allowing Qatar to establish itself as a wealthy nation.

This trend can also be seen in other Middle Eastern countries, as it is becoming a blue ocean market for cross-border e-commerce development.

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Key point! At the end of last year, China and several Middle Eastern countries entered a new stage of comprehensive and highly cooperative relations, and the business environment between the two countries will continue to improve. General Manager of AliExpress in the Middle East, Jing Yun, said, “Middle Eastern people love Chinese-made products, and the internet penetration rate is very high. It can be said to be a ‘golden minefield’ for cross-border e-commerce.”

The wealthy Middle East relies heavily on imported products. Why is that?

The desert terrain restricts the inland transportation system in the Middle East, resulting in weaker overall industrial strength in the region. A large number of light industry, daily use, and electronic products need to rely on imports, and cross-border e-commerce growth is leading the world. At the same time, competition in the European and American markets is becoming increasingly fierce, with constantly changing tariff policies and commercial barriers. In comparison, the stable exchange rate of the Middle Eastern market has become a new field for Chinese merchants to focus on for overseas expansion.

01

“Online shopping-loving” Middle Easterners

As the center of the world’s largest oil fields, Middle Eastern countries are born into “wealthy households.” Who wouldn’t envy that?!

To expand into the Middle Eastern market, it is recommended that merchants start with the GCC (Gulf Cooperation Council) region, which is also the main area that cross-border e-commerce platforms are focusing on.

The GCC region includes six countries: Saudi Arabia, the United Arab Emirates, Qatar, Kuwait, Oman, and Bahrain (the “Middle Eastern market” in the following text mainly refers to this region), which share the same religious beliefs, language, and cultural customs.

Although the population is less than 60 million, the total economy exceeds 1.4 trillion U.S. dollars, and the per capita GDP is between 20,000 to 80,000 U.S. dollars, even surpassing that of developed countries.

Meanwhile, the Internet in the Middle East is very developed, with 71% of users accessing the Internet through 4G, and a mobile phone penetration rate of up to 77%, among which 64% are smartphones (80.6% in the UAE), ranking among the top in the world. The most prominent Internet penetration rates in Saudi Arabia and the UAE are 85% and 96%, respectively.

With a high Internet penetration rate and a continuous need for imported products, cross-border e-commerce has become the most popular consumer scenario in the Middle East~

It is reported that 50% of Internet users in the Middle East have shopped online, and the local online shopping rate is expected to jump to 55% in 2022, with continued growth expected in the future.

The good foundation of online shopping in the region makes local policies more willing to maintain an open attitude towards accepting global goods. What’s more important is that the Middle Eastern market really likes products “Made in China~”

As an important participant in the “Belt and Road” initiative, Middle Eastern countries have been deepening economic cooperation with China. Previously, China and the Arab League jointly issued the “China-Arab Data Security Cooperation Initiative”, and China’s e-commerce platforms have a user coverage rate of over 80% in the six Gulf countries.

Last year, at the end of the year, China and multiple countries in the Middle East entered into a new stage of comprehensive and highly cooperative relations! With the support of cross-border e-commerce policies in both regions, the business environment for Chinese merchants in the Middle East will continue to improve.

02

Consumer Preferences in the Middle East

If you still think that the Middle Eastern market is “stupidly rich,” then you are completely wrong!

Jing Yun (a person) introduced that Middle Eastern people like socializing and are enthusiastic about gatherings with family and friends. They are willing to spend more time eating, chatting, gathering, and drinking coffee. Although Middle Eastern people are less sensitive to product prices, they are very concerned with quality of life and product quality.

It was learned through visits that Middle Eastern people have higher requirements for logistics timeliness and service when it comes to online shopping, which coincides with the recent increase in overseas warehouses by AliExpress in the Middle Eastern market.

For example, in Saudi Arabia and the United Arab Emirates, AliExpress has opened overseas warehouse services, which not only greatly reduces the logistics costs of merchants but also significantly improves the logistics timeliness of delivering products to consumers’ hands.

Specifically, there is a huge difference in freight costs between air shipping cross-border direct delivery and sea shipping stock preparation in the Middle East. The average logistics cost of overseas warehouses for stock preparation can effectively reduce logistics costs by 30% to 40%. The higher the value and weight of the goods, the more cost savings, and even up to 70% can be saved. In terms of logistics timeliness, it has been improved from the original 15-20 days to 5-7 days, and even 3-day delivery can be achieved in major cities in Saudi Arabia.

Take the semi-automatic coffee machine, which is currently popular in the Middle East, as an example. Compared with cross-border direct delivery, sea shipping stock preparation can save up to 66% in logistics costs. Merchants can use the saved logistics costs to lower the product price and invest in marketing and promotion in the Middle East, bringing in up to $200,000 in promotion transactions with zero cost investment and causing explosive growth in sales.

In addition, Middle Easterners love to share their shopping experiences on social media, so exquisite packaging and fashionable product design are the first priority to attract Middle Eastern customers. This year, the platform will increase its coverage on local social channels and help businesses promote new products.

The main consumers in the Middle East are young people aged 20-40 and women, with women accounting for the vast majority. They generally have a high acceptance of new products and technologies, and creative and distinctive cutting-edge products are easily accepted by Saudis.

Young people tend to prefer electronic products, especially new game consoles, mobile phones, headphones, etc.; while women prefer various types of clothing, and purchasing fashionable women’s clothing has become popular in the Middle East. Under the black robe, there can be a daily stylish dress, or a luxurious and heavy evening gown.

It is worth highlighting that, due to being Muslims, Middle Eastern women have a different fashion preference for products such as clothing. Taking dresses, the most frequently purchased item, as an example, Middle Eastern women generally prefer dresses that are knee-length and with sleeves that cover the elbows, which is different from other markets.

According to the “2022 Middle East E-commerce Market Report” summarized by Hugo Cross-border, fashion products and consumer electronics products will almost occupy half of the Middle East’s online sales in 2022, with a category market share of 23% and 26%, respectively.

In summary, consumer electronics and fashion categories are the top categories in the Middle East market, which is a safe bet. Then, home goods, especially Chinese-made textiles and decorative items, are also popular in the Middle East.

In addition, Xiaoe summarized the following Middle Eastern market consumer preferences, but only this time, so quickly save it:

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Xiaoe’s notes

– Eating in Saudi Arabia: Mainly lamb and chicken for meals; coffee and dates are almost necessary for every meal; chocolate and high-calorie desserts are also a daily necessity;

– Dressing in Saudi Arabia: Dresses of all seasons and all kinds of party dresses are packed in the closet. Abaya (Arabic robe) + dress is the OOTD for most girls, but under the long shirt are various fashionable dresses;

Apparel category cross-border e-commerce penetration rate in China is extremely high. Recently, affected by Ramadan, Chinese dresses and formal wear have surged in sales in Saudi Arabia!

– Living in Saudi Arabia: The favorite indoor decoration is black and white gold, and carpets are a must-have for everyone, and can be used for prayer anytime~

– Traveling in the Middle East: locals prefer large SUVs, which are better suited for desert environments; currently, female driving is becoming more and more popular, and automotive accessories such as driving recorders have huge market potential!

03

Two unmissable big promotions

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Ramadan Festival

According to the teachings of Islam, Ramadan is the holiest month of the year. After Ramadan, there is the Eid al-Fitr. People dress up and celebrate, visit relatives and friends, hold banquets, and exchange gifts. The festive atmosphere is no less than that of the Chinese New Year!

This year’s Ramadan will begin on March 23 and end on April 22, lasting 30 days.

Like any major holiday that reunites with family in the world, Ramadan means a significant increase in the purchasing power of the Muslim population. Data shows that in 2021, the search interest for “Ramadan” and “Eid al-Fitr” increased by 45% compared to the previous year. In 2022, the consumption during Ramadan in the Middle East and North Africa reached 6.2 billion US dollars, an increase of 39% compared to the previous year.

*In the summer, in an environment where the outdoor temperature is close to 50 degrees Celsius, household ice cream machines and ice makers have become standard equipment for Middle Eastern users.

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Super Friday

The Super Friday in the Middle East corresponds to the Black Friday shopping frenzy in the United States. On Super Friday, in addition to shopping malls in the Middle East offering a large number of discounts and promotions, e-commerce platforms in the Middle East also carry out a lot of promotional activities on this day.

Compared to Ramadan, Super Friday is different and suitable for product promotions in almost all categories. Competitive promotional activities are the key factors that attract consumers’ attention and make purchase decisions.

*Frequent sandstorms in the Middle East have led to a continuous demand for household high-pressure water guns for car washing equipment in Saudi Arabia.

In addition, Super Friday is in the Middle Eastern winter, and the weather in Saudi Arabia changes from hot to comfortable. Many families will go to the beach and desert camping together, and camping equipment is also selling well. Unlike delicate camping in China, Saudis prefer non-overnight camping. They also have their own “tea-making around the campfire” where they make coffee and tea, accompanied by the sunset, this is the romance of Saudis~

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