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Bahrain tops regional average in online sales

Manama, July 4, 2014

More than five per cent of total retail sales in Bahrain occur online, much higher than the regional average, a report has found.

A new report by Germany-based secondary research company yStats.com on business to consumer (B2C) commerce prepared electronically, reveals that B2C e-commerce presently accounts for less than 1 per cent of total retail sales in the region.

According to the "Middle East B2C E-Commerce Report 2014", almost 90 per cent of the population in Bahrain is connected to the Internet and 5 per cent of users shop online, reported the Gulf Daily News, our sister publication.

As Internet connections spread and the population becomes more familiar with online shopping, growth rates of around 20 per cent per year are expected for the next few years.

However, the findings indicate that while e-commerce in the region has grown significantly in recent years, and is prepared for a boom, there are obstacles to overcome to prepare the way for the boom.

These obstacles include low adoption of the online retail channel by local businesses, predominance of cash on delivery payments, and low consumer acceptance of online shopping, compared to international benchmarks.

Still, a few markets lead the region in adoption of e-commerce.

The product categories that produce the most revenue in online sales in the region were consumer electronics, computers, and jewellery, including watches.

Online shopping for clothing has also begun to gain popularity.

"Mobile commerce has a high potential in the Middle East, as smart phone and tablet penetration is high, and mobile phone is often the most common mode of connection to the Internet in the region," Dubai-based Nirvana Consultancy's chief analyst Varun Sutholiya said.

M-commerce accounted for 10 per cent of all B2C e-commerce in the region in 2012, with this share expected to double by next year.

Several fast growing local merchants have emerged in response to the developing interest in B2C e-commerce in the Middle East.

Among them are mass merchants JadoPado and Alshop, and online electronics store EmiratesAvenue.

Three other regional merchants - online mass merchant Souq.com, online fashion store Namshi and flash sales site MarkaVIP - together garnered more than $70 million of investment in 2012.

Nevertheless, International sites Amazon and eBay are among the most popular shopping destinations of online consumers in the Middle East, though behind regional player Souq.com in terms of annual spending per shopper.

"Due to relatively low adoption of the online channel by local merchants, cross-border Internet shopping is common," Sutholiya said.

"There are even special services that assist consumers in buying from International websites and getting their orders delivered," he added. – TradeArabia News Service




Tags: Bahrain | Internet | E-commerce |

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