A recent survey carried out by Gonabit and YouGovSiraj was released during the ArabNet 2011 Forum and it gives a good insight on e-commerce in the Middle East and the role that group buying sites are playing on the region.
The survey was conducted by independent research firm YouGovSiraj using the GoNabit customer database between 10th and 13th March 2011, where:
- The total sample size of 2,196 respondents
- Roughly even split of males (47%) and females (53%)
- Respondents were primarily from the UAE but also from Lebanon, Jordan, Kuwait and Egypt
- Spread of ages, but skewed towards the younger demographic (63% under 35; 37% 35 years or older)
- Skewed towards higher incomes (38% with monthly salary of $5,333 or more)
- Over half (53%) spend more than 3 hours online every day
The findings of the survey were generally positive and it states that the two main reasons users would buy online are:
- Price: In fact two thirds of consumers (66%) claim that if it is cheaper to buy online they would buy more often.
- Convenience: (56%) would buy more often if it was more convenient to purchase online.
The factors above are quite obvious, price will always be a very important factor. Convenience, however, is quite a tricky term here because sometimes people pay more to get convenience and to achieve that in e-commerce can be difficult. For example purchasing an airline ticket online always beats going to the travel agent and wasting an hour of your time and then ending up with a ticket for the same price as an online travel website if not cheaper. But for other e-commerce websites such as clothing or other specific products where you actually need to physically touch it or try it on I’m not sure whether convenience is a correct factor especially in the region, lets face it most of the brands are not from the region and any purchases from a global e-commerce shop could turn up to be a nightmare and in some cases more “convenient” to go to the retail outlet and just purchase the good from there. This is where customer care would be more important and that is why some online shops such as zappos have made it and others have simply failed. But in the case of group buying sites the convenience comes in the form of deals and discounts on products rather than the actual product itself, so users have the convenience of trying something new at a discounted rate.
The survey also provides some information on the role of social media:
- Almost half (47%) of all respondents have used social networking sites to share a deal online.
- Where (60%) among the 18-24 age group have used social networking sites to share a deal online.
- (26%) of all respondents have actually made a purchase after seeing something shared through social networking sites.
- (32%) among the 18-24 age group have actually made a purchase after seeing something shared through social networking sites.
No surprise that the younger age groups will be more active on social networks in the region especially if the deals are appealing to them as well. But it is important to note the sample taken here is from the gonabit database of users which indicates that they are aware of what is going on online and would not necessarily be indicative of the whole online users in the MENA region. Word of mouth also remains a powerful influencer of online purchases with (77%) having bought online after a recommendation from a friend. Meanwhile, 89% of respondents have recommended an online deal to friends and family through word of mouth.
(94%) from the people who participated in the survey conducted research before buying a product online, the most popular sources were:
- Review websites (73%)
- Friends and family ‘in the know’ (64%).
- Deal websites (54%).
- Consumer forum websites (49%)
- Manufacturers’ websites which are used by (56%) of males.
Finally and most importantly the survey sheds some light on the purchasing power of the online users:
- (53%) have spent more than $500 on a purchase online.
- (60%) would be prepared to spend $500 or more on a purchase online in the future.
- (52%) of those on the highest incomes have spent more than $1,000 online.
- (57%) are prepared to spend more than $1,000 online in the future.
- With 21% of respondents having made their first online purchase within the last month.
These are pretty promising numbers and are definitely going to increase in the future and we should hopefully see more e-commerce shops from the region.
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