Successful Ecommerce Businesses in MENA
Why is social media so big in MENA? It’s mainly due to the fact that 50% of the MENA population is below the age of 30, in KSA it is even 67% of the population. These millennials have a huge appetite for social media consumption. KSA has the highest per capita video (Youtube) consumption in the world. So be aware of this when planning your marketing campaigns.
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Customer experience. There is no rocket science to this – a happy customer is a must for any successful business. But how to achieve this? It all starts with transparency: no hidden costs, clear product descriptions, and high-quality product images are key for a great customer journey. Smooth checkout process, order tracking, and quick delivery comes next. Note that in MENA, there is a clear correlation between the delivery time of an order and a customer’s willingness to accept the product. Remember that 90% of the business in MENA is conducted via cash on delivery (COD). If you don’t deliver fast (i.e., within two days max in city areas and four days max in rural areas) then you have a high chance that the customer will not respond to a courier call, you will not deliver the order, and you will have an unhappy customer that will not order again. Inventory management plays a key part in your ability to deliver fast (or deliver at all). It is one of the main pain points of every e-commerce business. It needs your utmost attention from the start of your business as it not only effects your customer satisfaction and sales, but also your cash flow! You might end up with huge piles of unsold stock that you have paid for and that you cannot return to your suppliers. If you fail in effective inventory management, you will fail with your whole business. 78 sqwawqs Issue 4 March 2018
Handling of questions, complaints, and returns is the final step in the customer journey. Make it easy for the customer to return a product. In today’s competitive environment you have no choice than to apply a “no questions asked” return policy. Ensure to calculate those costs into your business plan. We have now discussed the essential ingredients (the “clear part”) of an e-commerce business and highlighted some specific characteristics of the MENA region. The complicated part is to put all of this together and make it work. In order to mix the above ingredients together in the right way, you will need experienced staff and/ or consultants. Even if you are a small e-commerce business, it will help you tremendously to get someone aboard (even if just on a project basis) to review what you are currently doing. The least that every player in the market needs to do is to run an internal update on where the company stands in respect the above essentials. Many aspects of the business can be improved without involving much cash. Standard BI tools, for example, are most likely already part of the e-commerce solution that you are using. Customer experience can be improved by working very closely with your courier company and following up on every delivery they do. The final question is, how to achieve profitability? I will give you an honest answer – it is extremely challenging to run a profitable e-commerce operation in MENA. In my view, it is only possible in two cases: (1) as a general e-commerce player if you planned your operations very carefully and in detail, if you have the right experts on board and (!) if you have deep pockets, or (2) as a niche player if you sell high margin products to a very specific audience.
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