The Moment for Ecommerce in the GCC. -

I’ve been following a thread on Linkedin about the effects of COVID-19 on retail in the GCC. One of the questions posed was:

Should retailers accelerate their venture into e-commerce to compensate (and isn’t the e-commerce sphere already crowded)?

Retail is not the only sector that is having to revisit strategies in light of the ‘Black Swan’ event and consequences of the current health crisis. But while COVID-19 might have been unpredictable, the changing mix between offline retail and ecommerce has been evident for years.

Merchants who have been standing on the edge of the cliff, hesitating about whether or not to jump into Ecommerce have now been pushed.

Should Retailers Accelerate into Ecommerce?

Perhaps the question should be, can retailers afford not to accelerate into ecommerce? If their stores are closed, how else are they going to accept orders?

The Context

Many retailers in the GCC have been reluctant to sell online, instead choosing to invest in more physical stores in ever-multiplying malls.

Despite the data based evidence to show that ecommerce sales are growing, that customers are willing to pay extra for services like ‘Shop and Ship’ to get online purchases from overseas sites, that the young population lives on their phones and social media, retailers still built more stores.

The arguments against ecommerce show a generational aversion to technology. arguments like ‘local consumers prefer malls,’ or ‘the people here don’t trust online sites’, or ‘our products are too complex or expensive to sell online.’ The data shows these arguments to be wrong.

The ecommerce industry – High-end consultants, system integrators and vendors have not helped. There is a tendency to focus on the enterprise end of town and and recommend solutions that are overpriced and not relevant for the local market.

At the lower end of the market, there is ‘Wild-West’ attitude. Hundreds of providers offering ‘cheap’ solutions. Retailers end up having horrible experiences with ecommerce and vow never to do it again.

Whatever the historical reasons for not having an online platform to accept orders – for retailers or B2B brands, the reality of the world has changed.

A Word About Competition

Isn’t the ecommerce space already too crowded? The short answer is no. Ecommerce sales in the GCC make up less than 10% of retail sales and for the reasons above there are plenty of retailers who have not yet got ecommerce offers.

The idea that you might not do ecommerce because it’s already too saturated is a strange concept. There can be hundreds of malls, all offering the same brands, but they keep building them and retailers keep taking space!

If you think that you shouldn’t do ecommerce because you can’t compete, then you might as well close shop. If your Value Propostion is so weak that your business doesn’t stand up to online competition, then you probably don’t have a business.

The Opportunity

COVID-19 has now forced the hand of any business that is not set up for ecommerce. If your stores are closed or your salespeople are working from home, you need a way to keep the lights on.

In a perfect world, you would strategise and plan and ensure that the ecommerce offer was part of a larger Omnichannel plan and you were delivery a fantastic Customer Experience across all your touch-points. That was a pre COVID-19 world.

There are a range of Software as a Service (SaaS) ecommerce platforms, that allow you to be selling online in days or weeks. Some of these platforms are optimised for the GCC, with local payment gateways and delivery options.

Having your own online store is not the only option. There are online malls – aggregators and marketplaces that allow you to list and sell your products on a site that already has ‘footfall’.

If you are a resturant or food store, then there are initiatives that allow you to accept orders and deliver without the predatory commission rates charged by some of the larger players.

Hard or Soft Landing?

Let’s revisit the analogy that retailers have been pushed off the edge of the cliff. You can only freefall for so long. Ecommerce might not be a parachute, but it might make the landing a little softer. Without ecommerce your business might suffer a little, but it won’t be as bad as if you didn’t have it.