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Challenges of COVID-19 impacts consumer perception about e-commerce platforms

 

 

ITCAN: UAE and KSA markets report increase in online orders for products as more people stay home

 

The pandemic created by the novel coronavirus (COVID 19) is driving consumers in the

United Arab Emirates (UAE) and the Kingdom of Saudi Arabia (KSA) to turn to e-commerce

platforms in getting their essential needs instead of going to shopping malls and retail

stores, demonstrating an overnight shift of consumer behavior from bulk-buying to online

shopping, according to ITCAN, a leading e-commerce technology and digital marketing

company focused on e-commerce performance marketing.

The firm has reported that online orders on certain products such as skin care and other

personal hygiene items have reflected an upward surge following new regulations by

authorities to restrict outside activities and urging people to stay at home to curb the

further spread of the coronavirus infection.

ITCAN noted the rapid increase in these categories between February 26 to March 26 in

both countries. In the UAE, the rate of orders for skin care soared to 143.96 per cent with

99.92 per cent of the increase came from orders made by new users, revealing a conversion

rate of 33.45 per cent in terms of website visitors or footfall. For the same category, orders

in KSA rose to 105.37 per cent with 32.7 per cent by new users and a conversion rate of

63.59 per cent.

The makeup category also gained huge orders in the UAE reaching 275 per cent with

148.57 per cent ordered by new users. The conversion rate was 67.93 per cent. In KSA, the

orders for makeup products shot up to 769.67 per cent by March 26 with 187.15 per cent of

the orders from new users, leading to a conversion rate of 276.48 per cent.

Mansour Althani, CEO & Co-founder of ITCAN, said: “The current global health situation is

leading consumers worldwide to adapt to alternative ways of getting their goods, particularly through online shopping and they are likely to spike even more as cities raise

the level of restrictions on people’s movement outside their homes. This shift in consumer

behavior puts e-commerce platforms on the forefront to support people in the region who

are still used to shopping their needs in malls and stores to move towards online

marketplaces.”

Althani noted that although the situation across the GCC is under control and essential

goods are very much available in all supermarkets, there continues to be a high turnout on

e-commerce platforms for safety and precautionary reasons.

“The online orders made between February 26 to March 26 reflects a big jump and this

continuously increasing demand are pushing major e-commerce companies to start setting

their own standards on what types of products are considered essential to manage the

surge of orders and meet people’s needs accordingly. We see this event’s impact on

consumer behavior towards online shopping will go beyond the current crisis and will serve

as an impetus to further accelerating the growth of e-commerce in the region,” he added.

ITCAN cited previous studies which showed that up to 55 per cent of shoppers in the UAE

and Saudi Arabia favor smartphones when buying online. More than 60 per cent of

shoppers in the UAE and Saudi have made at least one online transaction, according to Bain

& Company based on a 2017 report.

E-commerce is already a fast-growing market in the Middle East, however, its essential role

in society has been highlighted by the current health crisis, solving people’s problems and

potentially saving lives. As the virus affects many businesses, many have quickly responded

to the need of the hour and improved their online presence to keep their customers and

attract newcomers.

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