A sharp increase in the use of smartphones across the region has led to a 50 per cent jump in traffic at Souq.com, with mobile platforms accounting for 60 per cent of the users, according to the UAE-based online marketplace.
Souq.com, which sells a wide range of electronic goods but leans towards smartphones with more than 300 models for sale, averaged 45 million visitors a month in September compared with 30 million in March.
Sales of smartphones form a lucrative part of the company’s business. Figures from the tech consultancy Gartner show that smartphone shipments to the Mena region increased 40 per cent year-on-year during the second quarter.
“Most of our growth is coming from Saudi Arabia and the UAE,” said Ronaldo Mouchawar, the chief executive of Souq.com. “But it is not just from the two traditionally strong markets. We are seeing a 100 per cent growth in Egypt as people change from feature phones to smartphones.”
He said an increasing number of consumers were making transactions online and mobile-driven e-commerce was becoming a force in the region.
The growth of e-commerce sales in the Middle East is confirmed by Honor, the smartphone brand from Huawei and only one sold online.
Last year, Honor’s global revenue growth increased 24 times over as it entered 57 global markets in only six months. It sold about 20 million units, clocking up revenue of US$2.4 billion. Besides, it has only been in the Mena region a matter of months.
“When we launched the Honor 6 plus six months ago in Mena, through souq.com, we sold 10,000 in the first week,” said Chris Sun, vice president – online sales at Huawei consumer for ME.
He said the Middle East ranks third in terms of sales, with Europe and India taking the top two places. “The Middle East is the region with the most potential because of its young population and its reliance on smartphones.”
Meanwhile, Awok.com, another UAE-based online retailer, is changing its strategy to become an online marketplace similar to the Chinese e-commerce company Alibaba, which carries no stock but instead allows vendors to use its technology for a small fee.
Awok.com follows JadoPado.com, which also recently converted into an online marketplace.
Ulugbek Yuldashev, the founder and managing director at Awok.com, said he plans to launch the marketplace in the first quarter of next year. The company is now in the process of winding down its online retail business.
The company signed up nearly 1,000 vendors in just three days this week, all looking to access the Mena market.
“Our retailing was growing at 300 per cent year-on-year, but to expand and grow I needed fulfilment centres and logistical support, which is a very expensive investment,” said Mr Yuldashev. “With very little marketing I was reaching 2 million users every month selling through Awok.com. When the marketplace launches we will very quickly grow exponentially because the amount of products available will be substantially higher. It is free for any vendor for six months, so let us see where we are in July next year.”
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