Nowadays, a lot of e-commerce platforms are very popular in
MENA market, such as JollyChic, Souq, Noon, Namshi, Wadi,etc.
With the fierce competition in the cross-border e-commerce
markets such as Europe and the United States, more and more cross-border
e-commerce platforms and sellers are eager to seize the opportunities in the
new market. The Middle East is one of the hottest emerging markets.
However, at the same time, as a pioneer of new markets, when
cross-border e-commerce enters the Middle East, there are many problems needed
to be solved urgently. The logistics solution is the most difficult bottleneck.
The market has great potential, and the Middle East is a
fertile ground to be reclaimed.
As one of the fastest growing e-commerce markets in the
world, not only the local e-commerce platforms are booming, but also many
foreign platforms have been attracted in MENA, including China's e-commerce
companies. The giant Amazon has also made a big push into the MENA e-commerce
market.
It is known that the e-commerce market in the Middle East is
mainly centered on Saudi Arabia and the United Arab Emirates, covering Bahrain,
Qatar, Egypt, Kuwait, Oman, Iraq, Syria and other countries. Saudi Arabia and
Dubai lead the rest of the Middle East with its own economic development, large
number of online shopping consumers and e-commerce market share, Saudi Arabia
accounts for about 65% share, and the UAE accounts for 20%. The remaining 15% belongs
to other Middle Eastern countries. Fashion, beauty, 3C (electronics) and
products with MENA characteristics such as perfumes are the most popular goods
in the MENA e-commerce market.
The logistics solution are the biggest obstacle in MENA
e-commerce market.
Because of the high network coverage and the large consumption
potential, the MENA market is truly a fertile ground to be reclaimed for the Chinese
cross-border e-commerce sellers. At the same time, however, the special humanistic
and geographic environment of the MENA have also added challenges to the
Chinese sellers, and this is especially true for logistics problems.
Difficulty in custom clearance. There are high trade barriers
in the Middle East, like high trade tariffs and strict product clearance. If
e-commerce sellers encounter high tariffs, changing regulations and exchange
rate fluctuations, the customs clearance might cause huge losses. Therefore, when
orders placed, it could takes several weeks to be delivered. This dilemma has
greatly reduced the shopping experience and increased the probability of
returning goods.
Difficulty in delivering. There are no specific zipcodes in
many parts of the Middle East so the addresses’address is not clear. And due to
the insufficiency in the couriers familiar with the route, a significant delivery
cost increases in the last mile.
On the other hand, most of the Middle East is Muslim country,
and there are many taboos in terms of products and delivery. For example, the
women are afraid to open doors to strange man without their male family members
at home. Therefore, products that may take several months to arrive may end up
being undeliverable because no one is paying.
Difficulty in sorting. With more and more sellers entering
the Middle East local e-commerce platform and self-built independent platforms
in recent years, the volume of goods in the Middle East e-commerce market has
risen sharply in the short term. As the result, the current logistics channels
may be difficult to carry a surge in volume, so more and more e-commerce giants
and big sellers began to pay attention to the construction of overseas
warehouses.
However, the current construction of overseas warehouses in
the Middle East, both in terms of labor costs and capital costs, is relatively
high. In some areas, there are many restrictions and requirements for overseas
warehouses in terms of policies.
Major logistics companies in the
Middle East
Here are several major logistics companies in the Middle East
local distribution:
1、Aramex
Aramex is a 35-year-old Middle Eastern courier company.
According to Aramex officials, 80% of local delivery in the Middle East is done
by them. Aramex's advantage lies in its long-term accumulation. It relies on
the historical data left in the Arab countries for more than 30 years. Through
its own system, it matches the actual address of the user by name, phone
number, email address, etc., and then delivers it.
In order to solve the problem of unclear address, Aramex does
not employ a large number of Indians, but mainly employs Middle Eastern locals
to deliver. Local people are more familiar with the local area and able to communicate
more smoothly, which can reduce the rejection rate effectively.
2、Fetchr
Fetchr is a Dubai-based company founded by French Iraqi
ldriss. Fetchr believes that even the address is not clear, more than 80% of
consumers in the Middle East have smartphones. Therefore, through technical
means, users can download the Fetchr application and then locate on Google
Maps, so Fetchr's courier can deliver the package by GPS positioning.
Fetchr offers the same-day delivery and the following-day
delivery service and it works with UPS and FedEx to deliver orders from the
United States, in addition, Fetchr also undertakes DHL's delivery in MENA.
Souq, the largest local e-commerce company, met the challenge
of the last mile delivery since its inception and has been looking for
solutions in local delivery. Q Express is its self-built logistics company and
only services Souq with the last mile delivery. The current orders on the Souq
platform are delivered by Q Express. Souq buyers can enter the order number and
track the logistics status on Q Express. All Q Express couriers carry PDA
equipment to update the shipping status at any time; Q Express has multiple
transportation outlets in the Middle East to facilitate the delivery and return
of goods.
