Over the past five years, online shopping has witnessed significant growth in the Middle East region, particularly in economically progressive areas like Kuwait. Previously, there was a strong culture of shopping malls, which deterred consumers from embracing e-commerce. However, the scenario has shifted, presenting its own set of challenges.
During the pandemic, people were compelled to shop online, leading to the emergence of e-commerce aggregators in the region. Companies like AAW, a local trader that ventured into e-commerce during the pandemic, experienced rapid success and now employs a workforce of over 1500. According to local research, e-commerce in Kuwait alone is projected to grow by 15% by the end of the decade.
However, merely transitioning to an online platform is not sufficient. There are numerous technological challenges to overcome and innovative paths to explore, uncharted territory for leaders like AAW. Many Gulf-based e-commerce companies rely on the Indian platform Magneto for their operations. However, Magneto reports that more than 30% of their Middle East clients shut down their businesses within three years, primarily due to an inability to achieve revenue goals.
Tech is The Way Ahead
Tech innovation is the key to success. The primary reason why e-commerce retailers struggle to thrive in consumer-rich regions like Kuwait is their failure to fully leverage available technology. Buyers seek convenience, multiple payment options, mobile-optimized websites, and more. Since most Gulf e-commerce players fail to meet these demands, the region has not witnessed the level of success achieved by platforms like AliExpress.
Furthermore, international giants such as Amazon pose constant competition, making customer acquisition challenging and retention unlikely. What these e-commerce companies urgently need is tech talent to overcome their obstacles. The previous shopping mall culture demonstrates that buyers in the region are open to purchasing from local vendors. To replicate this mindset in the e-commerce segment, every aspect of the process must be made user-friendly.
In the next five years, companies that can assemble the right IT teams to elevate their businesses to a global stage will lead the way in the next generation of markets. Developing countries worldwide have shown a strong inclination towards e-commerce, and regions like Kuwait are ripe for this revolution. The question remains whether the region can produce enough IT professionals to meet the needs of these companies or if hiring external talent is the ultimate solution.