UAE online-savvy shoppers ready to pay more for same day delivery

Dubai - UAE millennials are the most experienced online retail purchasers in the region

Online-savvy shoppers in the UAE are more willing to pay a premium for same-day delivery than their regional peers.
A survey by PwC reveals that 63 per cent of those in the UAE would pay more for same-day delivery, compared to 54 per cent in Saudi Arabia.
In this year's survey by PwC, the UAE stood out as having more experienced online shoppers than is typical in the region.
While overall, Middle Eastern consumers are shopping online more frequently than they did a year ago, UAE millennials are the most experienced online retail purchasers in the region. Some 10 per cent of these shoppers have more than ten years experience in online retail compared to a Middle Eastern average of five per cent.
On-line shoppers in the UAE said they owned a mobile phone, but in the region overall seven per cent did not have one.
Other trends found among UAE shoppers include increased focus on after-sales service (37 per cent versus a Middle Eastern average of 31 per cent), as is Click & Collect (27 per cent versus 22 per cent). Online shoppers in the UAE value loyalty points more in loyalty schemes (64 per cent see it as a key benefit, compared with a Middle Eastern average of 55 per cent).
Consumers in the UAE are more likely to choose a retailer for their stock availability (24 per cent compared with a regional average of 18 per cent), and because they trust the brand (32 per cent versus 29 per cent). Respondents from the UAE are more concerned about security risks online (22 per cent versus 14 per cent), and - perhaps for similar reasons - are much more likely to use a debit card than another form of payment (46 per cent compared to a regional average of 25 per cent).
The survey shows that the percentage of daily online shoppers in the Middle East doubled from six per cent in 2014 to 12 per cent in 2015. The shopping experience remains divided between online and in-store; consumers still revert to in-store shopping after researching their products online.
According to A.T. Kearney's latest report the GCC has the potential to become the world's fastest growing e-commerce playground with the market predicted to quadruple its value to $20 billion by 2020. With an estimated market size of $5.3 in 2015, e-commerce contributes only about 0.4 per cent to the region's GDP - a minuscule amount which is four-eight times lower than other comparable.
According PwC, online retail, rise of millennial shoppers and social media are disrupting the face of Middle Eastern retail.
"Middle Eastern retail is in revolution and online shoppers in the Middle East are fundamentally disrupting retail. Technology is changing not just how consumers shop, but how retailers operate across the spectrum: from supply chain management, all the way through to customer engagement and brand management," PwC said.
While PC is still the main channel for online retail,   the use of mobile is growing and taking a larger role in the online shopping process. One of the important factors that has an impact on shopping behaviour, and as a result on the retailers themselves, is the payment method as consumers are still wary of online security and have a preference for cash payment.
Norma Taki, Retail and Consumer Partner at PwC Middle East, said the Middle East has one of the fastest-growing populations in the world, and one of the youngest: the number of people in the Arab world is set to almost double to 500 million by 2100, and half of these people will be under 24. "Because of these demographic shifts, compounded with the other seismic changes provoked by the global megatrends, the Middle Eastern retail sector, is no doubt undergoing a change, a revolution, albeit at a different pace compared to the more developed countries."
In the Middle East, the disruption is happening at the millennials' level with more of the younger population   living in cities, and more of them using digital technology.
The survey found that price is still king and plays a key role in determining shopping behaviour. Middle Eastern consumers value monetary benefits obtained through loyalty / reward programs and social media.
- issacjohn@khaleejtimes.com