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Secret to e-commerce success in GCC? It's last-mile delivery

The GCC e-commerce market is growing at a rate of 7.2 per cent per annum and will reach $23.7 billion by 2022, says a latest report.
According to the findings of the latest study commissioned by Gulf Pinnacle Logistics (GPL) and conducted by an independent research firm, the Gulf region has a high Internet penetration, one of the largest mobile penetrations globally and a relatively high GDP per capita, but this hasn't translated into a high Internet retail penetration, offering a significant opportunity for growth.
"Today, consumers make online purchases at least quarterly, spending Dh500 per year... however, GCC consumers are still looking for higher delivery performance, especially on the time and cost fronts, with late or long delivery time being the most common complaint," said Shailesh Dash, chairman of GPL. Retail activity done via the Internet in developed markets is higher compared to those in less-developed ones. This regional lag has mainly been due to the shortage of quality supply of e-commerce providers for the past decade who very recently emerged into the market.
The second factor is the unsophistication of the previous generation who has a high purchasing power but is not very well-versed with Internet and technology. However, e-commerce development and underlying retail growth will translate to higher retail Internet penetration overtime. As a result, the last-mile delivery market is expected to almost double in size to $3.4 billion by 2022.
"UAE consumers primarily value fast delivery while Saudi consumers find free or cheap delivery more important. In addition, almost 70 to 80 per cent of consumers in the UAE and Saudi Arabia would be willing to pay for same day/express delivery," Dash said.
- business@khaleejtimes.com