Digital progression in the Mena region is being slowed by high broadband costs, a lack of Arabic language content and sluggish e-commerce adoption, according to regional experts from Google and Yahoo.
“There are three main challenges we face in the region,” says Ari Kesisoglu, Managing Director of Google Middle East and North Africa. “First, in some countries the cost of getting access to the internet is high. Second, we need more content in Arabic. The percentage of users online in Mena versus the percentage of content in Arabic is a huge gap and we know users in Mena are coming online for local content.”
While larger enterprises such as Facebook, Twitter and the Wikimedia Foundation provide Arabic language platforms, a large number of websites rely on tools like Google Translate to cater for non-English readers. The Internet World Stats website reports there were 86,077,806 Arabic speaking internet users in Mena at the beginning of 2012 – a 24% penetration.
“The third challenge is that e-commerce in the region has not realised its potential. SMEs need to create websites and we need more businesses in the Arab world to realise the economic impact of the internet,” says Kesisoglu.
Middle East e-commerce sees growth in some markets
Part of the issue ties in with establishing consumer trust in online shopping, but according to ystats.com, authors of the newly published Middle East Internet & B2C E-Commerce Report 2012, online and mobile commerce is accelerating in some countries.
Between 2010 and 2011, business to consumer e-commerce revenues were up by almost 50% in Bahrain and increased almost two thirds in Kuwait. In 2011 and 2012, e-commerce also boomed in Jordan due to improved broadband access, the report finds.
Last year the highest number of internet shoppers were based in Saudi Arabia, with the highest penetration found in Qatar and the UAE. Online shopping increased mainly as a result of group buying websites, such as Groupon, with the most popular product categories being air tickets, household appliances and consumer electronics in the period between December 2011 and February 2012.
However, a lack of confidence in available payment methods was one of the reasons why almost half of all internet users refrained from online purchases in 2011, the report finds.
Middle East internet adoption among world’s fastest
Yahoo’s Middle East Vice President and Managing Director, Ahmed Nassef, sees things slightly differently, citing ‘deeper’ educational challenges as being more relevant to development.
“The Mena region has among the fastest Internet growth in terms of users in the world, so, adoption is not really slow. Of course cost of access is a factor in some areas such as Levant and North Africa, but generally these access costs will only keep coming down. Deeper challenges such as illiteracy create a bigger obstacle, and a focus on education needs to be a high priority for the region.”
“In countries with a larger underclass and higher unemployment figures, people are still struggling with the basics. So, how can e-commerce grow for example at the same rate as developed countries in such an environment?” asks Nassef.
With traditional media often monetised offline, broadcasters and publishers may frequently withhold digital content from reaching web audiences. “Governments can sometimes create barriers with over-regulation of media and content, which serves to discourage innovation at a local level and discourages open user engagement with content,” says Nassef.
Governments also imposing high tariffs on the transport of goods and unpredictable customs policies between countries are barriers to e-commerce growth on a regional level.
