MENA digital economy will be worth nearly $100bln by 2023 - report

The MENA region’s digital economy is projected to grow to nearly $100 billion by 2023, despite a recent interruption to growth due to decline in online travel bookings during the pandemic.

Redseer Consulting projects growth from $44 billion in 2020 to $97 billion in 2023, after it fell from $52 billion in 2019.

Sandeep Ganediwalla, partner and digital strategist, Redseer Consulting, said: “We have seen a structural shift in the last year in consumer behaviour: significant adoption in e-commerce and high level of digital payments.

“More than 90 percent of consumers in UAE and Saudi Arabia in 2021 are now reporting that they bought a product online.”

Ganediwalla said the adoption rates were significantly higher than the western market average of 70 percent.

He said growth could be attributed to three pillars, first the shift in consumer behaviour, and “increased stickiness” and higher adoption amongst consumers.

“The icing on the cake is it is no longer a cash on delivery (COD) heavy market, meaning lower returns and better capital efficiency. This has meant that suppliers are now putting in more resources to serve the online market across e-tailing and foodtech,” he said.

The consultancy’s MENA Digital Economy Report June 2021 showed that two sectors will continue to remain strong:  Online travel which accounted for 34 percent of the digital economy in 2020, will be 36 percent of it in 2023. E-tail, excluding groceries, which made up 41 percent of the sector in 2020, will be 42 percent in 2023.

Foodtech, which includes app-based aggregators, cloud kitchens and restaurant-owned apps, will shrink from 17 percent to 13 percent according to Redseer projections.

 

Source: https://www.zawya.com/mena/en/business/story/MENA_digital_economy_will_be_worth_nearly_100bln_by_2023__report-ZAWYA20210704040641/

 

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