Retail professionals: unleash the potential of the Middle East’s eCommerce market

Fashion retailers are arriving in hoards to take advantage of the Middle East’s booming eCommerce market. As a retail-marketing manager and graduate student in Northwestern University’s IMC program I have learnt that success in this market calls for a deep understanding of regional shopping habits and have found two key research papers that identify the key factors that must be considered.

 In an eCommerce study commissioned by Visa Middle East, Edouard Dayan (Director General, UPU), Ayaz Maqbool (Managing Director Tejuri.com) and John Andrews (CEO, IORMA) highlight that the Middle East region is the fastest growing eCommerce market worldwide. Noting that this is still a very underdeveloped market the article discusses the opportunities and barriers to e-commerce adoption in the region. According to the study mobile shopping has a bigger role to play than PC based shopping with 29 percent of local users buying goods and services through smartphones, bucking the global trend of 26 percent.  The issue of trust in payment gateways was also highlighted as a major factor in adoption rates, which although improving, still poses an issue for local consumer, banks in the region are addressing this challenge through increased security measures for online payments. 

The value and growth potential of the Middle East retail market is further reinforced in a summary report by the European Travel Commission who predict the value of the eCommerce market to reach and estimated 15 billion by 2015.  The report provides profile of who is shopping online and how they are shopping. An important highlight of the article is the ranking of the top eCommerce sites  which places online giant Amazon only third, after local offerings Souq.com and Cobone.com. This ranking shows that although Middle Eastern consumers are warming up to the idea of eCommerce, they still prefer locally focused sites as opposed to regular international giants. The article also cites a key barrier of eCommerce site as online payment systems. 46% of Middle Eastern Internet users say lack of trust in payment options as a substantial barrier to engaging in eCommerce.  In line with this attitude is the finding that Cash on Delivery is still the preferred payment method when shopping online, which compared to western adoption rates might seem relatively primitive.

Taking into account the insights presented in these reports, I suggest the following 3 action items and e-tailer must take into account when considering the Middle East market:

1. Localize your content. Arabicized e-commerce websites still perform better in the region then global giants such as E-bay and Amazon. Middle Eastern consumers are slowly adopting to  eCommerce but they need it on their terms. Brands that have defined the online landscape in other regions are not necessarily held in the same regard in this region. In order to gain the trust of the local consumer and help them on their eCommerce journey you must speak their language.

2.  Your content must be mobile enabled. M-commerce in the Middle East is already surpassing global trends. Local consumers are not only used to this channel but are experts in it. While m-commerce is often an afterthought in  eCommerce strategy, when moving into this region is must be a fully functional component of your operations or you will be one step behind your target.

3. Be flexible on payment gateways. Lack of trust in payment options is the biggest barrier to online business in the Middle East. Cash on delivery and prepaid cards, although seemingly primitive, remain the most common form of payment in the region. E-tailers must build credibility and trust by meeting the consumers on their terms before imposing their own procedures.

The Middle East e-commerce market is underdeveloped and one the fastest growing in the world, holding significant opportunities for both new and established players. Incorporating the above three insights into your strategy is a positive step forward in building a meaningful and valuable relationship with these consumers. Good luck!

Professional summary:

Ruthie Fischer is a retail marketing professional with 8 years experience developing and implementing a 360 communications strategy in competitive retail markets. Having spent 6 years working with some of the worlds leading luxury fashion brands and implementing their international marketing strategies in the UAE and GCC region, Ruthie is well versed in the complexities of the retail industry and consumer in the Middle East. Ruthie is currently undertaking a Masters of Science in Integrated Marketing Communications at Northwestern University’s Medill School. Contact Ruthie on @RuthieMFischer

Marketers! When It Comes To Bi-Cultural Markets, Do You Really Know What You Are Doing?

There are 50+ million Hispanics in the United States. Think about it. 50+ million. I stand proud as one of those millions. I was born in Mexico City, Mexico and have had the privilege of moving between the U.S. and Mexico all of my life. As a native-Spanish speaker, this experience has made me incredibly aware of what it means to be Bi-Cultural in the U.S. in the 21^st Century. Currently, I am a graduate student in the Northwestern Medill IMC program with a deep interest in the impact that this continuously emerging market will have across all industries in the U.S. and abroad, particularly in terms of marketing opportunities. If you are a marketer attempting to reach this target (or even someone seeking to expand your efforts to promising target markets), what does the significant growth of the Hispanic population in the U.S. mean for you?

In a recent blog published on the Huffington Post, Chris Cummings (CEO of Curiosity Media) notes that “the growth of the Hispanic population has translated into a powerful consumer base with buying power estimated to exceed 1.3 trillion by 2013.”

This growth (and spending ability) carries a need for:

A) Bilingual services which permeate every industry in the U.S.

B) (For marketers,) a careful analysis of what it means for this population to be labeled with a pan-ethnic label like "Hispanic" or "Latino".

We run the risk of failing to create powerful connections with these consumers by pigeonholing groups of people—which otherwise are vastly different culturally—under an overarching umbrella like “Hispanic” or “Latino” solely because they share a common language. Ignoring how sensitive definitions of identity among Hispanic groups are can severely compromise the effectiveness of your marketing campaign for Bi-Cultural markets.

In April 2012, the Pew Hispanic Center published a report titled “When Labels Don’t Fit: Hispanics and Their Views of Identity,” meant to showcase a conversation about identity facilitated by Latino/Hispanic journalists, scholars, and civic leaders in the U.S. A nationwide survey of Hispanic adults found that 51% of Hispanics say they most often identify themselves by their family’s country of origin; just 24% say they prefer a pan-ethnic label. Furthermore, 69% versus 29% of survey respondents say that Latinos in the U.S. have—often—varying cultures and not a single common culture.

Are you catching what I’m dropping?! As a marketer seeking to reach Bi-Cultural markets, this is the best time to think outside the box and not limit your efforts to the obvious—literal translations to Spanish. Your goal should be to speak fluent culture successfully with your target markets. Meeting these cultural needs will positively impact ROIs for companies seeking to maximize profits within markets that attract Spanish-speaking populations (remember that “1.3 trillion by 2013” spending power?).

This is obviously a multi-layered issue (my favorite part of this conversation) and finding the “sweet spot” will not be easy.

A good place for you to start is to consider:

1.   Who comprises your Bi-Cultural target market? For example, are they primarily U.S. born Hispanics or Hispanic immigrants? Chances are these two groups behave vastly different. The same is probably true for differing generations.

2.   Testing. Try varying translations or messages with all of your communications. As a resident of Chicago, so often I see ads which I can recognize were literal English translations to Spanish. They work—but they read (or talk) insincere and would be so much better if they carried a cultural nuance to them. I promise you your consumers will respond better if they can tell you were thinking in Spanish the whole time.

3.   Immersing yourself in a little bit of Hispanic pop culture. Particularly, search for content directly from Latin American countries (or Spain). It can be anything—read the major newspapers (i.e. El Universal de Mexico), watch TV in Spanish (Azteca streams online), watch the latest movies, or listen to music in Spanish. This will help you get a feel for conversational language, and will help you reach your target markets in a way that is fresh and that is familiar to them.

Marketing to any target market is about relationships. Hispanics need stories they can relate to and that make them feel understood in an environment they don’t necessarily call home. Get this right, and the sky is the limit in terms of how much you can achieve with this group!

Karla Del Angel is a part-time graduate student at Northwestern's Medill program, studying Integrated Marketing Communications. Currently working at Northwestern’s Office of Alumni Relations and Development, she is very interested in brand strategy for bi-cultural markets and hopes to follow this career path upon graduation. Follow her @kdel87 and connect with her on LinkedIn: Karla Del Angel.