Africa and the Middle East are complex markets. There is a stark contrast between the high earning and high-worth consumer segments and the low-earning population. In Saudi Arabia, for instance, the average national income is $16,852 a year. But this conceals a much more complex picture. The least-affluent 50% of Saudi Arabians take home 7.8% of the national income. The richest 1% earn 19.7% of the national income. And the 49% of people who fall between the richest and the poorest share 72.5% of the national income. A similar pattern is repeated across the region. While income polarisation may be socially undesirable, for retailers it means that a substantial part of society that has the disposable income to spend on consumer goods.
The Local Payment Culture
The most common way to pay for online purchases in Africa and the Middle East is by card, which has a 44% market share4. Looking at the region as a whole, cash is the next most popular online payment method, with 23% of the e-commerce market. Bank transfers have 14%, and e-wallets and various other methods have an 11% and 8% share respectively.
The E-Commerce Market
The Middle Eastern and African countries covered by this research have an e-commerce market worth almost $79 billion, growing at a rate of 30% a year. In Middle Eastern markets, e-commerce accounts for around 5% of all retail purchases (varying from 0.6% in Morocco right up to 8.6% in Saudi Arabia). In Sub-Saharan Africa, 1.1% of all retail purchases are made online and 54% of those are completed on a mobile device. Most of the population people rely on tech — rather than traditional branches or face-to-face transactions — for access to financial services.