Challenges of COVID-19 impacts consumer perception about e-commerce platforms

ITCAN: UAE and KSA markets report increase in online orders for products as more people stay home

Mansour Althani, CEO & Co-founder of ITCAN

The pandemic created by the novel coronavirus (COVID 19) is driving consumers in the United Arab Emirates (UAE) and the Kingdom of Saudi Arabia (KSA) to turn to e-commerce platforms in getting their essential needs instead of going to shopping malls and retail stores, demonstrating an overnight shift of consumer behavior from bulk-buying to online shopping, according to ITCAN, a leading e-commerce technology and digital marketing company focused on e-commerce performance marketing.

The firm has reported that online orders on certain products such as skin care and other personal hygiene items have reflected an upward surge following new regulations by authorities to restrict outside activities and urging people to stay at home to curb the further spread of the coronavirus infection.

ITCAN noted the rapid increase in these categories between February 26 to March 26 in both countries. In the UAE, the rate of orders for skin care soared to 143.96 per cent with 99.92 per cent of the increase came from orders made by new users, revealing a conversion rate of 33.45 per cent in terms of website visitors or footfall. For the same category, orders in KSA rose to 105.37 per cent with 32.7 per cent by new users and a conversion rate of 63.59 per cent.

The makeup category also gained huge orders in the UAE reaching 275 per cent with 148.57 per cent ordered by new users. The conversion rate was 67.93 per cent. In KSA, the orders for makeup products shot up to 769.67 per cent by March 26 with 187.15 per cent of the orders from new users, leading to a conversion rate of 276.48 per cent.

Mansour Althani, CEO & Co-founder of ITCAN, said: “The current global health situation is leading consumers worldwide to adapt to alternative ways of getting their goods, particularly through online shopping and they are likely to spike even more as cities raise the level of restrictions on people’s movement outside their homes. This shift in consumer behavior puts e-commerce platforms on the forefront to support people in the region who are still used to shopping their needs in malls and stores to move towards online marketplaces.”

Althani noted that although the situation across the GCC is under control and essential goods are very much available in all supermarkets, there continues to be a high turnout on e-commerce platforms for safety and precautionary reasons.

“The online orders made between February 26 to March 26 reflects a big jump and this continuously increasing demand are pushing major e-commerce companies to start setting their own standards on what types of products are considered essential to manage the surge of orders and meet people’s needs accordingly. We see this event’s impact on consumer behavior towards online shopping will go beyond the current crisis and will serve as an impetus to further accelerating the growth of e-commerce in the region,” he added.

ITCAN cited previous studies which showed that up to 55 per cent of shoppers in the UAE and Saudi Arabia favor smartphones when buying online. More than 60 per cent of shoppers in the UAE and Saudi have made at least one online transaction, according to Bain & Company based on a 2017 report.

E-commerce is already a fast-growing market in the Middle East, however, its essential role in society has been highlighted by the current health crisis, solving people’s problems and potentially saving lives. As the virus affects many businesses, many have quickly responded to the need of the hour and improved their online presence to keep their customers and attract newcomers.