stateofpayments.com

Transcription

stateofpayments.com

STATE
OF
PAYMENTS
2015
stateofpayments.com
TABLE OF CONTENTS
E-COMMERCE
Marketsize
Seasonality
Transaction Ratios
Industry Survey
Industry Expert Interviews
TRAVEL & TOURISM
2
4
6
7
21
Marketsize
Seasonality
Transaction Ratios
Industry Survey
DEMOGRAPHICS
56
58
60
61
70
Population
Internet Users
Social Networks
Online Buyers
Online Buying by Genders
Age Groups Buying Online
ENTERTAINMENT
& EVENTS
Marketsize
Seasonality
Transaction Ratios
Industry Survey
Online Buying Categories
AIRLINES
Marketsize
24
26
28
29
38
Seasonality
Transaction Ratios
Industry Survey
73
75
77
78
87
Payment Methods
Income Levels
WHY THE STATE OF PAYMENTS?
About the Report
About the Authors
Methodology
MARKETPLACE SERVICES
Seasonality
Transaction Ratios
Industry Survey
41
43
44
52
89
90
91
97
98
99
100
106
107
113
113
114
MARKET SIZE - 2014
"Ecommerce is the fastest growing sector covered in this report and by 2020 it will be nipping on the heels of airlines to become the biggest. By then we predict UAE and KSA will have a combined ecommerce market of over $10 billion."
$7
billion
Arab World
$2.3
$1.5
$1.4
$0.56
$0.28
$0.21
UAE
KSA
Egypt
Kuwait
Lebanon
Jordan
billion
billion
billion
billion
billion
billion
stateofpayments.com |
02
MARKET SIZE - 2020
"Ecommerce is the fastest growing sector covered in this report and by 2020 it will be nipping on the heels of airlines to become the biggest. By then we predict UAE and KSA will have a combined ecommerce market of over $10 billion."
$13.4
billion
Arab World
$4.4
$2.9
$2.7
$1.07
$0.53
$0.4
UAE
KSA
Egypt
Kuwait
Lebanon
Jordan
billion
billlion
billion
billion
billion
billion
03
SEASONALITY
"Ecommerce is feast or famine with lulls from January through to August when fortunes turn in the run up to November and December. Sales soar before
Christmas and the New Year."
$30m
$27.7m
$27.7m
$15m
$0
-$13.3m
-$13.9m
$-15m
-$8.4m
-$9.8m
-$3.3m
-$4.7m
$1.8m
-$0.24m
$1.2m
-$4.6m
$-30m
Jan
Feb
Mar
Apr
May
June
July
Aug
Sep
Oct
Nov
Dec
Transaction Size
(See the methodology behind this analysis on pg 115)
04
SEASONALITY
"Ecommerce is feast or famine with lulls from January through to August when fortunes turn in the run up to November and December. Sales soar before
Christmas and the New Year."
108,797
100k
108,797
50k
12,249
$0
-231
-699
-9,983
12,033
-17,607
-34,923
-34,955
-50k
-68,719
-74,759
-100k
Jan
Feb
Mar
Apr
May
June
July
Aug
Sep
Oct
Nov
Dec
Transaction Volume
05
TRANSACTION RATIOS
"Acceptance ratios are low for ecommerce companies. This owes to the many startups in this space that are still developing effective checkout
pages on their websites."
74%
Acceptance
Ratio
0.05%
Chargeback
5%
Refund
06
INDUSTRY SURVEY
"We polled 60+ companies in ecommerce to get their view on how customers are behaving online."
WHAT IS MOST IMPORTANT TO YOU WHEN IT COMES TO ONLINE PAYMENTS?
Ecommerce companies are focused on increasing the number of transactions with the aim of capturing market share. In the future they will have to focus on
increasing their average order value."
25%
26%
34%
15%
Acceptance Ratio
Chargeback Ratio
Transaction Volume
Transaction Size
07
WHAT IS A MAJOR ONLINE PAYMENT CHALLENGE?
"Cash on delivery can be crippling for small ecommerce companies due to the costs and high return rates. Many firms are struggling to get to grips with this
local challenge."
13%
Fraud
16%
Acceptance Ratio
32%
26%
13%
Cash-on-Delivery
Alternatives
Increase Payment
options for
Customers
Increase Trust
on Checkout
with End Users
08
WHICH SOCIAL MEDIA CHANNEL WILL BE YOUR BIGGEST FOCUS FOR ONLINE
SALES AND CONSUMER ENGAGEMENT?
"Facebook is far and away the most important channel for ecommerce companies while Instagram has outstripped Twitter as the runner up. In 2016, Instagram
may well take pole position."
41%
23%
13%
Facebook
Twitter
4%
4%
Linkedin
Google +
9%
Pinterest
5%
Instagram
Others
09
HOW IMPORTANT ARE ALTERNATIVE PAYMENTS AND EASY INSTALLMENT PLANS
TO YOUR BUSINESS?
"Alternative payments are incredibly important in ecommerce as consumers refuse to pay online for physical goods. Ecommerce companies are also starting
to tinker with easy installment plans."
61%
Very important
24%
Important
10%
Somewhat important
5%
Not important at all
Alternative Payments
10
TO YOUR BUSINESS?
"Alternative payments are incredibly important in ecommerce as consumers refuse to pay online for physical goods. Ecommerce companies are also starting
to tinker with easy installment plans."
18%
Very important
13%
34%
Important
Somewhat important
35%
Easy Installment
11
WHICH MARKETING CHANNELS PROVIDE THE BIGGEST BOOST
TO E-COMMERCE SALES?
"Ecommerce companies are not heavily reliant upon paid media and instead focus on SEO, social and email marketing to increase market share."
16%
16%
13%
9%
SEO
Paid Search
7%
8%
7%
Content
Marketing
Affiliates
Online PR
12%
7%
Email
Marketing
User
Reviews
5%
Social Media
Refferals
Offline
Channels
12
WHICH PRODUCT CATEGORIES DO YOU SELL?
"Entertainment and electronics are the largest ecommerce sectors. Groceries is a small sub-sector, however, it could explode if major players make it a focus."
24%
23%
17%
12%
8%
Electronics
Fashion
Books
8%
Entertainment
Health
Sports
9%
Groceries
13
WHAT PERCENTAGE OF YOUR CUSTOMERS PAY WITH CREDIT CARDS/MOBILES
AND DO YOU ATTRACT RETURN CUSTOMERS?
"Ecommerce companies still haven’t cracked credit card payments and m-commerce – the winners in the run-up to 2020 will be brands that successfully
confront these challenges while building brand loyalty."
49%
39%
32%
34%
27%
27%
24%
18%
8%
0% 0%
100 - 90%
0%
15%
11%
11%
5%
0% 0%
89 - 75%
74 - 50%
Mobile Sales
49 - 25%
Credit Cards
24 - 0%
No Mobiles Sales
Repeat Buyers
14
WHAT IS YOUR BIGGEST CHALLENGE?
"Ecommerce is intensely competitive and each niche is filled by multiple providers. This means that acquiring market share is the most important consideration
for the vast majority of firms."
47%
28%
7%
9%
9%
0%
Acquiring
Market Share
Shopping Cart
Abandonment
Inventory
Management
Delivery
Returns
Pricing
15
WHAT IS THE MOST SIGNIFICANT FACTOR FOR CLOTHING RETURNS?
"Incorrect sizing is the most common reason for clothing returns. This may indicate that customers are unable to correctly size themselves when shopping
online."
16%
Wrong Item
42%
Wrong Size
5%
16%
21%
Item not as
described
Buyer changed
her mind
Couldn’t reach
the buyer
16
DO YOU SEE SUBSCRIPTION E-COMMERCE FASHION AS A VIABLE BUSINESS
MODEL? AND ARE RETAIL BRANDS A THREAT TO ECOMMERCE COMPANIES?
"Subscription ecommerce is clearly an intriguing prospect that could help boost brand loyalty in this competitive market. Interestingly, ecommerce companies
are not threatened by retail brands that may move into the online world."
37%
No
63%
Yes
Subscription Ecommerce
26%
Yes
74%
No
Retail Brands
17
WHICH OF THE FOLLOWING POSES THE BIGGEST CHALLENGE FOR YOU AS AN
ECOMMERCE?
"Maintaining the same level of service between offline and online stores has proven to be the most challenging aspect for many Ecommerces. Companies that
can innovate in this area stand to gain a big advantage over competitors."
25%
50%
25%
Building an
e-commerce site
Maintaining the same
level of service between
my offline and online store
Competing with existing
e-commerce players
18
DO YOU CURRENTLY ENGAGE IN OMNI-COMMERCE FOR YOUR BUSINESS AND
DO YOU PLAN ON MAKING YOUR ONLINE STORE A BIGGER FOCUS IN 2015?
WILL ONLINE SHOPPING OVERTAKE RETAIL SHOPPING BY 2020?
"Ecommerce businesses are split equally on the takeover of online shopping with 50% expecting it to take over retail shopping by 2020. Still there is
overwhelming agreement that in 2015 online needs to be a bigger focus."
100%
50%
100%
50%
0%
online shopping overtaking
retail shopping by 2020
Yes
No
engage in omni-commerce
for your business
Yes
No
0%
online store
a bigger focus in 2015
Yes
No
19
WHICH OF THE FOLLOWING WOULD YOU SAY IS A MAJOR FACTOR FOR
RETURNS FROM CASH-ON-DELIVERY?
"Logistics is clearly the largest issue affecting Cash-on-Delivery returns. The time between purchase and payment leads customers to change their mind and
abandon the sale."
20%
Product is not ready to ship to
customer by estimated delivery time
49%
Courier company takes
too much time to deliver
31%
Customer is not a serious buyer
20
INDUSTRY EXPERT INTERVIEWS
SOUQ.COM
JADOPADO
RONALDO MOUCHAWAR,
CEO
OMAR KASSIM,
CEO
"The Arab World has one of the highest mobile
penetration rates in the world which has led to mobile
e-commerce sales taking off in the last few years.
Mobile is the biggest platform for most e-commerce
merchant sales in the region. In many online shopping
categories, such as fashion, mobile sales are already
higher than web-based transactions, and by the end of
2015 we expect mobile to completely overtake web."
"Logistics and getting from point to point is a solved
problem, but the bottle neck is customs clearance. We
like to think the GCC is one large market, but in reality
it’s six countries each with their own customs rules
and regulations. Many a time, we’ve attempted a GCC
Customs union, which hasn’t gone anywhere yet.
Attempting to return a product from KSA to a seller in
the UAE is essentially treated as an export rather than
a returns, pushing fulfilment costs to be significantly
higher than they should be. The solution to this would
be to build industry bodies that lobby governments to
improve the customs environment and push for a
customs union to take place over the next two to three
years."
21
KHUDARJI
DEALGAMED
NASR SHAMMOUT,
CEO
ELHAKIM,
MARKETING MANAGER
"For e-commerce sites especially those who deal with
perishable items, such as ourselves, you cannot count
on any third party logistics for delivery fulfillment due
to the nature of the products that requires special
attention, quick delivery, and most importantly cheap
in order to make business sense. Some customers
expect immediate delivery like Pizza delivery, but
fulfillment realistically takes between 2-8 hours after
submitting the order which is not something that they
are used to. A few years ago services like this wouldn't
have even existed anywhere in the world, but now
more grocery eCommerce sites are popping up
everyday. For our region, there still needs to be an
adjustment phase for this behavior, whereas expats
are more used to such a service."
"In a fierce competition such as e-commerce in the
Arab world, an e-commerce business has always to
thrive for excellence, businesses have to create the
best customer online shopping experience. In a way
that users can navigate through a user friendly type
of website, they can easily search for a deal or a
product. In the e-commerce field you have to create
for your users a pleasant experience, one that can
have plenty of products to shop between a vast array
of different unique categories and brands. In today's
e-commerce, you need a sharp edged customer
service team that can serve users around the clock,
from questions, inquiries as well as helping them
through placing the order process over the phone, or
via the website Customer Service chat. To be able to
help the customer through the journey, as a whole."
22
MARKET SIZE - 2014
"Entertainment and Events is still a relatively small market in the Middle East and we predict 2020 revenues top out at $200 million. Growth is driven by the
UAE which is the hub for concerts and cultural events in the region."
$125
million
Arab World
$95
million
$10
million
$6.25
$2.5
$3.75
$1.25
UAE
KSA
Egypt
Kuwait
Lebanon
Jordan
million
million
million
million
24
MARKET SIZE - 2020
"Entertainment and Events is still a relatively small market in the Middle East and we predict 2020 revenues top out at $200 million. Growth is driven by the
UAE which is the hub for concerts and cultural events in the region."
$200
million
Arab World
$152
$16
$10
$4
$6
$2
million
million
million
million
million
million
UAE
KSA
Egypt
Kuwait
Lebanon
Jordan
25
SEASONALITY
"Seasonality is a strong force in this sector with pronounced lows during what has been Ramadan and significant surges in September and October when event
season starts in the region. As Ramadan moves forward into spring we expect to see transaction volume drop."
$12m
$6m
$ 3.71m
$0
-$0.96m
-$0.89m
-$0.85m
$ 0.88m
$0.53m
$0.03m
-$0.26m
-$0.92m
$ -0.21m
-$0.57m
$ -0.47m
$-6m
$-12m
Jan
Feb
Mar
Apr
May
June
July
Aug
Sep
Oct
Nov
Dec
Transaction Size
26
SEASONALITY
"Seasonality is a strong force in this sector with pronounced lows during what has been Ramadan and significant surges in September and October when event
season starts in the region. As Ramadan moves forward into spring we expect to see transaction volume drop."
20k
10k
9,506
2,462
0
-3,166
-2,779
-2,395
-2,251
-346
-520
2,369
-277
-1,885
-712
-10k
-20k
Jan
Feb
Mar
Apr
May
June
July
Aug
Sep
Oct
Nov
Dec
Transaction Volume
27
TRANSACTION RATIOS
"Entertainment and Events has the lowest acceptance ratio of any vertical in this report because many transactions take place offline. Merchants need to
develop modern, responsive websites and mobile apps to significantly modernize their online presence."
73%
Acceptance Ratios
0.56%
Refunds
0.04%
Chargeback
28
INDUSTRY SURVEY
"We polled seven companies in events and entertainment to get their view on how customers are behaving online."
WHAT IS THE MOST IMPORTANT TO YOU WHEN IT COMES TO ONLINE PAYMENTS?
"In this sector merchants are focused upon increasing the volume of transactions and eliminating chargebacks. In contrast, no respondents saw
the actual size of transactions as the most important element."
10
20
30
70
0%
100
Transaction Volume
60
0
30
20
70
50
90
50%
40
100
Chargeback Ratio
10
20
60
80
10
50
90
100
0
70
90
100
Acceptance Ratio
50%
40
80
20
60
80
0%
50
30
70
90
10
40
80
0
60
0
50
30
40
Transaction Size
29
"Merchants in this sector are looking for ways to provide consumers with diverse options for making payments. Acceptance ratios are a secondary concern despite poor performance across the vertical."
42%
17%
Fraud
25%
17%
0%
Acceptance Ratio
Cash-on-Delivery
Alternatives
Increase Payment
options for
Customers
Increase Trust
on Checkout
with End Users
30
"Facebook and Twitter are the networks of choice for marketers in events and entertainment, however, Instagram is becoming a more important channel for
driving engagement and sales."
31%
31%
19%
Facebook
Twitter
0%
6%
6%
Linkedin
Google +
Pinterest
6%
Instagram
Others
31
TO YOUR BUSINESS?
"Alternative payments are incredibly important to events and entertainment companies as they struggle to gain trust from consumers online. Easy installment
plans on the other hand are low priority due to the small basket size of most tickets."
Easy Installments
0%
0%
Very important
17%
17%
33%
33%
50%
50%
Important
Somewhat important
32
WHICH MARKETING CHANNELS PROVIDE THE BIGGEST BOOST TO ONLINE
TICKET SALES?
"The industry is heavily reliant on paid search which provides the fastest route to brand visibility and conversions. Marketers in events and entertainment were
much more focused on PPC than their counterparts in other verticals."
44%
11%
11%
11%
11%
0%
SEO
11%
0%
Paid Search
Content
Marketing
Affiliates
Online PR
Email
Marketing
User
Reviews
Social Media
0%
0%
Refferals
Offline
Channels
33
HOW DO YOU DELIVER TICKETS TO YOUR CUSTOMERS?
"The industry relies heavily on email, mobile and print to deliver tickets. Interestingly print and mobile have carved out a slight edge over email."
50%
40%
33%
33%
33%
30%
20%
10%
Email tickets
Smartphone app
Print
0%
0%
All the above
Ticket Delivery
34
WHAT ARE YOUR MAJOR CHALLENGES?
"Ticket cancelations are overwhelmingly regarded as the biggest challenge across the events and entertainment section."
50%
50%
37%
40%
30%
20%
13%
10%
Ticket cancellations
Ticket distributions
Overseas purchases
0%
0%
Event management
Major Challenges
35
WHAT PERCENTAGE OF YOUR CUSTOMERS PAY WITH CREDIT CARDS OR VIA
MOBILES?
"Mobile transactions are limited in events and entertainment and one third of respondents have mobile transaction rates of less than 25%. Credit card
payments are also clearly a major challenge."
50%
33%
17%
0%
0%
0%
100-90%
89-75%
74-50%
49-25%
24-0%
No Mobile Sales
Mobile Sales
36
WHAT PERCENTAGE OF YOUR CUSTOMERS PAY WITH CREDIT CARDS OR VIA
MOBILES?
"Mobile transactions are limited in events and entertainment and one third of respondents have mobile transaction rates of less than 25%. Credit card
payments are also clearly a major challenge."
50%
33%
17%
0%
0%
100-90%
89-75%
74-50%
49-25%
24-0%
Credit Cards
37
TIX BOX
TICKETMASTER
SIA S. FAR,
MANAGING PARTNER
DAVID GRISHAM,
MANAGING DIRECTOR
"I believe with the global technological advancements
we have witnessed in the past few years, consumers
feel more and more comfortable using online
platforms to complete their transactions rather than
offline. The growing awareness on security and
reliability of online purchases is a major contributor
to customer’s interest to prefer online transactions to
offline as it is more convenient in today’s world where
time is the most valuable commodity."
"The explosion of internet users has been tremendous
over the past decade and the rise of smartphones and
tablets has contributed to the shift in the buying
behavior of audiences. With easy and instant access
to information about live events online consumers can
find out when and where events around them are
happening.
Nothing beats the convenience of
purchasing tickets online or through a smartphone;
the liberty to buy anytime of the day and not having
to deal with the hassles of rushing to a store to buy
tickets. When the online consumer experience is
offered with an easy to use and interactive ticketing
site like ours, their tickets to an unforgettable
experience is just a click away!"
38
IHJOZ
EVENTTUS
SAMI TUENI,
CEO
MAI MEDHAT,
CEO
"The entertainment and events industry is undergoing
a digital transition to dematerialize intangibles such
as tickets, vouchers and reservations that are
traditionally sold physically. Online sales and
payments are just a part of the equation to a
successful transition. The industry needs world-class
platforms and tools to provide a harmonious,
centralized and unified system to manage sales across
all channels. ihjoz provides a complete end to end
platform and marketplace to manage events, tickets,
sales, distribution, attendees and access control. To
reach 100% of event goers, ihjoz integrates a unique
digital distribution and payment network including
online and mobile payment providers, hundreds of
points of sale and thousands of points of payments.
Organizers are also provided with tools to handle
venue, “at the door” sales and printing of tickets.
Platforms like ihjoz enables the entertainment and
events industry to seamlessly break the distinction
between the online and offline realm."
"The events space is moving into mobile based
technologies. With mobile based tickets, it’s easier
and faster than before to check-in attendees at
events with a very smooth registration process
specially in big entertainment events. Also, mobile
based tickets open an endless opportunities for
attendees engagement during events, with
technologies like iBeacons and NFC, attendees can
receive personalized content on their smartphone
directly or pay their coke during a concert with their
smartphone. I believe mobile based tickets allows
event owners to generate more revenues which
definitely will lead to increase in the number of events
and enhance the quality of events."
39
SEASONALITY
"Marketplace Services has less seasonality than other sectors as demand tends to be consistent. January and February are the low season as consumers tighten
their belts after the New Year and have fewer days to transact during February."
$
$
$144k
$64k
$
$56k
$140k
$
$16k
$
$24k
$
$15k
$
$9k
$
$
$0
$42k
$
$
$200k
$16k
-$121k
$-400K
$
$-200k
-$407k
$-600k
Jan
Feb
Mar
Apr
May
June
July
Aug
Sep
Oct
Nov
Dec
Transaction Size
41
SEASONALITY
"Marketplace Services has less seasonality than other sectors as demand tends to be consistent. January and February are the low season as consumers tighten
their belts after the New Year and have fewer days to transact during February."
$
-4K
$
-2k
312
1,488
$
$
1,582
1,091
780
$
$
492
$
579
$
55
$
$
0
236
$
$
2k
312
-2,288
-4,166
-6k
Jan
Feb
Mar
Apr
May
June
July
Aug
Sep
Oct
Nov
Dec
Transaction Volume
42
TRANSACTION RATIOS
"This sector has very healthy acceptance, chargeback and refund ratios indicating that companies have excellent ecommerce teams and systems
in place."
Acceptance Ratio
85%
Chargeback
0.03%
Refunds
0.05%
43
INDUSTRY SURVEY
"We polled 21 companies in Marketplace Services to get their view on how customers are behaving online."
"Acceptance ratios are incredibly important for companies in this sector while the actual size of transactions seems to be a secondary priority."
60%
15%
25%
0%
Acceptance Ratio
Chargeback Ratio
Transaction Volume
Transaction Size
44
"Cash on delivery and increasing trust on checkout are the most significant challenges for firms in this sector. Thankfully, fraud is not a major concern."
28%
15%
13%
Fraud
Acceptance Ratio
17%
Cash-on-Delivery
Alternatives
Increase Payment
options for
Customers
28%
Increase Trust
on Checkout
with End Users
45
TO YOUR BUSINESS?
"Alternative payments are an area of focus for service companies. Easy installment plans on the other hand are less important and companies are still figuring
out whether they are applicable to their businesses."
62%
29%
10%
14%
14%
Very important
Important
29%
24%
19%
Easy Installments
Somewhat important
46
"Facebook and Twitter continue to be a major focus for the Service industry, however, LinkedIn and Google+ are gaining popularity as they allow access to
professional networks."
38%
24%
14%
14%
Facebook
Twitter
Linkedin
4%
2%
Google +
Pinterest
4%
Instagram
Others
47
WHAT PERCENTAGE OF YOUR CUSTOMERS PAY WITH CREDIT CARDS/MOBILES
AND DO YOU ATTRACT RETURN CUSTOMERS?
"Mobile sales and credit card purchases are incredibly important for this sector, yet a large amount of transactions still happen through desktops and offline
payment methods."
43%
38%
33%
29%
33%
33%
29%
14%
10%
10%
10%
5%
5%
0%
100 - 90%
10%
0%
0%
74 - 50%
89 - 75%
Mobile Sales
24 - 0%
49 - 25%
Credit Cards
0%
No Mobiles Sales
Repeat Buyers
48
WHICH MARKETING CHANNELS PROVIDE THE BIGGEST BOOST TO
E-COMMERCE SALES?
"Search engine optimization is crucial for services companies that rely upon traffic via long tail keywords to generate brand visibility and conversions. Referrals
are also very important for companies in this sector."
26%
17%
13%
13%
9%
4%
SEO
Paid Search
4%
Content
Marketing
4%
Affiliates
4%
4%
Online PR
Email
Marketing
User
Reviews
Social Media
Refferals
Offline
Channels
49
WHERE DO YOU PLAN TO INVEST IN THE RUN-UP TO 2020?
"Marketplace service companies are intent on building apps. As we move towards m-commerce acceptance this is absolutely crucial for small and large firms
alike."
48%
33%
Mobile Apps
10%
10%
Social Media
Integration
Payment Methods
Improving platform
Functionality
50
WHAT TYPE OF USERS ARE THE MOST DIFFICULT TO ACQUIRE?
"Most service companies agree that buyers are the most difficult user type to acquire."
67%
19%
Buyers
Sellers
14%
Both
51
WHICH PRODUCT CATEGORIES DO YOU SELL?
"Most companies provide no physical goods alongside their main services, it may be an inability to sample services that scares off buyers."
62%
19%
Services
Physical Goods
19%
Both
52
BAYT
DUBIZZLE
NAUMAN ASIF MIAN,
CFO
AHMED ERAQI,
GENERAL MANAGER - EGYPT
"In terms of the rise of social networks, the Bayt.com
formula is clear, and it has helped us succeed and
grow during the rise of several trends and changes in
our history as an organization, from the dot com
bubble to the 2008 financial crisis. The formula is: at
Bayt.com, we focus on where people need the most
help in their lives (in the Middle East, the Arab spring
has proven the answer is obvious: finding jobs), build a
solution that preferably capitalizes on technology for
scale and efficiency, and then obsess about
continually improving it – add all three ingredients
and presto, the result is Bayt.com."
"For the classifieds industry, the best performing
categories are is the sale category which includes 21
subcategories such as mobiles, computers, tablets,
motorcycle, music instruments, baby items, home
appliances, electronic, pets, and so forth. As the region
continues to move towards a mobile-first approach, we
believe that the next 5 years will show a massive
increase for the region's online classifieds industry,
especially for items in the for sale category."
53
SOUQALMAL
EL WAFEYAT
AMBAREEN MUSA,
CEO
YOUSEF ELSAMMAA,
CEO
"The role of comparison sites is to bring transparency
and simplify options for the customer. Sites like
Souqalmal.com provides an extremely simple
platform to assess all options in one go without
having to go to each and every bank. This new
concept of comparison has changed the way
customers shop for their financial product and what
they need to look out for when comparing the
different options. We now have more educated
customers on one hand and on the other a cost
effective platform for banks to reach out to the
customers who are actively searching for their
products. All in all, comparison sites like
Souqalmal.com is a much needed addition to the
banking landscape as it provides transparency to
customer providing a much higher level of financial
education and a cost effective platform for banks to
reach out to more educated customers who are in the
market for their products."
"I think that we're seeing a lot of positive change in the
region, things we never thought we would see online are
already online, such as getting a ride somewhere or
something as small as an electrician going online to get
more exposure to clients. The rising trend of startups in
the region is also very exciting, you see a lot of small
startups trying to shift traditional models online, such
as ElWafeyat, pushing the very traditional models that
has been dominating our society for years. I think a
major shift is going to happen within the next five years
with cheaper, faster, easier and more convenient
options becoming available. The key factor here is how
much payments & security are advancing, the more
people feel it's safe and secure to finish their
transactions online, the easier it will become for that
shift to inevitably happen."
54
MARKET SIZE - 2014
"Travel and Tourism sector in ecommerce alone will pass $5 billion. Growth will be relatively even across the Arab World, however, Kuwait and KSA will see their
markets expand at slightly faster rates."
$3.6
billion
Arab World
$1.14
billion
UAE
$0.92
billion
KSA
$0.87
billion
Egypt
$0.13
billion
Kuwait
$0.05
billion
Lebanon
$0.04
billion
Jordan
56
MARKET SIZE - 2020
"Travel and Tourism sector in ecommerce alone will pass $5 billion. Growth will be relatively even across the Arab World, however, Kuwait and KSA will see their
markets expand at slightly faster rates."
$5.3
n
lio
bil
Arab World
$1.7
billion
UAE
$1.4
billion
KSA
$1.3
billion
Egypt
$0.2
billion
Kuwait
$0.07
billion
Lebanon
$0.06
billion
Jordan
57
SEASONALITY
"The vast majority of transactions occur in the months from August to December, however, there is also a short surge in bookings in the month before
Ramadan as people set their plans to travel to cooler climates."
$6m
$5.8m
$3m
$4.9m
$2.8m
$0
$2.8m
$0.64m
-$2.1m
$-3m
-$1.7m
-$3.1m
-$2.1m
-$1.5m
-$2.2m
-$4m
$-6m
Jan
Feb
Mar
Apr
May
June
July
Aug
Sep
Oct
Nov
Dec
Transaction Size
58
SEASONALITY
"The vast majority of transactions occur in the months from August to December, however, there is also a short surge in bookings in the month before
Ramadan as people set their plans to travel to cooler climates."
30k
31,728
26,673
20k
26,673
21,568
13,378
10k
8,388
8,248
9,968
7,273
4,758
0
8,943
523
-10k
Jan
Feb
Mar
Apr
May
June
July
Aug
Sep
Oct
Nov
Dec
Transaction Volume
59
TRANSACTION RATIOS
"Travel and tourism has the highest ratio of chargebacks of any sector surveyed in this report. OTAs must ensure they guard closely against fraud
as they set up their online payment gateways."
Acceptance
Ratio
0.75%
75%
Chargeback
Refunds
0.11%
60
INDUSTRY SURVEY
"We polled thirty one companies in travel and tourism to get their view on how customers are behaving online."
"Travel and tourism companies are focused upon transaction volume due to large seasonal lulls. Acceptance ratios are also a major concern."
90
80
70
90
80
70
70
90
90
60
70
80
50
80
30
24%
40
Transaction Volume
20
30
Chargeback Ratio
41%
40
40
0%
10
1
20
30
30
50
60
Acceptance Ratio
20
20
40
35%
1
60
1
0
0
0
10
50
1
0
0
0
10
60
0
0
0
10
50
0
0
0
Transaction Size
61
"Fraud is the largest challenge that faces companies in travel and tourism. This aligns with the high chargeback ratios experienced across the sector."
32%
Fraud
16%
19%
Acceptance Ratio
Cash-on-Delivery
Alternatives
16%
16%
Increase Payment
Increase Trust on
options for Customers Checkout with End Users
62
"Facebook is the most important channel for marketers in travel and tourism. LinkedIn is a surprise entry and 15% of companies use it to drive sales and
engagement."
30%
25%
15%
15%
8%
5%
3%
Facebook
Twitter
Linkedin
Google +
Pinterest
Instagram
Others
63
TO YOUR BUSINESS?
"Easy installment plans have found a home in travel and tourism as customers are starting to spread their holiday splurges out over the calendar year. Luxury
travel providers are set to make great use of this tool in 2015/2016."
Easy Installments
-
-
-
-
-
-
-
-
-
-
-
-
-
-
22%
-
-
-
-
-
-
100
80
60
40
20
0
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
44%
-
-
-
-
33%
-
-
-
-
-
-
-
-
-
-
-
-
-
Very important
100
80
60
40
20
0
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
56%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
0%
-
-
Important
-
Somewhat important
100
80
60
40
20
0
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
17%
-
-
-
-
-
-
28%
-
-
-
-
-
100
80
60
40
20
0
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
0%
64
WHAT MARKETING CHANNELS PROVIDE THE BIGGEST BOOST TO ONLINE
TICKET SALES?
"User reviews are incredibly important in travel and tourism. Engines such as TripAdvisor have empowered customers and brands are learning to deal with that
new reality."
16%
14%
X
X
8%
X
SEO
Paid Search
10%
X
8%
4%
X
Content
Marketing
Affiliates
X
10%
14%
12%
X
X
X
2%
X
Online PR
Email
Marketing
User
Reviews
Social Media
Refferals
Offline
Channels
65
DO YOU OFFER ONLINE BOOKINGS AND WILL MOBILE BECOME DOMINANT
BY 2020?
"100% of companies surveyed offered online bookings and the vast majority expect mobile to become dominant by 2020. We are increasingly living in an app
centric world."
%
0
10
%
8
7
22%
0%
Online Booking
Yes
No
Mobile Booking
Yes
No
66
WHAT DISTRIBUTION CHANNEL IS CURRENTLY YOUR MAIN FOCUS FOR
BOOKINGS AND WHAT DO YOU EXPECT YOUR FUTURE FOCUS TO BE?
"Currently OTAs are focused on selling through the web, however, in the future some companies will shift that focus to m-commerce. Offline sales are also
likely to be less important in the future."
100%
80%
72%
60%
40%
20%
22%
6%
0%
Mobile
Social media
0%
Offline Sales
Website
PAX Booking 2014
67
WHAT DISTRIBUTION CHANNEL IS CURRENTLY YOUR MAIN FOCUS FOR
BOOKINGS AND WHAT DO YOU EXPECT YOUR FUTURE FOCUS TO BE?
"Currently OTAs are focused on selling through the web, however, in the future some companies will shift that focus to m-commerce. Offline sales are also
likely to be less important in the future."
100%
80%
67%
60%
33%
40%
20%
0%
0%
0%
Offline Sales
Website
Mobile
Social media
PAX Booking 2015
68
WHAT PERCENTAGE OF YOUR SALES COME FROM MOBILE?
"56% of OTAs still don’t sell through mobile. This number will change significantly as companies are forced to invest in apps and
m-commerce over the coming years."
100%
80%
56%
60%
17%
40%
17%
11%
20%
0%
0%
100 - 90%
89 - 75%
0%
74 - 50%
49 - 25%
24 - 0%
No Mobile Sales
69
TRAVELSTART
AKBAR TRAVELS
REMO GIOVANNI,
GENERAL MANAGER
AHMED KASIM,
OPERATIONS MANAGER
"By 2020, I see the majority of the transactions will be
done on mobile, that together with web will take the
bigger portion of flights/hotels bookings. Airlines will
take more and more online bookings and will probably
take more market share from traditional agencies.
Corporate will start to book more online, meta search
and OTA will probably merge in a mix model, and
among the OTA can be expected a lot of
consolidations with a few huge players, and not
necessary local players: in a region full of expats will
be interesting to see if a local brand will emerge and
invest strongly in marketing vs biggest global one.
And last but not least, cash won’t be the main
payment method any longer."
"Travel Agency business shifting to online was an
obvious change with the mobile and internet
penetration. But in the UAE, the scenario is different.
Here only retail travel business is affected by Online
Travel Agencies (OTA), since individuals prefer to issue
tickets themselves online by using credit cards. It is
convenient for them to issue tickets online. They don’t
need to go out and search for parking, in front of a
travel agency. They can issue tickets at the comfort of
their couch at home. But a large chunk of UAE travel
industry business is corporate travel. And corporate
still prefer a travel agent arranging their travel. And
they enjoy good credit period, flexibility of travel and
last moment changes. Here it’s about service."
70
GOEJAZA
MUSAFIR
HUSSEIN ALSAKKAF,
CEO
MOHIT RAJPAL, HEAD OF B2C
E-COMMERCE TRAVEL
"Online payments has played an important role in
improving the online travel industry in the last few
years. Traditionally travel was a complex industry that
made it hard for consumers to understand, but when
the industry began to shift online things started to
change. Nowadays travel bookings are much simpler
for consumers and online sites allow them to compare
and discover a wide range of options, at competing
price points. Online payments makes all of this more
efficient and allowed the online travel industry to
grow by 30% on a yearly basis.. And last but not least,
cash won’t be the main payment method any longer."
"The OTA landscape in the Arab World has
traditionally had 22% of transactions occur online. By
2020 we expect up to 70% of transactions to occur
online. The key factor for this shift is the growth of
mobile in the region. Smartphone penetration in the
Middle East is one of the highest in the world and
about 60% of mobile users are in the 20-39 age
group, and this age group will be the biggest driver of
e-commerce in the next 5 years. The other key growth
drivers for OTAs is how attractive it has become for
consumers to book holiday trips online. The
convenience and customization that you get from
building your holiday package online far outweighs
doing that offline and I believe that will become a
bigger trend in the next few years."
71
MARKET SIZE - 2014
"Online ticket purchases for airlines will emerge as a major source of revenue. The Arab World is turning into a travel hub and if growth continues towards 2020
it will become an enormous industry."
$11
billion
Arab World
$4.7
$2.2
$1.9
$0.4
$0.4
$0.3
UAE
KSA
Egypt
Kuwait
Lebanon
Jordan
billion
billion
billion
billion
billion
billion
73
MARKET SIZE - 2020
"Online ticket purchases for airlines will emerge as a major source of revenue. The Arab World is turning into a travel hub and if growth continues towards 2020
it will become an enormous industry."
$16.2
billion
Arab World
$6.9
$3.2
$2.8
$0.6
$0.6
$0.3
UAE
KSA
Egypt
Kuwait
Lebanon
Jordan
billion
billion
billion
billion
billion
billion
74
SEASONALITY
"The hot summer months are high season for the airline industry with June representing the peak in transactions and volume. This owes to the confluence of
Ramadan and the hottest months last year and we can expect high season to move forward along with the Holy Month."
$12m
$11.4m
$9.0m
$6.7m
$6m
$6.4m
$5.2m
$0
-$2.9m
$-6m
-$1.6m
-$0.98m
-$5.9m
-$8.5m
-$10.7m
$-12m
Jan
Feb
Mar
Apr
May
June
July
Aug
Sep
Oct
-$8.1m
Nov
Dec
Transaction Size
75
SEASONALITY
"The hot summer months are high season for the airline industry with June representing the peak in transactions and volume. This owes to the confluence of
Ramadan and the hottest months last year and we can expect high season to move forward along with the Holy Month."
20k
16,062
13,804
10k
10,736
0
2,864
256
- 2,442
- 4,624
-1,102
-2,634
-7,786
-10k
-12,012
- 13,120
-20k
Jan
Feb
Mar
Apr
May
June
July
Aug
Sep
Oct
Nov
Dec
Transaction Volume
76
TRANSACTION RATIOS
"The airlines industry has a sterling acceptance ratio of 82%. The industry is populated with established players who can invest significantly in ecommerce and
strong payment gateways."
77
INDUSTRY SURVEY
"We polled eleven airlines to get their view on how customers are behaving online."
"Airlines are focused on increasing their ratio of successful payments. This has clearly paid dividends with the acceptance ratio already at 82%."
50%
10%
20%
20%
Acceptance Ratio
Chargeback Ratio
Transaction Volume
Transaction Size
78
"Acceptance ratio is still seen as a major challenge. In instances where payment fails it’s quite likely that consumers will move to different providers in this
highly competitive market."
13%
40%
27%
Fraud
Acceptance Ratio
Cash-on-Delivery
Alternatives
20%
0%
Increase Payment
Increase Trust on
options for Customers Checkout with End Users
79
"Facebook is still king for airlines with Twitter and Instagram taking second and third prize respectively. Google+ is drawing zero interest from marketers in
this space."
39%
28%
22%
11%
Facebook
Twitter
Linkedin
0%
0%
Google +
Pinterest
0%
Instagram
Others
80
TO YOUR BUSINESS?
"Airlines have recognized the importance of easy installment plans. As air tickets can be very expensive it makes sense for consumers to spread those repayments out over a period of months."
-
-
-
-
-
-
-
-
50%
-
-
-
-
-
-
-
-
-
-
100
80
60
40
20
0
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
30%
-
-
-
-
-
-
-
-
-
-
10%
-
Very important
-
-
100
80
60
40
20
0
Easy Installments
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
60%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
10%
-
-
-
-
-
-
Important
Somewhat important
100
80
60
40
20
0
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
30%
-
-
-
-
-
-
-
-
-
-
10%
-
-
-
100
80
60
40
20
0
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
0%
81
WHAT MARKETING CHANNELS PROVIDE THE BIGGEST BOOST TO ONLINE
TICKET SALES?
"Email marketing, SEO and social media are crucial marketing channels for airlines. SEO in particular is of great importance as organic traffic is the lifeblood
of many airlines in the Arab World."
15%
15%
15%
10%
10%
5%
SEO
Paid Search
15%
Content
Marketing
5%
Affiliates
5%
Online PR
5%
Email
Marketing
User
Reviews
Social Media
Refferals
Offline
Channels
82
DO YOU SEE WEARABLES, MOBILE PURCHASES AND ONBOARD PURCHASES
IMPORTANT FOR THE AIRLINE INDUSTRY?
"Airlines are heavily focused on mobile purchases and mobile wallets, however, they are still figuring out what to do with wearables."
100%
100%
63%
38%
0%
Mobile Sales
Yes
No
0%
On-Board Purchase
Yes
No
Wearables
Yes
No
83
WHICH ONLINE DISTRIBUTION CHANNEL IS THE MOST VALUABLE FOR
BOOKINGS AND WHAT WILL YOU FOCUS ON IN 2015?
0%
10%
20%
30%
20%
20%
30%
30%
40%
50%
Your website
OTA platform
Mobile
Social media
PAX Booking 2014
84
WHICH ONLINE DISTRIBUTION CHANNEL IS THE MOST VALUABLE FOR
BOOKINGS AND WHAT WILL YOU FOCUS ON IN 2015?
0%
10%
10%
20%
20%
30%
40%
30%
40%
50%
Your website
OTA platform
Mobile
Social media
PAX Booking 2015
85
WHAT PERCENTAGE OF YOUR SALES COME FROM MOBILE?
"Four out of eleven airlines said that 90%+ of their sales come from mobile."
30%
100-90%
89-75%
10%
20%
74-50%
20%
49-25%
24-0%
10%
No Mobile Sales
10%
86
AIR CAIRO
YASSER EL RAMLY, CEO
"Airlines today must strive to achieve the best expectations for
their valued guests, in a manner that is safe, convenient and
efficient. A solid booking system with a secure payment solution
is critical for airlines to deliver this experience, especially for
online sales were customers are using more as their preferred
booking channel. It's also critical that airlines decrease their
fraud ratio and minimize loss rejected to generate the maximum
amount of sales and deliver the best customer support at the
same time."
87
POPULATION
"The Arab World is dominated by the major population centers of Saudi Arabia and Egypt. These two markets present the greatest opportunities for ecommerce, however, both present regional challenges that inhibit growth."
9.3m
28.8m
3.4m
82.1m
UAE
KSA
EGYPT
6.5m
4.5m
KUWAIT
LEBANON
JORDAN
89
INTERNET USERS
"Egypt is the largest internet market followed by Saudi Arabia. UAE has a large, mature internet population and a relatively high rate of internet penetration.
These three markets will drive change in the Arab World’s ecommerce industry."
40.7m
17.4m
8.2m
3.2m
2.9m
LEBANON
JORDAN
2.6m
UAE
KSA
EGYPT
KUWAIT
90
SOCIAL NETWORKS - UNITED ARAB EMIRATES
"The popularity of social networks varies across the region. Facebook is powerful in Egypt and UAE, while Instagram and Twitter do well in Saudi Arabia. Lebanon surprisingly is heavily reliant upon LinkedIn."
100%
90%
80%
83%
70%
60%
50%
46%
40%
38%
35%
32%
30%
20%
13%
10%
4%
7%
2%
0%
6%
5%
x
Facebook
Twitter
Google+
Linkedin
Instagram
Pinterest
Tumblr
Snapchat
Vine
Others
I dont use
Social Media
91
SOCIAL NETWORKS - KINGDOM OF SAUDI ARABIA
100%
90%
80%
70%
67%
60%
59%
52%
50%
40%
31%
30%
20%
22%
19%
6%
10%
9%
0%
4%
3%
3%
x
Facebook
Twitter
Google+
Linkedin
Instagram
Pinterest
Tumblr
Snapchat
Vine
Others
I dont use
Social Media
92
SOCIAL NETWORKS - EGYPT
100%
95%
90%
80%
70%
60%
52%
50%
40%
37%
30%
29%
27%
20%
9%
10%
4%
0%
3%
3%
1%
1%
x
Facebook
Twitter
Google+
Linkedin
Instagram
Pinterest
Tumblr
Snapchat
Vine
Others
I dont use
Social Media
93
SOCIAL NETWORKS - KUWAIT
100%
90%
80%
82%
70%
60%
50%
43%
40%
39%
31%
30%
34%
20%
10%
9%
3%
5%
4%
1%
0%
3%
x
Facebook
Twitter
Google+
Linkedin
Instagram
Pinterest
Tumblr
Snapchat
Vine
Others
I dont use
Social Media
94
SOCIAL NETWORKS - LEBANON
100%
90%
92%
80%
70%
60%
54%
50%
48%
48%
40%
38%
30%
20%
13%
10%
10%
4%
0%
5%
3%
0%
x
Facebook
Twitter
Google+
Linkedin
Instagram
Pinterest
Tumblr
Snapchat
Vine
Others
I dont use
Social Media
95
SOCIAL NETWORKS - JORDAN
100%
90%
89%
80%
70%
60%
50%
43%
40%
36%
38%
31%
30%
20%
11%
10%
4%
0%
3%
4%
3%
1%
x
Facebook
Twitter
Google+
Linkedin
Instagram
Pinterest
Tumblr
Snapchat
Vine
Others
I dont use
Social Media
96
ONLINE BUYERS
"Egypt has the most online buyers of any country in the Arab World. However, by proportion of the population, the UAE and Kuwait have more online buyers
and are easier for ecommerce companies to penetrate."
10.6m
6.8m
UAE
2.4m
15.2m
KSA
2.6m
KUWAIT
LEBANON
EGYPT
1.6m
JORDAN
97
ONLINE BUYING BY GENDER
"Women continue to buy very little online. The lone exception to this rule is UAE where inclusion in the online economy is approaching parity. In the run-up to
2020, it should be a focus of Arab governments to extend the benefits of the digital world to the entire population."
59%
61%
77%
41%
39%
23%
UAE
KSA
EGYPT
73%
69%
72%
27%
31%
28%
KUWAIT
LEBANON
JORDAN
Male
Female
98
AGE GROUPS BUYING ONLINE
"26-35 year olds are the largest ecommerce market in the Arab World and brands must appeal to them in order to succeed. Firms in Saudi Arabia must also
target the 18-25 bracket as this accounts for a quarter of the market share."
50%
40%
50%
46%
43%
42%
42%
34%
30%
25%
20%
20%
19%
14%
10%
10%
21%
20%
8%
15%
10%
13% 13%
15%
9%
5%
15%
16%
18%
17%
12%
8%
16% 15%
9%
0%
UAE
KSA
18 - 25
EGYPT
26 - 35
KUWAIT
36 - 40
41 - 50
LEBANON
JORDAN
50+
99
ONLINE BUYING CATEGORIES - UNITED ARAB EMIRATES
"Consumers in different Arab countries have very divergent purchasing behavior online. Airline tickets, hotel reservations and electronics tend to be the most
readily adopted categories, however, the degree to which people buy those products online varies considerably."
70%
64%
60%
50%
40%
40%
37%
30%
29%
24%
20%
17%
16%
11%
10%
12%
8%
6%
5%
5%
5%
4%
0%
e
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100
ONLINE BUYING CATEGORIES - KINGDOM OF SAUDI ARABIA
70%
60%
50%
40%
39%
38%
30%
30%
28%
18%
20%
20%
13%
10%
10%
10%
6%
6%
5%
6%
4%
2%
0%
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s
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101
ONLINE BUYING CATEGORIES - EGYPT
70%
60%
50%
40%
39%
30%
29%
22%
23%
20%
20%
14%
12%
10%
10%
7%
7%
4%
0%
3%
7%
4%
3%
e
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102
ONLINE BUYING CATEGORIES - KUWAIT
70%
62%
60%
50%
40%
38%
30%
27%
24%
20%
14%
11%
10%
11%
10%
8%
11%
9%
5%
4%
2%
1%
0%
e
s
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103
ONLINE BUYING CATEGORIES - LEBANON
70%
60%
50%
41%
40%
37%
34%
30%
29%
22%
20%
24%
17%
15%
10%
11%
9%
8%
4%
3%
0%
4%
1%
e
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p
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Id
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&
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x
104
ONLINE BUYING CATEGORIES - JORDAN
70%
60%
50%
45%
40%
30%
20%
20%
22%
20%
17%
12%
10%
9%
6%
7%
5%
4%
3%
2%
0%
5%
2%
e
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x
105
PAYMENT METHODS
"Cash is still the preferred method of payment for ecommerce goods, especially in Egypt where 72% of consumers use cash. It seems cash on delivery is here
to stay."
80%
72%
70%
60%
60%
59%
51%
50%
40%
39%
53%
41%
38%
36%
30%
26%
26%
22%
20%
20%
10%
2%
0%
CREDIT/DEBIT CARD
UAE
KSA
CASH
4%
2% 1% 1% 2%
CASHU
EGYPT
KUWAIT
5%
6%
1% 2% 2%
5%
PAYPAL
LEBANON
3% 5% 3%
6%
7%
OTHERS
JORDAN
106
INCOME LEVELS - UNITED ARAB EMIRATES
"The spread of income distribution is consistent across Kuwait, UAE, Saudi Arabia and to an extent Lebanon. Egypt and Jordan on the other hand have a larger
proportion of consumers towards the lower end of the income spectrum."
30%
25%
22%
20%
18%
15%
13%
13%
13%
10%
7%
7%
5%
4%
3%
0%
<266
$266 - $799
$800 - $1599
$1600 - $2665
$2666 - $5332
$5333 - $7999
$8000 - $13332
$13333>
Prefer not to say
107
INCOME LEVELS - KINGDOM OF SAUDI ARABIA
30%
25%
22%
21%
20%
15%
10%
14%
14%
12%
11%
5%
3%
2%
1%
$8000 - $13332
$13333>
0%
<266
$266 - $799
$800 - $1599
$1600 - $2665
$2666 - $5332
$5333 - $7999
Prefer not to say
108
INCOME LEVELS - EGYPT
40%
37%
35%
30%
25%
20%
21%
17%
15%
14%
10%
6%
5%
3%
0%
<266
$266 - $799
$800 - $1599
$1600 - $2665
$2666 - $5332
1%
$5333 - $7999
1%
$8000 - $13332
.40%
$13333>
Prefer not to say
109
INCOME LEVELS - KUWAIT
30%
25%
23%
20%
19%
17%
15%
15%
13%
10%
6%
5%
3%
2%
2%
0%
<266
$266 - $799
$800 - $1599
$1600 - $2665
$2666 - $5332
$5333 - $7999
$8000 - $13332
$13333>
Prefer not to say
110
INCOME LEVELS - LEBANON
30%
25%
24%
20%
20%
20%
16%
15%
10%
7%
5%
5%
5%
1%
2%
0%
<266
$266 - $799
$800 - $1599
$1600 - $2665
$2666 - $5332
$5333 - $7999
$8000 - $13332
$13333>
Prefer not to say
111
INCOME LEVELS - JORDAN
40%
38%
35%
30%
29%
25%
20%
15%
11%
10%
7%
5%
6%
5%
2%
0%
<266
$266 - $799
$800 - $1599
$1600 - $2665
$2666 - $5332
$5333 - $7999
1%
1%
$8000 - $13332
$13333>
Prefer not to say
112
WHY THE STATE OF PAYMENTS?
ABOUT THE REPORT
Welcome to the State of Payments 2015 by Payfort. This is our annual report on the world of
The report is divided into five sections: Airlines, Travel and Tourism, Ecommerce,
payments, ecommerce and innovation in the Arab World.
Marketplace Services and Demographics. Geographically the report covers Egypt, Lebanon,
Jordan, Kuwait, Saudi Arabia and UAE. It is divided into responsive, interactive sections so
With data from the consumer and merchant side this report provides actionable insight that
you can view the data easily and with specific attention to your vertical.
will help you create a more successful, profitable and consumer friendly business.
We hope you like it and use it as a starting point for a conversation about the state of
A year ago we released our first iteration of the State of Payments. That effort came out
payments in the Arab World.
of a desire to increase our own understanding of the behavior of consumers in the
countries we operate in and to share that information with the growing ecommerce
community in the Arab World.
ABOUT THE AUTHORS
This year’s report contains the same consumer-centric data that will help you
This report was written and created by the Payfort Team. Words were provided by Faisal
understand the market’s behavior in regards to payments and ecommerce. But it also
presents a much fuller picture by taking in the opinions of hundreds of merchants
Al-Khalidi, Omar Soudodi and Nardeen Abdalla while art came from the imagination and
cursor of Seham Syed.
who interact with consumers on a day-to-day basis.
We encourage you to share your thoughts on the report via social media on
#StateofPayments or by sending an email to Faisal Al Khalidi ([email protected]).
Faisal Al-Khalidi
Content & Community Manager
Nardeen Abdalla
Marketing Director
Omar Soudodi
Managing Director
Seham Syed
Senior Designer
113
METHODOLOGY
Great care and detail was put into the data that informs this report. The Payfort team worked in conjunction with partners, merchants and consumers to gather primary and secondary data. The heart
of our research was surveys that we conducted with hundreds of merchants and thousands of consumers across Egypt, UAE, Jordan, Lebanon, Kuwait and Saudi Arabia. This data was broken
down by our in-house team of market analysts and country managers. Please find below notes on specific elements of the data. If you have any questions don’t hesitate to email Faisal Al Khalidi
([email protected]). We will also try to accommodate any additional data requests if there are any areas where you are looking for a little bit of extra information.
Market Sizes
We used a bottom-up approach to evaluate the market and calculate market sizes. We
researched the number of consumers in each market as well as average user behavior and
combined this data with feedback from companies within each industry.
Growth forecasts are based upon historical rates as per data gathered between 2011 – 2015.
Airlines
Data is based upon transactions via internet booking engines from established and low-cost
airlines in the region.
This does not include bookings made through third party sites such as Expedia.
Other revenue streams for airlines are not included in this data.
Travel & Tourism
Data is taken from online travel agents in the region across hotel and airline segments.
Ecommerce
This section includes any merchants that sell physical products online such as electronics,
clothes and white goods.
This definition differs from a more expansive definition of ecommerce that includes
non-physical products sold online as we wanted to cover those in greater detail. You can
find this information in Marketplace Services, Travel & Tourism, and Airlines.
Marketplace Services
This section includes the remainder of the other online ecommerce sections including
classifieds, listings, services and other non-physical products.
114
METHODOLOGY
Due to the ambiguous and broad nature of this sector we did not calculate the size of the
market.
Demographics
The data in this section is based upon a survey of four thousand online buyers across UAE,
KSA, Egypt, Jordan, Lebanon and Kuwait conducted through YouGov.
Transaction and Volume/Size
The data in these sections are not representative of the entire market but are instead a
cross-section of 10+ merchants in each sector.
The data is intended to demonstrate the seasonality in each sector, however, due to
confidentiality we cannot reveal true transaction figures.
The figures charted on the graphs represent divergence from the 12 month average. So
if transaction volume figure in September is 3,000 that means there were 3,000 more
transactions than the 12 month average.
All data is inclusive of online credit card transactions only. Cash-on-Delivery
transactions are not taken into consideration.
Ratios
Acceptance, Chargeback and Refund ratios are based upon surveys of businesses in the
region. This includes firms that use Payfort and competitor payment solutions.
What is an acceptance ratio? This ratio simply tells us how many customers can successfully use
their credit card on a website. This is based upon the number of credit card transaction
attempts and the number of those transactions that are approved.
What is a chargeback ratio? A chargeback is when a customer says that they did not authorize
a transaction and request it to be refunded. In short this ratio indicates the percentage of
transactions that are reported as fraudulent.
What is a refund ratio? A refund occurs when the merchant and the customer agree to refund
the purchase for one reason or another. Unlike chargebacks this transaction does not involve
the issuing bank.
Industry Surveys
Survey results are based upon 100+ responses to a custom survey created by Payfort.
Respondents include SMEs (small and medium enterprises) and enterprise level firms.
Currency
All figures are in USD.
115

stateofpayments.com

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