Business executives in the two largest economies in the Gulf Cooperation Council region of the Middle East say they are already purchasing much of their supplies online, and a big majority expect business-to-business ecommerce to become more important in the years ahead.
In the survey commissioned by B2B marketplace operator Tradeling, 47% of business executives in Saudia Arabia and 46% in the United Arab Emirates said their companies primarily purchase online. And 82% of respondents in the survey of 500 executives said they expect businesses will use B2B ecommerce more in the future.
The COVID-19 pandemic has spurred the adoption of digital commerce, says Marius Ciavola, CEO of Tradeling, which is based in the UAE.
“Whatever held back the growth in ecommerce for nearly two decades, especially in the Middle East Region, has disappeared,” Ciavola said in a press release that accompanied Monday’s release of the survey results. “At the height of the pandemic, customers had little choice but to resort to online shopping, and with it the floodgates of business opportunities opened.”
71% of respondents said they use B2B online marketplaces to make at least one-quarter of their purchases, with 40% saying marketplaces account for at least three-fourths of transactions. The results excluded those who responded “don’t know.”
However, payments are often handled offline via cash and check, the survey shows. Two-thirds of respondents said they use such physical payment methods—as opposed to electronic means such as payment cards or online bank transfers—to pay for purchases, including 42% who said they used the traditional payment forms for at least three-quarters of purchases.
The industries where companies are least likely to purchase online are automotive and construction, while they are most likely to make ecommerce purchases in such segments as electronics & computing and fashion & beauty.
The survey of 500 executives, evenly split between the UAE and Saudi Arabia, was conducted for Tradeling in January by PSB Middle East, a consulting firm that is a subsidiary of Asd’a BCW, a public relations firm based in Dubai, capital of the UAE.
AI will impact B2B ecommerce
Other results from the survey show:
- 84% of respondents from the UAE and 73% of those from Saudi Arabia expect ecommerce to become more important in their countries in the years ahead.
- Asked which technologies will significantly change businesses in the next five years, 62% said artificial intelligence and machine learning, making it the No. 1 selection. 56% said AI would significantly change B2B ecommerce. Other technologies expected to have a big impact include cloud and mobile computing, cited by 44%, robotics (44%), virtual currency or money (44%) and robotics (43%).
- 83% of respondents agreed that B2B ecommerce will help small businesses in the region find new customers, and 85% said B2B ecommerce will facilitate the emergence of a more diverse range of small and midsized businesses in the region.
- 52% said business conditions are good now, suggesting executives believe a post-pandemic recovery is underway. Executives in businesses that cater to consumers were especially optimistic, with 69% calling conditions favorable, as compared to 50% for B2B companies.
- 78% of UAE executives said business conditions will be significantly better a year from now, compared with 68% of those from Saudi Arabia.
Tradeling is a B2B marketplace that has been operating since 2020. It is backed financially by the Dubai Airport Freezone, which provides tax benefits and import and export services geared to foreign companies.
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