The Middle East’s eCommerce market is set to grow exponentially within the next couple of years. According to PayFort, the Middle East eCommerce market would grow to US$69 billion by 2020, almost doubling in size in just a few years. Almost 90% of online goods bought in the Middle East are still shipped from outside, but this is changing rapidly. Accordingly there is huge potential for the eCommerce market to expand in the Middle East. So, if you’re thinking of getting into this business, this article explains what is eCommerce, what you need to know before you start, let’s explore the eCommerce topic.
What is eCommerce?
We can call it an “online store” or “eCommerce website”, either or it is a platform to purchase and sell products and services via the internet in an electronic environment. Through eCommerce, it is possible to sell or buy almost any product or service. eCommerce transactions are usually done through online shopping websites or mobile applications. Nowadays, mobile eCommerce is on the rise and it’s ratio is increasing.
Why eCommerce is a good idea?
The use of the internet and the number of mobile internet subscribers among Middle East’s young population is continuously growing. eCommerce offers great opportunities for both manufacturers and retailers. Perhaps you have enough trade experience but you were always selling to local customers and you feel like it’s time to grow your customer base, or maybe you didn’t try buying and selling before but you want to start your new business on the internet. E commerce might just be the business model that suits you!
There is still room for new ventures in eCommerce, as it is reshaping the business world. If you manage to deliver the right products to the right customers – which is easier to do on the Internet than in the real world – you can have a virtual store that saves you money 24/7.
Just as it is easier and more practical for consumers to shop online, running an online store is easier and cheaper than a physical store. Of course, you can think of your online store as an element that supports your physical store, increases your brand awareness and introduces you to new customers. So even if you have a physical store an eCommerce website is a very logical business tactic.
What are the eCommerce business models?
There are three different business models in B2C, B2B and C2C.
Business to Consumer (B2C)
Companies adopting the business model B2C (business to customer) sell their products or services directly to the consumer. Clothing, books, tickets, market products and so on. Most of the websites we buy from work with this business model. The consumer enters the website, goes through the product catalog, usually sees the photos and details of the product, selects and orders the products he wants.
Business to Business (B2B)
In the B2B (business to business) model, companies sell to companies. The buyer is either big enough to buy or sell products wholesale or to buy wholesale because of their needs. A famous example of working with the B2B model is alibaba.com.
Consumer to consumer (C2C)
Nonprofessional consumers; may want to sell second-hand phones, houses, cars or other products they do not use. Websites that work with the C2C model serve as intermediaries for consumers to sell to consumers. Generally, they receive a commission, processing fee or advertisement fee from these sales. A famous example in the region is The Luxury Closet .
What can you sell online?
As long as it is permitted by the law, anything can be sold on the internet. Almost anything you can think of from electronics to textiles, jewelry, furniture, office supplies, cosmetics, books and hobby related products can find buyers on the internet. However, you may find it difficult to compete if you try to sell widely available products without any differences or advantages. You need to sell products that meet people’s needs, make their lives easier, solve a problem they have, or entertain them.
It is also important that you sell products that can be delivered to the customer intact and undamaged. You will probably ship your products by cargo. If you intend to sell products such as food or beverage that will deteriorate within a short period of time, you should take into consideration situations where it may take 4-5 days for the cargo to reach some cities.
What are the requirements to set up an eCommerce website?
Now that we’ve touched on what is eCommerce, it’s time to talk about what you’ll need to embark on eCommerce. The list is as follows:
Software / infrastructure
One of the most important decisions you will make when setting up your eCommerce website will be the eCommerce infrastructure or software you choose. It is not impossible to change your eCommerce infrastructure later, but as your website grows, it becomes difficult to make such a change. Therefore, you should opt for an infrastructure / software that will suit your current needs and when your business grows to suit your future needs. Here are three types of solutions:
1. SaaS eCommerce packages
This is a highly preferred “turnkey solution”. You choose a company that offers eCommerce packages, and you subscribe to the company’s most suited package for a certain period of time (usually annually). These packages often include payment methods such as hosting, SSL, ready-made design templates, virtual POS. Higher-priced packages may include features such as mobile applications, mobile payment methods, gift voucher system, discounted shipping, marketplace integrations.
If you prefer such software, after being trained on how to use it, you can choose one of the ready-made designs and add your products and manage your website yourself. If necessary, you can also get support through the phone. So, you won’t need excessive technical knowledge.
On the other hand, you can’t access the code of this software and make the edits you want. You are limited to the features you pay for, and your service is terminated if you do not pay.
2. Open source software
This solution includes open source software, such as PrestaShop, WooCommerce, OpenCart, Magento. The core of this software is completely free. Plugins and themes that offer additional features are sold for a fee. However, in order to establish your own eCommerce website with these software, you need to be experienced in web design, site management, virtual POS integration or hire an expert.
Because they are open source, they offer more customization. However, if you are not a technical expert, it may be difficult for you to install and customize these software by yourself and make it legal.
Or if you are looking for a robust and a solution that gives you more freedom but don’t want to learn code, GoDaddy has you covered with WordPress websites and Quick Start With the wizard that makes installation easier.
3. Custom software development
If you think that the software does not meet your needs, you can customize the entire infrastructure from scratch, and you can negotiate with a professional web designer. However, remember that such a project will take longer and will be costly.
The domain is the address of your website, www.example.com. Domain names are not sold permanently, but are rented on an annual basis. If you neglect the annual payment, someone else can get your domain name.
There are many domain extensions that you can use, but it is a good idea to choose a common one, like a .com or a .net extension. You can check if the domain you want is available from GoDaddy’s domain search tool.
If you are going to get a ready-made eCommerce software, your package may include hosting services. If not, you will need to choose a hosting plan that fits the needs of your software. GoDaddy’s Business Hosting plans can be the ideal option for you.
Credit cards are almost an indispensable method of online shopping. You need to have a virtual POS to receive payments by credit cards. As the ready-made eCommerce softwares are contracted with banks, they can give you virtual POS support without any effort. If you are setting up your own software, you can get in touch with your bank and get a virtual POS or work with a payment service provider like PayFort .
Alternatively, you can offer wire transfer / EFT, door-to-door payment, mobile payment and electronic money payment option.
What are the advantages of eCommerce for the seller?
1. Lower costs
The most important advantage of eCommerce compared to physical stores is of course the lower costs. Store rent, shop design, signs, product stocking and so on. cost items are eliminated from the beginning. You may not need to employ elements until you have a sufficient size. Moreover, digital marketing and advertising costs are lower than traditional ads.
2. Possibility to reach large audience
In a physical store, you can only sell to people who come to your store. People who are interested in your products may not have the opportunity or time to come to your store and may not even know about your store. However, you can easily make sales to the whole region and even the whole world through eCommerce. And through digital marketing, you can easily market your brand to people you can never reach physically.
3. More detailed product overview
You may not be able to tell your customers about all the products in your physical store with all the details. You may not be able to take each product out of the box. However, on your eCommerce website, you will have the opportunity to present all the information of the product and to add as many photos and videos as you want. So, your customers will be able to get to know the product better before ordering.
4. Scalability and growth
Growing your physical store or opening a new branch is a difficult, costly and risky move. However, as your customer base grows, you can easily grow your eCommerce business. You can increase or decrease your product inventory on demand, and you can instantly adjust the budget you allocate to Google or Instagram ads.
What are the advantages of eCommerce for the customer?
1. More practical
Since online stores are open 24/7, the customer can shop at any time. Some customers don’t like crowded stores, sales people who constantly trying to influence your purchases. Virtual shops are also ideal for these types of customers.
2. Product range and comparison
The customer can easily find all brands, models and types of a product he / she is looking for and compare its features and prices. This makes the shopping experience effortless and straightforward as the customer can easily choose the most suitable product.
3. More economical
This is also reflected in product prices because the operational cost of running an eCommerce website is low. You can find the same product often cheaper in the eCommerce website than in a physical store.
How much does it cost to set up an eCommerce website?
When setting up your eCommerce site, you will have items that will be costly. Some of them are a one time charge, while others are regular costs. Of course, the amount of each cost item may vary depending on the nature of your business and your website.
You must invoice and pay taxes for the products you sell. So, you must have a registered company.
If you do not already have a company, you must first set up a company one. If you already have a physical store and plan to move your business to the internet, you don’t need to start a new company. You need to contact a financial a (accountant) to help you set it up. Your financial adviser will guide you when selecting the appropriate company type (individual company or limited liability company) for your business. The cost of installation depends on the type of the company and your financial adviser. Of course, you should pay a monthly fee for the accounting service you will get from your financial adviser.
In addition, if you are the owner of the company, you will pay an insurance amount every month. Your financial adviser can inform you of any other costs associated with operating the company.
You can opt for pre-built (SaaS) eCommerce infrastructure packages or solutions like WordPress and WooCommerce for a more advanced solution. The cost here varies depending on how comprehensive is the website you want.
Website design and installation
If you chose to set up your own website instead of using a ready-made eCommerce package, you will probably agree with an agency or a freelancer to do the job on your behalf. The company or person you will sign the contract with will issue a one-time design / installation budget to you based on your wishes. You will also need to make additional payments for extra features, changes, and updates that you will request after your website is set.
If you have selected one of the ready-made eCommerce infrastructures, there will be free design templates available on your website. With WordPress Websites you can choose from the starter themes that we have chosen for you and install them right away. Also remember that WordPress offers countless paid and free theme options.
Take a look at this article: All about WordPress Themes
The bank or payment service provider from which you receive Virtual POS service will receive a certain commission from each sale you make. This commission rate may increase in installment sales. Depending on the bank, you may have to pay a fixed monthly fee for the virtual POS.
The price of the domain varies depending on the domain extension and registrar you choose. For more information, you can visit GoDaddy’s Domain name checker and check if the domain you want is available.
If you choose a ready eCommerce package, the hosting service may also be included in the package. If you are going to get the hosting service yourself, make sure to work with a reliable company. Shared, cheap hosting packages for personal sites may not be suitable for eCommerce. GoDaddy’s ideal hosting plan for eCommerce sites can be found here.
An SSL certificate that ensures data security while communication is a must for eCommerce websites. An SSL certificate may also be included in your ready eCommerce package or hosting package, or you may need to purchase and install it yourself.
You can reduce the cost of shipping by negotiating with a shipping company to send your products. It is beneficial to get better prices by contacting branches of the cargo companies close to you.
The time you spend creating your website is also considered as a cost. You will find yourself diving into details related to the establishment of the company, you will probably be trained to use the eCommerce package, if you have a special design, you will spend time with the designer to edit the final touches and finally you will add photos and information to all the products you will sell. You can assume that it will take about a month to put together the eCommerce site you have dreamed of.
How can you promote your eCommerce store?
It is not realistic to wait for orders to flow as soon as you open your online store. In order to reach new customers, you must carry out promotional and marketing activities.
- Use social media. Open Instagram, Facebook and Twitter accounts for your eCommerce website or brand. Share new posts on your accounts regularly (at least every few days).
- Advertise on search engines. You can advertise on search engines, especially Google. This increases the likelihood of people looking for a product you sell in the search engine to come across your website. In the ads you place on the search engines, you usually pay per click (that is, when a potential customer clicks your ad and enters your website). The cost of a click can range from a few cents to a few dirhams. You can set your daily budget yourself.
- Advertise on social media. Similarly, you can advertise on social networks like Instagram, Facebook and Twitter. Make sure you allocate more budget to the networks your target audience uses the most.
- Organize campaigns. From time to time make discounts and offers to attract customers, distribute promotional codes, and organize promotional campaigns for special days.
- Submit newsletter. You can send newsletters to your subscribers by email (with prior permission). Include new products and campaigns in your newsletters.
- Spread the address (URL) of your website. Add the address of your website to your email signature and all marketing materials (business cards, brochures, catalogs, bags, etc.).
- Organize competitions. Contests on social media will attract traffic to your website and increase the number of followers on social networks.
- Give me a discount code. Give customers who shop at your store a discount code that applies to their next purchase. Even if the discount rate is symbolic, you encourage the customer to return to your website and shop more.
- Distribute promotional items. For example, you can add a bookmark or magnet with each order. Your promotional product should have the address of your website.
- Do search engine optimization (SEO). Make sure you’re using the right keywords when writing product names and descriptions. The right SEO techniques will allow you to rank higher in search engines. If you have a budget, you can work with an SEO expert.
In this article, we’ve explained what is eCommerce, how to set up an eCommerce website and what are the costs. Beyond setting up an eCommerce website, you can check the following article that explains 4 vital elements to include to have a successful eCommerce website.