Ecommerce will never work, but we'll be fine without it 

Yousef
Author: Yousef | Published: May 20, 2009 at 05:34 AM

Yousef Tuqan Tuqan responds to comments that ecommerce is the main barrier to regional digital marketing spend.

I've written a lengthy response to an article in AdNation titled "digital is doomed without ecommerce...

You can read the full article here but my response is detailed below.

Ecommerce will never work, but we'll be fine without it
 

“Right, a few thoughts from my hotel room in Riyadh, since I have little else to do tonight:

1) ECOMMERCE Ecommerce will never work in this region, and people's fear of credit cards is the least of our worries. The main obstacles to growth are fulfillment and our shopping culture. 

2)FULFILLMENT: My agency has developed numerous ecommerce portals, but the biggest hurdle to sales has been the shipping infrastructure. Shipping to PO Boxes via normal postage is slow and unreliable, and shipping via traditional couriers (a la Aramex) is too expensive to be viable when ordering a pair of slippers, a t-shirt or a DVD box set.

3) SHOPPING CULTURE The UAE has 10x the amount of mall space per resident as the USA - we like to go shopping, and get a Starbucks, and see a movie - we do not need to sacrifice that for the convenience of shopping online.

Ecommerce is alive and well in the ME, but it's not with purchases in the ME. The only real volume of ecommerce transactions is purchasing intangible items (like plane and concert tickets), and shopping overseas for items that are unavailable here (books, DVD's) or for cost savings (cameras, etc.) - the increible success of Aramex's Shop&Ship service is testament to this.

ECOMMERCE IS NOT THE ONLY REASON TO GO ONLINE I fundamentally disagree with Azhar's opinion that ecommerce is the sole driver of justifying digital spend.

While we might not be able to directly link every banner ad to the sale of a chocolate bar or SUV, we can certainly do a lot more to measure, track and report these online campaigns than any Pan-Arab TV campaign can (and with far less wastage).

Oh, and while we're on the subject of Pan-Arab TV, it's important to note that a key market like Saudi Arabia now has 2 times as many homes with broadband internet access as Pay TV, but I highly doubt that many regional advertisers (especially FMCG) have woken up to this reality.

The onus is on us as an industry to educate and inform regional marketers of what the web can realy deliver. None of us plan to get rich on 3% commisions on a regional digital market of $30 million in media spend, but this number will grow exponentially with time. However, banner ads are not the answer to every problem, and the old business model of being "Mr. 3%" is under threat.

Social media, search-engine marketing and consumer engagement through communities and one-to-one communications are proving to be far more than just the Buzzwords for 2009, and we all need to accept this reality.

Regional advertisers (and their traditional agencies) are now being dragged kicking and screaming into the digital age, and those that are ready to embrace these new channels and recgonize that this is not Rocket Science, but a new and more effective way to engage their consumers will be the beneficiaries of change, and not its victims..”

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Comments

  1. Ziyaad September 26, 2011 at 02:48 pm

    You have a point here in the culture of this country towards shopping. Though we can't expect a visit to the mall can be replaced by shopping online. Within that huge sea of mall-goers, you have all sorts of user profiles, such as income levels, product awareness levels, smart shoppers, dumb shoppers and so on. If online can provide a significant discount, then why can't it work hand in hand with the malls. Let them go to the malls and learn about the latest products, though we all know that customer service and product knowledge is pretty transient here. Trends in North America is to snap a pic of that model number and go do some more research online (mobile or pc) and then find a better price. The culture can change if the price is right!


  2. Rahid May 22, 2009 at 04:32 am

    Ecommerce will never work? I do not totally agree with that. Sorry Tuqan.

    It is already working. You yourself said that it works for flight tickets and events. Understanding the expat community that lives in this region, flight tickets are doing real damn good. Air Arabia and Al Jazeera are examples. Did you ever think of ecommerce for money remittance for Expats? Just think back, how many times you might have ordered for a pizza or your favorite burger on phone. People still do not pay over the phone as in the US, but it is delivered at your doorstep and payment is done on delivery. Via phone, we do not even see it, but we buy it; think of a scene where you can see it and buy it. Ofcourse it is better and you have more choices, but payment,, no way, we are scared, so let us pay on delivery. No aramex involved in this game :) Promote it, it will work here. Last time while at Carrefour Doha, I saw that they were collecting email ids and once I gave them mine, newsletters started coming in, a real good move. They didnt stop spending on print ads I believe.


    Digital viral marketing will work in this region. There is a lack in technology in most interactive agencies (didn't mean to say Flip :) ) in the Gulf. There is nothing much intresting for a layman in most of the sites that do marketing and catch people on it. We need to start building more interactive websites. Most web companies are either trying to make the website look great or just the functionalities of the website or an easy CMS or just an interactive website. No body tries to make it all in one.


    I believe you guys would make it happen. All the best.

 
 
 

Flip. We come in Peace!

 

Flip's CEO quoted in The National