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Doha: Qatar’s e-commerce market is expected to reach $2.3bn in 2021, according to a recent study conducted by the Qatar Chamber (QC).
The report “E-Commerce in the State of Qatar: Reality, Challenges and Solutions” also said that the value of e-commerce in Qatar has already exceeded $2.2bn in 2020, showing an increase of 47 percent compared to $1.5bn recorded in 2019.
The QC report showed that the e-commerce market in Qatar was distributed almost equally between business-to-business and business-to-consumer transactions. Local companies accounted for about 38 percent of the total value of the transactions, while the share of foreign companies accounted for 62 percent.
Qatar is the seventh largest online market in the Middle East and North Africa. The Ministry of Transport and Communications (MoTC) expects the market size to reach QR12bn by 2022, while the value of e-commerce transactions is expected to jump by 150 percent over the next three years.
The report added that global e-commerce market is valued at over $2 trillion, and Qatar leads the Middle Eastern countries in terms of the average value of a single transaction, at $264 per transaction.
Qatari e-commerce companies also increased during 2020. The report said there were 350 e-commerce companies operating in the country in June 2020, and 66 new e-commerce companies were opened in the next six months with a total of 416 companies by the end of December 2020.
The most important e-commerce activities included food products and food delivery, groceries, clothes, gifts, electronics, and products related to beauty and fashion equipment, health in addition to technical games and sports, travel, digital books, hotel reservations, household items, and spare parts of cars.
The report also elaborated on the challenges facing e-commerce in Qatar, which include weak coordination between the relevant authorities to set a clear system and policy for e-commerce to facilitate the registration and establishment of small and medium-sized companies for local and international investors.
Other challenges also include the consumers’ low awareness of the options available in e-commerce, weak spread of e-commerce among large numbers of temporary low-wage workers, complex e-payment rules and systems and high-cost collection process for SMEs.
The report added that most payments in Qatar are made by cash on delivery, which represents 75 percent of the total e-commerce payments. It also highlighted the limited number of e-payment methods such as credit cards, which represent 19 percent of the transactions, PayPal with 6 percent, and others.
QC also reiterated in the report that e-commerce witnessed a strong renaissance in Qatar amid the COVID-19 pandemic last year. A study by the Arab Monetary Fund indicated that the pandemic has led to an increase in the use of mobile phones by 50 percent, and an increase in the use of online data by 40 percent, which allowed many companies operating in Qatar to showcase their brands and increased their shares in the local market. The prevalence of e-commerce in Qatar was also estimated at 14 percent.
QC added that Qatar has a suitable environment for the adoption of e-commerce and has a developed internet infrastructure. It said Qatar ranked first in the Gulf and fifth globally in the mobile internet flow speed index, with a rate of 59.90 megabytes. The country also ranked first in the Gulf and 39th globally in fixed broadband internet, according to the “Speed Test” website.
Currently, Qatar ranks seventh in e-commerce among the business-to-consumer sector in terms of the volume of transactions in the Middle East and North Africa. The country’s citizens and residents also enjoy high levels of income, which results in a high rate of per capita spending on luxury products, especially in electronic purchases.
The report also recommended the development of new policies, regulations, systems, and laws that support the practice of e-commerce in Qatar.
It also recommended to activate and encourage e-payments, facilitate the issuance of e-payment tools such as prepaid cards and digital wallets, and study the development of the “E-Payment Law”, which could contribute to regulating the e-commerce market. It also urged to empower merchants by facilitating the registration process of startups and related activities to help SMEs increase their presence on the internet.
