The Gulf Cooperation Council (GCC) e-commerce market is growing rapidly and is expected to reach $23.7 billion by 2022, according to research commissioned by Gulf Pinnacle Logistics. And where there is significant growth in a particular sector, intense competition always follows.
The findings of the study commissioned by Gulf Pinnacle Logistics and conducted by an independent research firm shows an expected annual growth rate of 7.2%.
Retailing activity done via the internet in developed markets like the US and UK ranges between 10-20% of total retailing, compared to emerging markets like India, Brazil and Russia at 5% and less developed markets like UAE, Indonesia, Saudi Arabia and Egypt at 1-2%.
Even though the Gulf region has a high internet penetration, one of the largest mobile penetrations globally and a relatively high GDP per capita, this hasn’t translated yet into a high internet retail penetration, thus, presenting a significant opportunity for growth, the study reveals.
According to Shailesh Dash, chairman of Gulf Pinnacle Logistics, the e-com supply chain operation is one of the major factors holding back further growth.
“GCC consumers are still looking for higher delivery performance, especially on the time and cost fronts, with late or long delivery time being the most common complaint,” he says. “UAE and KSA consumers both value lower cost when making online purchases, however, UAE consumers value primarily fast delivery while KSA consumers find free or cheap delivery more important.”
Established in 2014, Gulf Pinnacle Logistics (GPL) is a Dubai-based logistics and transportation company, which owns majority stakes in 4 assets involved in warehousing, CFS operations, student bus transportation and courier services.
“We understand the challenges faced by consumers that come along with every delivery. Our subsidiary, Century Express, provides safe, secure, reliable and timely deliveries and has been delivering couriers and packages for the past 12 years,” adds Dash.
“The need of the hour is flexibility, to manage, match and exceed consumers expectations considering the busy and challenging lifestyles we live in. We offer customised solutions with competitive rates and constantly work with large and reputable clients who have consistently placed their faith in our services,” he says.
There is currently a global race on who can deliver shipments faster and more conveniently.
Competition amongst courier companies and last-mile enablers has intensified. Globally, the pace of delivery has evolved from a 3-day window, to 1-day, to same-day to even a few-hours.
Obviously, the shorter delivery time increases the price of services, and the markets will test the price points of few-hour deliveries considering the huge technological and manpower costs behind them, Dash adds.