This article looks at the network of logistics that is driving the Middle East’s exponential eCommerce growth
The Middle East is the world leader in logistics development, it boasts some of the most urbanized countries in the world with the UAE, Kuwait and Qatar, all featuring in the world’s 30 most urban countries. Most online shoppers, and indeed most of the region’s population reside in Urban areas. Some things to consider when delivering goods across borders into the Middle East:
- The urban areas of Middle Eastern countries are home to some of the most advanced infrastructure and logistics in the world.
- Governments now see eCommerce as a huge opportunity for the economy and are investing heavily in the development of further infrastructure to cater to more rural areas. Although the larger percentage of the population enjoys access to world class logistics infrastructure, this will improve delivery to the smaller percentage of the population that lives outside the cities.
- Saudi Arabia has developed and installed a nation-wide delivery system that is geo-code based and state of the art.
- The Gulf Cooperation Council is taking steps towards duty and tax harmonisation across the member states. Currently, there is no VAT payable on eCommerce imports, but this is likely to change in the coming years, with proposals for a 5% VAT rate being considered. Additionally, duty thresholds vary from country to country. For example, in UAE there is a 1000 AED threshold, while there is none in Saudi Arabia.
- Many regions see a trend in the “click-and-collect” delivery option, where online shoppers purchase online and pick up the goods in-store or at a convenient pick-up point.
If you’re interested in reading more about the Middle East Cross Border eCommerce Opportunity, you can read our white paper here.