Group-buying is acting as a catalyst for e-commerce in the Middle East, according to new research from GoNabit, a daily deal group-buying website, and YouGovSiraj, a research consultancy.
According to the survey, which polled a random sample of 2,196 GoNabit users, two-thirds of polled consumers (66 per cent) said they would buy more often if it is cheaper to buy online, and more than half (56 per cent) said they would buy more often if it were more convenient to buy online.
“This shows there is great potential for online stores that can disrupt offline retailers through the cost efficiencies of e-commerce. Online retailers that can provide a mix of value and convenience will see a very receptive market,” said Sohrab Jahanbani, COO and Co-Founder of GoNabit.
Exclusivity, ease of online transacting and a wider product range are secondary motivators for why people would choose to buy online more often, the online group-buying portal said in a statement.
Additionally, over one-fifth (21 per cent) of respondents said they had made their first online purchase within the last month, underlining the role of group-buying in the development of regional e-commerce.
The results of the survey, which captured e-shopper sentiment among users primarily from the UAE but also from Lebanon, Jordan, Kuwait and Egypt, were released during the ArabNet 2011 Forum currently taking place in Beirut, Lebanon.
The findings signal a positive outlook for entrepreneurship in e-commerce with consumers’ propensity to spend online improving significantly. Respondents are overwhelmingly positive towards e-commerce (93 per cent positive), despite the known and perceived problems in this region of security, availability and delivery. This suggests the market will continue to grow as these barriers are knocked down.
Reinforcing the power of social networking as a tool for online shopping – and a testament to the group-buying business model – almost half (47 per cent) of respondents have used social networking sites to share a deal online. This rises to 3 in 5 (60 per cent) among the 18-24 age group. Over a quarter (26 per cent) has actually made a purchase after seeing something shared through social networking sites. Again this is higher – just under a third (32 per cent) – among 18-24 year olds.
Research is also an important factor in online purchasing behaviour. The vast majority of people surveyed conduct research before buying a product online (94 per cent). The most popular sources for this information are review websites (73 per cent), which are used more than friends and family ‘in the know’ (64 per cent). Deal websites (54 per cent) and consumer forum websites (49 per cent) are also important research tools, in addition to manufacturers’ websites which are used by 56 per cent of males.
Word-of-mouth also remains a powerful influencer of online purchases with 77 per cent having bought online after a recommendation from a friend. Meanwhile, 89 per cent of respondents have recommended an online deal to friends and family through word of mouth.
There is also considerable purchasing power among online shoppers. The sample was skewed towards higher incomes (38 per cent with monthly salary of $5,333 or more). Just over half (53 per cent) have spent more than $500 on a purchase, while 3 in 5 (60 per cent) would be prepared to do so in the future. Over half (52 per cent) of those on the highest incomes have spent more than $1,000 online and 57 per cent are prepared to spend that amount in the future.
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