Cross-border e-commerce market analysis: different e-commerce development trends from the Middle East to the United States
The development status of e-commerce in the Middle East market
The per capita disposable income in the Middle East is high, but e-commerce accounts for a low proportion of social retail, showing huge growth potential. The Middle East mainly includes the United Arab Emirates, Saudi Arabia, Egypt, Kuwait, Qatar, Bahrain and Oman, with a total population of approximately 150 million. The Internet penetration rate in the region is extremely high, such as the UAE reaching 100% and Saudi Arabia 92%. E-commerce transaction volume reached US$22 billion in 2020, of which the UAE and Saudi Arabia contributed 55%. It is estimated that by 2025, the Middle East e-commerce market will reach US$50 billion, with a growth rate of 110%.
The Middle East market relies on imports, especially light industrial products, and has strong demand for daily consumer goods. China has become the largest trading partner of the UAE and Saudi Arabia. For example, in 2020, the UAE’s imports from China reached US$32.31 billion, and Saudi Arabia’s imports from China were US$23.92 billion. This shows that Middle Eastern consumers have a high degree of acceptance of “Made in China” products.
The development status of the U.S. e-commerce market
The United States is one of the earliest countries in the world to develop e-commerce, and its market size is huge, reaching US$452.8 billion in 2017. The e-commerce market in the United States is divided into three categories: comprehensive e-commerce platforms (such as Amazon, eBay), offline retailer e-commerce (such as Walmart), and brand vertical e-commerce (such as GAP, Forever21, H&M, etc.). The U.S. e-commerce market is developing rapidly, but compared with China, there is still a certain gap in the number and scale of U.S. e-commerce companies. Amazon achieved three consecutive quarters of skyrocketing profits in 2016, demonstrating the growth potential of the U.S. e-commerce market.
Saudi Arabia’s e-commerce market advantages
The advantages of Saudi Arabia’s e-commerce market lie in its young population structure, large market capacity, and high unit price per customer. According to statistics, the total capacity of Saudi Arabia’s e-commerce market in 2018 was US$6.36 billion and is expected to reach US$10 billion in 2023. The population in Saudi Arabia under the age of 35 accounts for more than 80% of the country’s total population, and the main consumers are younger.
Challenges facing the Mexican e-commerce market
The Mexican e-commerce market has huge potential, but its development has been restricted due to the imperfect e-commerce development environment and strict customs clearance policies. Online shopping in Mexico accounts for only 4% of annual retail sales, and more than 90% of people prefer to use cash transactions. In addition, Mexico’s customs clearance policy is relatively strict, and imported goods are subject to an average tariff of 2% to 5%.
Through the analysis of the e-commerce markets in the Middle East, the United States, Saudi Arabia and Mexico, it can be seen that the e-commerce markets in different regions have their own characteristics and development trends. Cross-border e-commerce sellers should choose appropriate markets for business expansion based on their own circumstances.