Sheikha Lubna Al-Qasimi, CEO, Tejari gave new insight into the development of e-commerce in the Gulf States at the Arab Telecommunication and Internet Forum, held in Beirut. The event was held simultaneously with the International Telecommunication Union’s (ITU) Annual Regional Meeting for Telecommunication Development in the Arab Region.
The Tejari CEO’s presentation to the forum revealed Gartner Group’s prediction that the global e-commerce market will reach $7 trillion by 2004, of which forecasted growth for the Middle East is thought to be two percent. The presentation also highlighted that 17 percent of organizations within the Gulf Cooperation Council (GCC) states use the Internet for online procurement. The average GCC resident purchases $1068 worth of goods and services online annually, compared to an annual purchase amount of $1314 in the US, $1,072 in the UK, and $875 in Germany.
Addressing the ministers and private sector decision-makers attending the forum, Sheikha Lubna said, “Online procurement is vital to the long-term development of business in the GCC, as overall government expenditure currently reaches up to $100 billion annually, with at least 10 percent being spent procuring goods and services.”
According to figures detailed in her commentary, e-commerce spending in the GCC is anticipated to reach from $7.78 to $10.45 billion by 2005, with Saudi Arabia making up 65 percent and the UAE accounting for 25 percent of that growth.
“In order to promote the development of e-commerce in the Middle East, forward-thinking e-government programs are required, with initiatives such as Tejari and Saudi Aramco’s online procurement strategy serving as proof-of-concept. Governments can support the growth of e-commerce by encouraging more awareness of e-commerce benefits, as well as increased Internet adoption,” she added.
To demonstrate a concrete example of the growing interest in e-business in the Gulf, Lubna revealed that Tejari’s membership has increased from 482 organizations in the first quarter of 2002 to more than 1500 members in Q1 2003. The year-on-year growth in the number of online auctions taking place through the Tejari marketplace jumped from 600 in Q1 2002 to 2179 in Q1 2003.
Sheikha Lubna’s presentation also outlined the challenges facing e-commerce adoption in the region, such as lack of security in online transactions, the need for a regulatory framework governing e-commerce, the deficiency in awareness about the business benefits of online business, and a general fear of disclosing sensitive information online.
Arab News Compunet 1 July 2003