JEDDAH, 7 June 2005 — Islamic countries continue to face challenges in integrating technology into their economy, according to experts at the third Islamic economic conference held last week in Makkah. These challenges are manifested in their poor infrastructure which is preventing these countries from entering into e-commerce.
Dr. Abid Al-Abdali presented a research paper detailing the reality and challenges facing Islamic countries and how far behind they are in information technology compared with other countries. “The degree of the IT problem differs from one country to another. Some don’t even have a technology base or educational support in addition to lack of adequate investment. Others have a deficiency in their legal, financial and administrative structure connected with the IT sector,” said Al-Abdali.
He said that among the reasons for these problems is the low technology culture and awareness among society members, which plays an important role in the spread and development of e-commerce. He referred to studies that point to the obvious relationship between computer availability and Internet usage. Most Islamic countries have limited computer access for students throughout their education.
Another reason for the inadequate IT in Islamic countries is the insufficient human resources, according to Al-Abdali. The challenge that most commercial establishments face in the Islamic countries is their inability to transform themselves from conducting their transactions from the traditional way to electronic.
“They also don’t realize the importance of e-commerce. Among the obstacles they would face is the lack of experience in e-commerce and technical support they need to transform their business into an electronic business. In addition, e-commerce is still limited in the region whether between the companies themselves and between them and their local suppliers and consumers,” he said.
However, a recent Visa International report indicated that electronic consumer spending in the Middle East has increased during the first quarter of this year. Internet sales in the GCC member countries reached $20 million, an increase of 600 percent compared with this period last year, according to the report published by Al-Hayat newspaper.
The UAE is the leader in e-commerce in the Middle East but transactions in Saudi Arabia, Kuwait, Qatar and Bahrain have multiplied 15 times. The reason for this increase is that governments in the region have taken up the initiative of e-commerce in the past few years and many Gulf countries are relying on ATMs for their transactions.
Many companies are taking notice of this new trend. Dubai based Madar Research predicts that Internet connections will increase from 17 million to 52 million in the Arab world over the next three years. This will put the Net ahead of satellite TV in terms of growth, and offers huge potential for the advertising and marketing goods and services. Among the industries already focusing on Internet advertising in the region is the automotive. According to a preliminary study conducted by Impact Proximity iMedia, Middle East Automotive online ad spending actually exceeded the $1 million mark in 2004, an increase of 100 percent over 2003. Another sector seeing a growth in sales due to the Internet is publishing. Book sales regionally and internationally have increased dramatically in the past year, and the largest growth has been in online book sales, according to Bharat Jashanmal, managing director of online retail site Hadaiya.com.
The Internet is far from being the unreliable, young, black sheep of the regional media scene. It is perhaps the most reliable and cost-effective way to reach a target audience and market a product, according to Martin Diessner, CEO Flip Media. Marketers first have to convince the companies of the profitability of advertising on the Net. In the Middle East, “The market isn’t sold on the idea of going online and for good reason: there hasn’t been any information to convince them that setting aside a chunk of the marketing budget for online media is actually a wise decision. So far, the young industry is relatively unexplored in terms of innovative and inventive online marketing. But, like any young evolving entity, it has grown fast and the preconceptions that existed two years ago are no longer valid or true,” he said.
