Holy month of Ramadan to drive $6.2 billion e-commerce feast in MENA

04 April 2022 Consultancy-me.com 4 min. read
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The holy month of Ramadan began this weekend, a period of togetherness and joy for Muslims all over the world. For retailers in the Middle East, the month is also one of the brightest spots on their e-commerce calendar – with a $6 billion plus online sales extravaganza set to unfold during the coming weeks.

In the 2022 edition of its annual ‘Ramadan E-Commerce’ report, researchers from RedSeer Consulting explore the size of the e-retail event in the Middle East and North Africa (MENA), and some of the key trends expected to dominate the scene this year round.

Ramadan E-tail GMV yearly evolution

According to the experts, Ramadan is set to break all online records in 2022, with total sales to jump by 40% vis a vis 2021 to $6.2 billion, in what would account for around 16% of total e-commerce market activity this year (in comparison: Black Friday accounts for around 34%).

Why do consumers spend so much more?

Asked what motivates their heightened purchasing appetite during Ramadan, consumers mostly point at grocery for cooking and get-togethers (with desserts notably high on the list of purchasing decision-drivers, fashion and beauty & personal care in order to make a dress and groom well for occasions, and home decoration as people welcome family and friends in their homes.

Ramadan and Black Friday dominate e-commerce

“Ramadan is a time for coming together. Hence, group-buying assumes much more prominence than individual purchases,” said Akshay Jayaprakasan, an Engagement Manager at RedSeer Consulting.

Jayaprakasan added that following two years of a “more detached Ramadan experience due to Covid-19”, excitement and hence spending are up significantly on the year previous. “One of the most prominent themes to emerge this Ramadan is the overwhelming sense of the need for connecting with family, and belonging to a community.”

Why do people buy during Ramadan

Grocery and fashion to see forecasted to see the most significant rise with 87% and 70% of consumers planning increased spending respectively. As a result, grocery will see its contribution to the e-commerce mix increase from 11% to 14%, while fashion will see its share grow beyond a third of the e-tail market.

In the home and electronics sectors, 62% and 58% of consumers express intent to increase their spending.

Consumer Intent to Buy

The digital experience

One of the trends expected to continue its growth in 2022 is the growing importance of the digital channel. In 2022, RedSeer Consulting expects time spent on digital channels to increase by nearly 12%. This would mean that, compared to last year, consumers would on average spend an additional 35 minutes per day on channels such as social media (Facebook, Twitter) and shortform content (TikTok, Instagram Reels).

Much of the time spent online is to “discover” new brands and products, and therefore down the line, can correlate to consumer spending behaviour, said Jayaprakasan. Beyond product discovery, consumers use digital channels for entertainment, socialising, and actual purchasing.

For retailers and pure-play e-commerce players, the researchers highlight the growing importance of shortform content. “Consumers want to be informed about products by relatable people in a light-hearted and entertaining manner, which is exactly what shortform does,” explained Jayaprakasan.

Digital time spent

Another key trend is the growing preference towards creators of products/services (and their close brand advocates) versus well-known celebrities. Across all product categories assessed, RedSeer Consulting found a 33% preference gap between the two in favour of creators.

Jayaprakasan: “This reflects consumers’ needs of being able to connect with individuals marketing the product, identify them as trustworthy, and confirm that their interests are similar.”

The Holy month of Ramadan began in Saudi Arabia, the United Arab Emirates, and several other countries on Saturday, when the crescent moon of Ramadan was witnessed at multiple locations throughout the region. Most countries outside of the region align themselves with timelines of the Saudi Arabian moon sighting.