In the GCC region, the luxury industry is slowly catching up with the global trends, with ecommerce at the center. However, luxury e-commerce in the region still represents only 2.5% of the overall e-commerce sales.
Mobile transactions accounted for a 37% value share of total Internet retailing in 2016, and recorded impressive growth. Players within e-commerce have realized that more traffic on their websites is coming from mobile phones, and this has led many players to launch a mobile app.
Another noticeable trend is that cash-on-delivery remained the dominant payment method for purchases made online. The underlying reason for the greater prevalence of cash on delivery is that consumers avoid sharing credit/debit card information online.
However, according to a report by Publicis Media Audience & Insight, there are a few key truths to take into consideration by the luxury e-commerce players in the region.
#1 New set of consumers in the region
The UAE has the highest proportion of online buyers with just over 75% of its overall population, while the KSA represents the highest potential in absolute number in the region.
Also, the fact that GCC consumers are tech savvy and digitally-connected, and are heavy spenders driven by the desire to indulge and define their place in society, they have created a new way of purchasing where they combine webrooming and showrooming, Publicis Media Audience & Insight report notes.
#2 Localisation is key
The biggest percentage of the overall social conversation in KSA and UAE for the past year is in Arabic.
Many luxury brands are moving to localized websites with local social pages playing a vital role in their social communities.
There are many localization examples from the region when brands launched dedicated marketing campaigns, Publicis Media Audience & Insight adds.
#3 Top influential sources
Buyers of luxury fashion items are influenced by a different set of touchpoints where digital became predominant.
While traditional media triggers interests/searches, friends/family and digital sources is the consumer’s first source of information, notes Publicis Media Audience & Insight.
Social media is becoming the new exclusive, with local women interacting a lot with brands online, and their favorite platform to do so in Instagram.