PayPal MENA 2016

e-commerce in MENA

Objectives of the workshop

Share our views on the key success factors of e/m-commerce

Show the growth of MENA’s ecommerce

Explain what PayPal is and how it works

©2016 PayPal Inc. Confidential and proprietary.

Agenda

©2016 PayPal Inc. Confidential and proprietary. 3

Overview of the 3 key phases

Phase 1: Attract

Phase 2: Convert

Phase 3: Retain

E-commerce in MENA

Presentation of PayPal

Conclusion

The 3 phases of successful e-commerce

What are the 3 phases of a successful e/m-commerce?

5

Convert

Retain

Attract

Marketing /Lead generation

User Experience

Delivery / Customer service

ATTRACT

© 2015 PayPal Inc. All rights reserved. Confidential and proprietary. 7

“If you build it, they will come”

1. USP and Branding

How do you define Innovation? An example in Industrial Goods

9

How do you define Innovation? An example in Entertainment

10

How do you define Innovation? An example in Transportation

11

07425 551111****

© 2015 PayPal Inc. All rights reserved. Confidential and proprietary.

A sample of « next generation » companies

12

2. Research & Marketing


Doing your research

14

Measuring marketing: KPIs

Channel Specific KPIs


Financial KPIs

Traffic and Conversion

KPIs

Traffic KPIs: Visits/Visitors, Bounce rate, Pageviews, CTR, Pageview Per Visit, New Visit Ratio Conversion KPIs: Conversion Rate,

Lead, Orders, Checkout Funnel Ratios

See next page

Cost KPIs: CPC, CPM, CPA, ROI … Revenue KPIs: AOV,

Average Item / Order, CLV, etc.

I go directly to websites I have used in the past. 58%

I go directly to websites I know the web address for. 40%

38%I search for particular brands or products on a search engine.

I go to sites recommended by friends/family.

36%

I follow links from comparison sites.

25%

Search engine

optimisation (SEO)

How merchants drive CBT traffic (%)

21

2631 29 27

22

28

24 23

1

Unique, publically

known brand

Search engine

marketing (SEM)

Marketplace listings

Marketplace advertising

Affiliate marketing

Price / product

comparison listings

Social media

Recommend-ations Other

SEO i s the most popu la r method fo r d r i v ing c ross-border t ra f f i c (3 1%)

3. International Audience

50% of online buyers in the world state thatthey have purchased across borders

LOCAL INTERNATIONAL

They purchase 2x more

Consumer electronicsClothing, footwear & accessories

Entertainment & education

(digital & physical)

Travel & transportation

Toys & hobbies

What do they buy?

49% 32% 31% 26%31%

Where do they buy f rom?

25% 19% 14% 11% 5% 4%

I don’t want to pay shipping costs. 47%

I want to be sure to receive my item. 41%

36%It is not clear how much

duties/customs taxes I will have to pay

I want free returns 35%

They want reassurance on sh ipping & return pol ic ies

1 out of 2 online buyers would purchase more if they were reassured by your check-out page.

1 out of 5 drops purchase if they are forced to create an account.

They want a secure payment method

Bringing pieces together

Localise for them

Simplify their Guest checkout

Website languagePurchase currencyCustomer supportPayment options

Go mobile

Reassure themDelivery options and pricesTotal landed priceProtection in case of non-deliverySecure paymentCustomer support

Learn more about barriers and conversion drivers of international consumers on PayPal PassPort


Reassure your consumers with PayPal Buyer Protection and RefundedReturns service

Paypal.com/fr/passport

Paypal.com/fr/retoursPaypal.com/fr/buyer-protection

4. Social Media


Social Media

30

CONVERT


“Fasten your seatbelts. It's going to be a bumpy [ride]”

1. The User Experience

Analyzing the Conversion Funnel


Prospect base

100% of prospects

10,000 visitors

Product area60%

Shopping cart30%

Final order3%

54 Visitors complete purchase

Source: Prestashop

Customer Journey Map

Research & Planning Product Discovery Ordering Process Product Shipping & Delivery Returns Refunds

Enjoyability Enjoyability Enjoyability

Helpfulness of ecommerce Helpfulness of ecommerce Helpfulness of ecommerce

Enjoyability

Helpfulness of ecommerce

Enjoyability


Enjoyability


STAGES

EXPERIENCE

Customer Empathy

Less is more

Multi-ChannelConsistency

2. The Obstacles in the way of Conversion


Reassure your consumers on their key concerns

1. Does the webstore even deliver to my country?

2. Is it safe to pay on the website? (46%)

3. What if something is wrong? Can I return it? Is the return free? (30%)

4. The prices are in USD, what does it cost in EUR?

Key consumer concern How to lift the barrier

1. Welcome international consumers with geo-localized pop-up

2. Show PayPal logo on your homepage

3. Tell your PayPal customers that their return cost is covered

4. Offer foreign consumers prices in their local currency

3. Payments

Fast Checkout

Pull the trigger

3. Security

Security & Trust

• SSL• PCI DSS

Buyer protect ion

RETAIN


“You can’t handle the truth”

1. The delivery… of a promise

2. The NPS

How is NPS calculated?

50

How likely are you to recommend [Business Name] to a friend or a colleague?

Using the LTR Question

50

% Promoters 9 and 10’s % Detractors 0-6Net Promoter Score

(NPS)

Very LikelyNot at all Likely

8765 9 1043210

Customer-advocates Disappointed or non-delighted, possibly spreading bad word of

mouth

Example: 100 surveysPromoters 80%

Passives 5% Detractors 15%

80%-15% = 65% NPS

What should I consider as Opportunity or Success?

Its a natural desire is to compare ones NPS score to their competitors. A word of caution, most business do not advertise their NPS score. If they do share, they most likely will not share their methodology. It is important to understand their methodology before comparing your business to theirs. It is very easy to bias ones results unintentionally by changing how the question is asked, when it is asked, and how the scale is presented, etc.

Some pitfalls to avoid when asking NPS:

• Don’t offer a N/A option, this will most likely artificially inflate your numbers and you'll mask opportunities

• Consider the customer journey, and survey at the logical point

• Provide an anchor for the scale, nothing more: Not at all Likely for 0 and Very likely for 10. No other instructions on how to score should be given, don’t mark prompters, passives etc.

• Don’t instruct customer how to respond in the invite, survey or personal interactions. i.e. remember a 10 means your happy, or if I get a 10, I receive a bonus, etc.

How your NPS changes over time, will be the most reliable indicator of success. Use the information the customers have given, match it up to any internal metrics you have, find the “sweet spots” in your data that make a loyal customer.


You are your best competition

What does the number mean?

3. Return customers

Important tips to bring back return customers

Merchandising Tools to show the most fitting product first

Great filters/navigation options

Tokenization to save user payment information

A/B testing (Google website optimizer)

Visitor tracking, form dropout

Recommendation engines (3rd party installs)

GeoIP: Don’t make people go through steps if you know where they are!

Remember what people have done before

53

MENA e-commerce data


MENA with $2.9B GDP is larger than India or Russia, but fragmented geographically

and dependent on oil

Rebound in Oil Prices and Economic Diversification expected to

increase growth

3 139 3 182

2 908

3 127

3 376

2 600

2 700

2 800

2 900

3 000

3 100

3 200

3 300

3 400

3 500

2013 2014 2015 2016F 2017F

GDP $ (M)

Fall of Oil Prices

2 908

1 175

2 308

1 2521 903

0

500

1 000

1 500

2 000

2 500

3 000

3 500

MENA RU IN AU BR

GDP Comparison $ (M)

*Source : IMF

1 446411

239

254

GDP $ (B)

GCC

N.Africa

Rest

CIS

31350

7500

16300

0

5000

10000

15000

20000

25000

30000

35000

GCC Rest of MENA MENA Avg

GDP Per Capita $

Lead by UAE, all players rush to diversify their economy with increased focus on technology start-ups and infrastructure investments


108 107

111 110

114

109112

114 115

108 107 108

100

105

110

115

120

UAE Consumer Confidence Index

Facts• Lower oil prices drive need

for diversification• Increase of tourism influx• Innovation &

entrepreneurial drives

98103

101 100103105

97 9790

80

6654

485048606059

4745 4543 41 37 343440

0

20

40

60

80

100

120 Crude Oil

From Fuel Economy to:

E-Commerce and Digitalization • Electronic IDs• Start Up Ecosystem• National Wallets• Salary Cards

• Qatar 2030 vision• UAE Smart Government initiative • Bahrain 2030 Vision • Kazakhstan 2050 vison

Infrastructure• Cable initiatives• Telecom/Mobile• Financial Services • Logistics

Travel and Hospitality• MICE • Economic zones• Airline’s Hub• Entertainment

Reforms • Ministers for

happiness and tolerance in UAE

*Source : Neilsen, Bloomberg, Frost & Sollivan

• Dubai EXPO 2020• Doha World Cup 2022• Unified GCC Visa

• UAE Smart Government Initiative

• Middle East-Europe Terrestrial System (MEETS) (1.400km)

• SEA-ME-WE 5 (20.000km)


Young and intercultural demographicsMENA makes up 6% of World’s Population and equals that of European Union

Dynamic young Population

32,117,8

38,46,7

5

0 10 20 30 40 50

0-1415-2425-5455-64

65+Egypt age-group %

20,713,7

61,53,1

1

0 20 40 60 80

0-1415-2425-5455-64

65+

UAE age-group %

Nationals vs. non-Nationals

51,4

179,4128,6

68,6

428M Total Population

GCC

N.Africa

Rest

CIS

4831

56

14

67

12

5269

44

86

33

89

0,00

10,00

20,00

30,00

40,00

50,00

60,00

70,00

80,00

90,00

100,00

Bahrain Kuwait Oman Qatar SaudiArabia

UAE

• High number of non-Nationals diversify MENA in a cultural, socioeconomic, and income level.

• Qatar is No.1 with 88.1% using internet and No.2 only to Republic of Korea (97 percent) for percentage of households with internet

*Source : IMF, UN and National institutes of statistics


15%

30%

45%

20%

35%

0%

10%

20%

30%

40%

50%

USA LATAM MENA EUROPE APAC

Global E-Commerce Growth %

MENA’s ecommerce has the highest growth in the world

6 7,8 10,5 15,220,6

26,733,4

41,752

0

10

20

30

40

50

60

2012 2013 2014 2015 2016F 2017F 2018F 2019F 2020F

MENA E-Commerce Volumes $ (B)

*Source : E-Commerce Foundation, Visa, Aramex, Payfort

28%

72%

1st time Online Buyers

>2years

<2 years

• Fastest growing e-commerce region in the world as a result of increase in internet and credit card penetration

• Saudi Arabia and the UAE contribute to %65 of e-commerce in the region and %75 with Egypt

• Consumers are just getting started!

More consumers discovering e-commerce and growing the base


8,2

17,4

40,7

2,6 3,96,810,6

15,2

2,4 1,60,0

10,0

20,0

30,0

40,0

50,0

UAE KSA Egypt Kuwait Jordan

*Source :A.T. Kearney, eMarketer,

97,40%

2,60%

GCC Retail %

Retail Store

Online Retail

Strong traditional retail limit online adaption but bound to grow

ROOM FOR GROWTH

• $221B Offline vs $15B Online Retail in GCC

• Brick and Mortar Merchants coming online with omni-channel looking to leverage digitalization cycle

• Internet users are becoming online buyers but lots of room for growth

RO

OM

TO

GR

OW

85%

15%

MENA Merchant’s Online Presence Internet Users and Online Shoppers

160M60M

Online Shoppers Internet Users


And Mobile represent an enourmous opportunity – one of the regions

to test mobile only strategy

25%

75%

Mobile vs Web Volume

*Source : PayPal, Gemalto, Payfort,

500 900 1300 18003000

41505700

8000

0

2000

4000

6000

8000

10000

2011 2012 2013 2014 2015 2016 2017 2018

M-Commerce $ (M)

61,23%

50,41%42,07%

23,71% 19,06%

0,00%10,00%20,00%30,00%40,00%50,00%60,00%70,00%

Internet Access Points

41%

21,30%

0%

10%

20%

30%

40%

50%

MENA Global Avg.

Mobile Purchases

MENA consumers with a mobile phone purchase more with their devices than global average

• Web still leads despite mobile adaption but will quickly chance• 2.9 avg. smartphones per person in GCC countries!!• The adoption of m-commerce in UAE is second only to China

48%

34%

6% 6% 2%0%

10%

20%

30%

40%

50%

60%

Share of Apps installed

Presentation of PayPal

Two sided network

MERCHANTS & DEVELOPERS

CONSUMER ENGAGEMENT Increasing transactions per customer

14,5+ MILLIONS OFmerchants and developers

MORE DATA More than 1B transactions

per quarter

CONSUMERS

188Mactive customer accounts


Starting your business with a normal your business as a start-up is

hard!

63

Normal gateway PayPal

Deposit From 5,000$, up to 100,000$ On average 25,000$ None

Monthly fee From 1,000$, up to 5,000$ None

Paperwork Dozens of documents,

multiple copies, all hand filled None

Sign-up time Up to 6 months <5 minutes

Decline rate Up to 95% Much lower, depends on markets


PayPal has partnered with the greatest merchants in the region!

CONCLUSION


“May the Force be with you”

Any questions?

[email protected]

PayPal MENA 2016

Documents

Transcript of PayPal MENA 2016