Recent years have witnessed the proliferation of the Internet, a global mass medium that is revolutionizing the way in which people locate information, entertain themselves, do business and interact.
The commercial potential of the Internet is growing apace with its popularity. The Internet offers advertisers and marketers enhanced reach, differentiation and targeting abilities at affordable prices.
The sale of goods and services through the Internet, commonly referred to as e-commerce, is also providing enticing possibilities. The acceptance of this medium of exchange by advertisers and marketers is expressed by the entry of large, established firms into the domain.
In the Middle East as well, the enthusiasm with which the region's inhabitants are embracing the Internet is matched by the overwhelming interest it is attracting in the business sector. Numerous business conferences have recently taken place portraying the potential the Internet represents for businesses.
As the value of the Middle East e-trade market is projected to reach $2 billion by 2002, an intense rivalry has emerged amongst the Gulf States in the race to become the regional e-commerce hub.
A significant factor that has impeded Internet growth in the Middle East so far, is the poor state of local telephone networks. With most users reliant on dial up Internet connections, the underdeveloped regional infrastructure has been a significant barrier.
The introduction of new satellite and cable based Internet services to the Middle East will no doubt alleviate this difficulty, enabling both larger audiences and enhanced efficiency. Moreover, large-scale projects are presently underway in many of the region's countries, promising a more immediate solution to the infrastructure problem.
Business leaders in the Middle East, aware of these regional trends, recognize that e-commerce is supplanting more traditional forms of business. Governments, particularly in the Gulf, are rushing to develop their high-tech infrastructures and to position themselves as regional centers in this domain. At present, the UAE (primarily Dubai) is leading the race, increasingly transplanting its traditional commerce with e-trade.
The Dubai Chamber of Commerce plans to establish a separate department to handle e-commerce-related issues and development of on-line business. The emirate recently stated that it was spending $200 million to develop an e-commerce free trade zone.
This move closely followed Dubai's declared plans to invest an equal amount to construct a high-tech wonderland. Dubbed the "Dubai Internet City (DIC)," it intends to offer lucrative incentives to foreign investors such as 100 percent foreign ownership, corporate and income tax exemptions, and a streamlined bureaucracy. Additionally, DIC will offer courses covering such areas as e-business, e-marketing and multimedia.
These bold steps taken by the Dubai government reflect the growing pervasiveness of the Internet and e-commerce in the daily life of the Emirate citizens. Last year, there were approximately 200,000 Internet users, representing 14 percent of the UAE population. This figure is inclined to leap to 64 percent within 2 years. Moreover, the UAE e-commerce market is expected to explode from just over $26 million in 1999 to $1 billion by 2004.
Developments in the UAE have roused their electronically slumbering neighbours, spurring competition from countries such as Bahrain, Saudi Arabia and Kuwait. The Bahraini government, for instance, hopes that an on-line marketplace for the logistics community will position the country at the cutting edge of e-commerce.
The project -- undertaken by GulfTradaNet and Arabian Network Information Services (a leading web developer) -- is believed to revolutionize the Gulf's cargo industry by creating a business environment without boundaries. The project will soon be operational and will support the electronic handling of cargo documentation, reservations, airway bill transfer and consignment tracking services for both inbound and outbound cargo.
Saudi Arabia is following in its neighbours footsteps. The imminent launch of wireless Internet connection is predicted to boost the Kingdom's e-commerce market, now estimated at $10-$15 million annually. Cisco Systems, which launched this sophisticated technology, has inaugurated its headquarters in Saudi Arabia. The company invested several million dollars in opening three new service centers and upgrading the Saudi IT environment and infrastructure. Underscoring its economic importance, in mid-February Riyadh hosted an inaugural e-commerce conference. At the forum, Saudi Arabia's Commerce Minister urged the local private sector to remain abreast with e-commerce developments and encouraged local banks to develop electronic payment mechanisms.
Additionally, Kuwait's private sector is jumping on the e-train. The Kuwait National Bank, which received the highest credibility rating of all banks in the Arab World, recently introduced the "National Market" service. This enables its customers to complete banking transactions through the Bank's web-site. Moreover, the Bank has, in cooperation with Visa, issued the "National Credit Card," which provides a mechanism for e-commerce.
Taking into account the enormous telecommunication projects planned across the Middle East, the regional Internet and e-commerce market is poised to accelerate over the upcoming few years. Companies with a presence in the Middle East must not overlook the Internet as a valuable medium through which to market their products and services. - (Albawaba-MEBG)
© 2000 Mena Report (www.menareport.com)
