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Jul, 2022     

Consolidation Is What Lies Ahead For MENA

The creator economy rose to even greater feats in 2022 and will account for a much larger slice of the marketing pie by end of 2022.


1. MENA has a large digital economy but is fragmented across geographies

 

MENA’s digital economy is on par and rivals that of global emerging markets such as Indonesia and India as it exceeds $90 Bn.

However, the MENA market is spread across 21 legal entities with tremendous fluctuations in the legal landscape. Moreover, within the individual market themselves, the top 3 players’ share is around a timid 40%-nearly half of that of Indonesia. All this sets the tone for mostly fragmented markets within a cluster of nations. Thereby reducing feasibility and scale of operations.

2. However, Consolidation can address these pain points & improve MENA’s already attractive unit economics

 

Consolidation would enable players with existing consumer trust and active channels to utilize synergies with rising brands and either expand their vertical offering and/or tap into adjacent market opportunities. This is an ideal process to improve unit economics and thereby luring more potential shoppers into their space. Example: Careem’s most recent acquisition of Munch:ON

3. Consolidation is already underway in MENA

The rapidly growing volume of acquisitions taking place in the digital economy is emblematic of the strides MENA has taken in its digital economy evolution. The number of acquisitions in H1 2022 has already eclipsed all of 2020 and exceeded H1 2021 by over 30%.