1. MENA Digital Economy to reach new heights

The MENA Digital Economy is being boosted by some of the most positive digital metrics across the world. Over 85% of the population has access to internet (this number is over 95% in UAE and KSA). And E-tail penetration is over 5% (8-10% in UAE and KSA). This has led to a digital economy of ~$45Bn value which will reach ~$100Bn by 2023.

Digital Economy – MENA, $ Bn, 2018 – 2023

Note: Non-Exhaustive list – eB2B and Edtech. not included here

2. E-tail Growth to play a key role

There was a drop in the size of the digital economy in 2020 but that was mostly due to online travel. E-tail’s contribution rose to over 40% from 27% before. And we expect this to remain sticky for the times to come.

Digital Economy by Sectors – MENA, $ Bn, 2018 – 2023

Note: Non-Exhaustive list – eB2B and Edtech. not included here

3. White spaces in funding

However, e-tail penetration in UAE and KSA is still behind other mature countries (USA:20%+). This could be in part due to the lack of larger ticket investments in the segment. There is a significant skew in investment values less than $100Mn. The boost that the sector needs could very well be in the form of funding based liquidity.

Funding Values (2014-present)

Note: Non-Exhaustive list

Author

  • Sandeep is the Partner of Redseer Strategy Consultants looking at the Middle East and Africa. He has 13+ years of experience in consulting and technology.