The Rise of Conversational commerce
Time spent on digital media has shot up over the last 1-2 years; social media & Messaging is the most consumed channel.
1. Time spent on digital media has shot up over the last 1-2 years; social media & Messaging is the most consumed channel…
In recent years, the use of digital channels has increased >60% vs pre-pandemic times. The main reason for this rise is restriction in movement and more people working/studying from home in 2020. Currently, the daily time spent on digital media in the region is around 8 h 30 m which is on a higher side compared to global average (7 h 30 m). ~50% of the total digital media time is being spent on social media/messaging and short form which shows the high opportunity for Conversational commerce.
Note(s): 1. How are you currently spending time on your phone/laptop for the following activities? 2. Pre-Pandemic: Before March 2020; During Pandemic: April – May 2020
2. …which bring into prominence numerous Conversational commerce models
In MENA region, Direct selling is the most popular model followed by backend enabler which has grown exponentially in recent years. MENA consumers usage is spread across social media channels with Facebook and Instagram at the forefront. Regarding Backend enablers, the big players in this market are global ones; however, in recent times, we have seen many local players (unifonic, cequens, R2S logistics, HyperPay, etc.) emerging in this space.
Different Business Models In Conversational Commerce
3. Awareness and adoption of Conversational commerce is high, with emerging markets paving the way…
Given that CC awareness is high across markets, expansion strategies should focus on increasing CC adoption amongst consumers. In terms of adoption, MENA countries have higher adoption compared to global average. In Egypt, this trend is stronger with Conversational commerce contributing >10% of the total online sales in terms of volume.
Country CC Awareness1 vs Adoption2, % of Internet Population3
Note(s): 1. Are you aware of conversational commerce? 2. Have you used messaging platform to order products? 3. With internet access, age groups: 18 to 64 years, top 80% income strata
4. …and numerous backend enablers have risen in this segment who are solving for key demand & supply gaps
Backend enablers are supporting SMEs, individuals and small to mid-size companies to reach the customers through alternative channels. These enablers are leveraging technology to automate the processes across value chain from marketing & discovery to the delivery of service/product.
Backend Enablers Offerings Across Value Chain