Why is Lebanese eCommerce so dormant?

The retail sector has evolved dramatically over the last decade. No longer are shoppers constrained by the physical presence of inventory, nor are they forced to venture out in their overheated cars, stuck in rush hour traffic, only to find that the crowded mall has run out of their favorite item.

E-commerce has allowed users to buy anything they want with the click of a few buttons and a couple of days of delivery time. Lebanon, with its growing internet and credit card penetration, as well as its modern and tech-savvy shoppers, should be one of the region’s early adopters of e-commerce! However, Lebanon still relies heavily on physical shopping, while online shopping only gets a second (third, fourth or fifth) thought. So why has e-commerce in Lebanon and the Middle East lagged behind the rest of the world? Below are the top three reasons why Lebanese eCommerce has been struggling to catch up:

1- Lack of viable payment portals:

The country has two relatively outdated payment gateways that do not integrate with websites. As such, customers are directed to external links and forced to re-enter their credit card details for each purchase. This is highly impractical and reduces the ease of second purchases.

In addition to the outdated nature of payment portals, they have a monopoly on the market and charge exorbitant fees: initiation fee of $350-$500, transaction fees of 3.5-4.0%, as well as “maintenance” costs of $ 35-$50 per month. .

Furthermore, the lack of Paypal and other online payment portals in Lebanon creates a huge challenge for e-commerce businesses.

“Ease of payment” is ranked as one of the highest conversion factors for eCommerce businesses. Lebanon offers lousy options and therefore online businesses struggle to offer dynamic options such as one click shopping and Paypal.

2- Lack of practical online shopping:

Most of the new e-commerce companies in the Middle East have been established to cater to the “hip” and “hip” crowd. They offer flash sales on high-priced designer items, indexing of exclusive local boutique designers, or niche gift items catering to niche consumers. In addition, the “old guard” of e-commerce in Lebanon offers the typical online gift selections: flowers, chocolates, teddy bears, and other “unique” emotional gifts.

With the exception of a very few sites, most Lebanese websites have a very basic design with little attention to practicality and detail. Pop-up menus are awkward, data entry is challenging, and most products are not searchable.

Examples of these “old guard” websites are:

Exotic flowers: This site charges high shipping costs, overcharges for its flower bouquets, and tends to deliver smaller and cheaper flower bouquets than it promises online (has happened to me multiple times!). Also, they only deliver flowers! They are one of the highest ranking e-commerce sites in Lebanon with 1.3 million globally (www.alexa.com). They also take credit for adopting the online delivery system early, though they haven’t felt the need to improve due to the lack of a major competitor.

Buy Lebanese: Colors, fonts, sizes, photos and charts are not user friendly. However, they rank quite high on Alexa.com: 2.5 million globally. This group takes credit for being one of the early adopters of e-commerce in Lebanon! Tip hat to your foresight!

961 gifts: I’m not sure about the name of the website, the design seems basic, but the menu items are clear. Its product strategy is based largely on unbranded flowers, perfumes, cosmetics and accessories: global ranking of 4.2 million.

Examples of newer “niche consumer” sites are:

lebelik, Eezmeez, VIP Brand

Some of the newer websites have focused on great design and achieved relative success in modern, young markets. However, apart from Marka VIP, which is based in Dubai, none have really managed to reach a big enough market.

3- The purchasing power is in the expat community

Companies that focus on local buying power online will struggle in the short term. Hopefully this will change as Lebanon progresses (If only). Until then, however, the buying power of Lebanese e-commerce sites will come from the Lebanese expat community looking to offer gifts to their families and loved ones in Lebanon. This creates quite a challenging market for eCommerce businesses. How do you address your diaspora? Who is your target consumer? Is the market oversaturated with unique gifts like chocolates, flowers, and niche designer items?

how to fill the void

As such, we identified the need to establish a convenient, affordable website that provides customers with quality and convenient options for gifts or personal use. The reasons why I believe that such a model will overcome the challenges of the sector are:

a- Payment gateway technology will inevitably improve, along with market confidence in online payment

b- The market is saturated with unique gift items that normally fall under flowers, chocolates and traditional gift items. Therefore, the competition is minimal.

c- The market has seen high quality designer boutiques appear online, but these only serve a niche market segmentation. Highlighting the fact that online shopping adoption is on the rise

d- There is no website that offers practical and useful gifts for the home with high quality branded items.

Soon, there is a gap in high-quality, well-priced branded items online in the Middle East and Lebanon. There is a gap in websites offering quality home goods such as Riedel, Nambe, Pip Studio, Bodum, Greenpan, Images D’Orient, Voluspa as well as many other global brands. Instead of sending high-priced flowers, chocolates, or niche products, wouldn’t the consumer like to have an online option to:

a- Housewarming Gifts in Lebanon

b- Marriage records in Lebanon

c- Wedding gifts to Lebanon

d- Lebanese gifts that do not include cheap Chinese products, high priced niche items or flowers and chocolates!

Thanks!