The GCC is making news in three categories that help shape its business and financial future.
The GCC B2C e-Commerce Market Report 2018 says that B2C e-Commerce in the GCC will double by 2020, according to Markets Insider.
Based on findings by ResearchAndMarkets, projects online retail sales in the six nations comprising the GCC in 2020 to be twice the level of 2017.
“B2C e-Commerce in the GCC is in early stages of development. Even in the UAE, the largest online retail market of the pack, e-Commerce accounts for a small one-digit percentage share of total retail sales,” said Markets Insider.
“While the UAE was ahead of the Kingdom in terms of online retail revenues as of 2017, higher growth rates are projected to propel Saudi Arabia to the leading position in the GCC B2C e-Commerce by 2020, with the UAE moving to the second place.”
Qatar and Kuwait are projected to rank next, followed by Bahrain and Oman, according to the report.
Market data and surveys showed interest in online shopping but lack of trust in digital payment methods.
In Bahrain, though search for items online is high, online shopper penetration reaches less than one-third of Internet users.
“In the UAE and Saudi Arabia, the frequency of buying online remains low, with the majority of shoppers making purchases at online stores less than once a month.”
A survey of GCC millennials conducted in 2017 revealed that not being comfortable with online payments was the main barrier to buying online.
“Cash on delivery is the preferred method of payment in the GCC, outranking credit cards by a high margin,” said the report.
“Furthermore, the local E-Commerce offering remains limited, especially in smaller markets, while international E-Commerce platforms such as Amazon.com, eBay.com and AliExpress.com rank among the most visited websites in these countries.”
The growth of the GCC facility management market is mainly driven by the increasing construction activities and growing tourism industry in GCC countries.
Facility management refers to professional services covering multiple disciplines, in a bid to ensure functionality of the built structures through the integration of people, place, process, and technology.
According to PS Market Research, property services is expected to be the largest category with an estimated contribution of more than 25% in the facility management market of GCC countries in 2017.
“Property services offer several benefits such as ensuring short vacancy cycles, rent collection, better tenant retention, assistance with taxes, and various others,” said the research company.
Repossession (repo) rates
Saudi Arabia has not announced any changes to its benchmark rates so far and analysts do not expect a further hike in rates immediately on the pre-emptive rate hike Saudi Arabian Monetary Authority (SAMA) announced on March 15.
“SAMA is expected to keep its benchmark policy rates steady with the repo rate at 2.255 and the reverse repo rate at 1.75%,” reported Gulf News.
A Repo rate is the rate at which the central bank of a country lends money to commercial banks in the event of any shortfall of funds, and is used by monetary authorities to control inflation.
Bahrain and Kuwait too raised their rates. Kuwait increased its benchmark lending rate by 25 basis points (bps) to 3% for the first time in a year, with the country’s central bank saying in its statement that it raised the rate in order maintain the competitiveness of its currency and keep local savings attractive.
“Bahrain raised its overnight deposit rate by 25 basis points to 1.75% and its one-week deposit facility rate by a 1/4 point to 2%,” said the daily.
Qatar’s central bank said on Thursday that it was keeping its repo rate flat at 2.5% and leaving its overnight lending rate unchanged at 55.
“However, the bank raised its overnight deposit rate by 25 basis points to 1.75%.
GCC central banks largely followed the US Fed in raising their rates by 25 bps, with some variations.
“The growing pressure on currencies from high discounts of some regional interbank lending rates to US Libor was a major factor in the most recent rate hikes,” said Gulf News.