Oman E-Commerce Market - Growth, Trends, COVID-19 impact, and Forecasts (2022 - 2027)

The Oman e-commerce market is growing rapidly due to rising smartphone consumption, increased sales and demand for internet adoption in the region. However, the implementation of 4G and 5G technologies for connectivity will increase the visibility of customers' online shopping. Therefore, it is expected that the technical awareness of customers will have a great impact on the growth of the market. The market is expected to grow at a CAGR of 21.6% during the forecast period (2022 - 2027).

Key Highlights

• The large number of Internet users in Oman, combined with the promotion of the "digital society" and "government" by the Omani government, provides opportunities for B2C and B2B e-commerce. According to Digital Oman 2020, the country has approximately 4.66 million active internet users, 6.24 million mobile subscriptions, and 2.8 million social media users.
• The Oman government has recently begun implementing eGovernment initiatives related to providing electronic payments (ePayment), especially internet payments, and has since required most government services to make online payments. The nationwide ePayment Gateway Portal enables secure payments for eGovernment services, e-commerce, eTendering, online donations, and other online transactions.
• Consumers in Oman mainly buy clothing, airline tickets, beauty products and hotel reservations online. In Oman, domestic e-commerce has grown, especially in grocery stores, as companies have moved to online platforms as physical stores have been closed due to COVID-19 restrictions.
• E-commerce companies offer cash on delivery (COD) to buyers as a payment method, as the majority of customers in the country refused to pay when the product was delivered. 30%-50% of shoppers also use it when purchasing goods and services over the Internet. COD was introduced to combat payment security issues in online transactions, but this mode turns out to be expensive for organizations.
• However, due to the current ongoing situation of Covid-19 and the lifestyle of Oman citizens, the future of the electronic food logistics movement in Oman is not yet accurate. However, the future of electronic groceries in Oman is bright, especially with the increase in Oman's online shopping users due to Covid-19. The results show that COVID 19 has changed the purchasing behavior of customers.

Key Market Trends

Internet consumption to attract tech-savvy consumers in the country

• Increasing adoption of 4G and 5G technologies is driving the growth of this market. For example, telecommunications company Oman planned to deploy 2226 5G sites by 2024. This will improve internet usage in this country.
• 5G is already impacting smartphone users around the world, including Oman, and expectations for future technology are highlighted in a report by Ericsson Consumer Lab. Indoor coverage is one of the key areas revealed by consumer surveys, and the benefits of 5G mobile connectivity have already reduced the WiFi usage of phones indoors by one of the 5G users.
• As a part of the commitment through Sony Ericcson toward the Omani Government and helping Oman Vision 2040, it is running intently with distinct authorities government to sell the technological innovation solutions in the use of the internet as an enabler to force increase of superior use instances in Oman as the region prepares for a post-pandemic world.
• The internet penetration in the country is also benefiting the country's government. For instance, in April 2021, the Oman National Statistical Information Center (NCSI Oman) was successful in using mobile location data for official statistics. It became one of the key data sources for measuring tourism, population, and commuting. Mobile position data can reduce the number of field studies, frequent family and business visits to conduct field studies, and speed up response to development planning requirements. In addition, it can be used to cover new statistical areas that may be needed for development planning.
• In a business environment that features initiatives that drive digitization, service providers are encouraged to keep up with the latest technology and meet the projected demands of technology-savvy consumers in the country. This provides entertainment, lifestyle, tourism, education and workplace service providers with the opportunity to monetize.

Fashion Industry to have a significant growth in the Country

• Fashion and fashion products are one of the most targeted product categories on Oman's e-commerce website due to their importance and the need for online shoppers. Shoppers want to help them in some way to save and reduce spending on purchases. Therefore, online shopping was the perfect solution for them as they can save a lot of money with their unique downloads and free services.
• Launching an online store is considered to be a cost-effective process in addition to the low monthly cost of these websites compared to the actual stores. These reasons contributed to the low prices of products and the expansion of the possibility of competition in Oman markets.
• Many brands also focus on extending their business in the country as part of the business expansion. For instance, in March 2022, Kayfi, a middle eastern brand, announced that it was moving into the Oman market. The e-commerce store went live in Oman on 20th February 2022, with a gorgeous range of clothing products.
• Similarly, in February 2021, more Omani women need to be encouraged to get into fashion design, tailoring, and embroidery jobs, and they need appropriate support. According to Oman's Youth and Human Resources Committee of the Majlis Al-Shura said that the Shura Council could hire more women from the country. The meeting discussed the controls and standards set by relevant authorities to regulate women's sewing and sought the authorities' views on suggestions for increasing women's participation in the fashion industry and related professions.
• In addition, various government initiatives and regulations support the growth of the domestic e-commerce market. The Ministry of Commerce, Industry and Investment Promotion strongly encourages people to use e-commerce for shopping and other activities.

Competitive Landscape

The Oman E-commerce market is moderately competitive with key players in the region innovating new solutions in the e-commerce market for various end-user applications. Also, companies are making investments and partnerships to expand the business in the region making e-commerce platforms accessible to the people in the country.

• September 2021 - Talabat Joins Oman Telecommunications Regulatory Authority (TRA) to Optimize Oman's Rest tech Ecosystem. Talabat's mission is to contribute to the country's social and economic progress while providing innovative and sustainable online retail services in Oman. By partnering with TRA, it hopes to continue to provide the industry with a path of growth and have an even greater impact on the customers and Oman.
• November 2021 - Sabco Sports has signed Rafeeq, Oman's e-commerce platform, as the main sponsor of all sporting events during the season, including Al Mouj Muscat Marathon. As part of its business expansion, the company plans to offer more products at Rafeeq, so people can get the maximum benefit. Rafeeq is an online supermarket in Oman that offers a wide range of products delivered in Muscat via iOS and Android mobile applications.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support

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