Why is e-commerce not benefiting the Arab world? by Sami Mahroum

Although leading metrics of digitalization and e-commerce are steadily increasing in the Middle East and North Africa, the outlook is anything but rosy. Not only is internet access largely limited to those with higher incomes, but the bulk of traded goods and services come from foreign suppliers.

DUBAI — For centuries, the streets of Cairo have been adorned with traditional lanterns to celebrate the holy month of Ramadan. In recent decades, locally produced lanterns have been replaced by cheaper Chinese-made lanterns. Yet due to the disruption of global supply chains caused by the pandemic, Egyptian-made lanterns made a comeback last year. It remains to be seen whether their revival will last.

The story of the Egyptian lantern is just one pixel in a much bigger picture. In the Middle East and North Africa (MENA), new technologies are increasingly facilitating trade within the region and between local markets and the rest of the world. Digital platforms such as Alibaba, eBay and Amazon have expanded the range of goods and services that can be traded across borders. Digitization has not only increased the scale, reach and speed of commerce; it has also changed the way companies trade across borders and allocate resources.

Successful local e-commerce platforms are usually a source of pride. But while digital platforms offer consumers a wider variety of goods and services and enable businesses to trade internationally more efficiently, they also subject local businesses to tough, and sometimes unfair, competition.

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