Screen shots of items being sold by social commerce merchants in Qatar.
Social commerce, which only five years ago was a relatively nascent concept in Qatar, is now growing at the same pace as the country’s booming e-commerce industry, and is now estimated to be worth $22m, an industry expert has said yesterday.
Everyday, the number of merchants selling items through Facebook, Instagram, Watsapp, and other social media platforms is increasing. And the number of social commerce merchants is expected to further increase with the upcoming World Cup 2022, which will be an ideal opportunity for entrepreneurs to sell more products.
“We are seeing more multiple sellers. I can see a potential growth in social commerce in Qatar and it’s growing in a similar pace as the e-commerce. Currently, social commerce here has a penetration rate of 37 percent and this rate may even grow up to 40-42 percent,” Waqas Iqbal, Digital Payments Manager at Twyla Technology, said while talking to The Peninsula.
Iqbal was the featured speaker for the Ministry of Transport and Communications’ (MoTC) digital session on ‘Social Commerce in Qatar’, which was held yesterday as part of the MoTC’s ongoing series for its ‘Digital Transformation of SMEs’ programme.
According to Iqbal, Qatar has been progressing in the right direction towards digital transformation. He said the country meets all the requirements needed to transform from a market fuelled by cash on delivery to a cashless society. The requirements include Internet penetration, social media penetration, and banking and financial penetration. However, there is only one problem, said Iqbal.
“Qatar’s $22m social commerce industry is still not being regulated. Social commerce merchants are operating as per their own will. Instagram merchants and people selling through Facebook and other social media platforms are operating as per their own convenience. This is not being regulated, and it is not being recorded in a certain way. So this is not being recorded under the Qatari economy,” he added.
Iqbal highlighted the importance of regulating the local social commerce market and reiterated that the Qatari government is already looking into the issue. He added that majority of social commerce merchants also still do not have electronic records of their transactions.
He said this can be solved by adopting an invoicing solution, as well as putting in place a unified platform or a single application where vendors can come in and generate their orders electronically. Iqbal also referred to the Escrow online payment system, which is popularly used in the US and Chinese markets, and can also be adopted in the Qatari market.
The Escrow method reduces the risk of fraud by acting as a trusted third-party that collects, holds and disburses payments only when both buyers and sellers are satisfied. Iqbal added: “This is a $22m industry, and it is important to digitise the entire value chain. And the Qatari government is looking into it. The World Cup 2022 is coming up, and there will be much more social commerce merchants here in Qatar. So definitely we are expecting something from the Qatar Central Bank on this. To date, social commerce merchants in Qatar are still not using the electronic invoicing (e-invoicing). They are gradually coming up with the payment links. Around 20 percent of them are now digitised, and are using some form of invoicing solution or payment link solution.
“Having a digital solution in place will boost the confidence of social commerce merchants, and using prepaid payments will also help them prevent last minute cancellation orders. Also, this will protect the consumers as well. Since the merchants will be registered, customers can rest assure that the merchants will only send authentic products,” added Iqbal.
Currently, the MoTC is implementing the ‘Theqa’ trustmark programme to empower businesses and consumers in Qatar’s e-commerce industry. However, social commerce merchants are not validated under the same programme. Globally, businesses are encouraged to digitalise and streamline their operations across both purchase-to pay and order-to-cash systems.
Speaking at the PwC webinar which was also held yesterday, Luis Ortega, Managing Director of the Middle East & African operations of Pagero, a leading global cloud-based business network provider, said by digitising, businesses can save 70-80 percent of their processing cost. He added: “Globally, there are 550 billion invoices every year. Half is through businessto-consumer, and half is through business-to-business and business-to-government.
And only 10 percent of those are exchanged in a true digital format. There is a big gap of digitalisation in the process. Digitalising businesses will improve their efficiency. And the Middle East market has been transforming towards digitalisation. Our vision is that buying and selling should be an easy process, and should be digital. It should be based on interconnected world, where buyers and sellers can connect through platforms that facilitate the exchange of data”.
