For the last couple of years I have lived in a bit of an Ecommerce bubble. Working closely with a certain platform can lead to a blinkered view of the world and sometimes you lose track of the bigger picture.
Magento has always been a popular choice for retailers in the Middle East and Start-ups looking to beat the offline merchants to the opportunity of satisfying customer demand for online shopping. In the last 3 years, the Magento Enterprise Edition (EE) has been taken more seriously as a true Enterprise solution – successfully competing against systems like Demandware, Oracle Commerce and Hybris.
At the lower end of the market, Magento Community Edition has been used by several large online shops in the UAE and Middle East, but platforms like Woo-Commerce, Opencart and Shopify are popular.
But a funny thing happened in 2016. Searches in Google for Shopify exceeded searches for Magento for the first time in the UAE. It wasn’t a one off either. Searches for Magneto have been steady over the last few years, but have begun to decline. Shopify on the other hand has seen steady growth, with an upsurge recently.
Neither Magento or Shopify spend much effort growing this region. The US and Europe are still growing markets and larger than the Middle East. A couple of pioneering agencies have acted as proxies for the platforms and certain clients have driven localisation requirements.
One of the reason’s for the increased interest in Shopify’s ‘Software as a Service’ approach could be the the pay-as-you-go nature of the pricing model.
In the US and the UK, many companies are re-platforming, that is changing from an older platform to a newer one, or changing the infrastructure to be able to scale or support omnichannel requirements. These companies have a good idea about their online sales performance, their daily orders and how quickly they are growing.
Many retailers in the GCC are doing Ecommerce for the first time. They don’t know what the true demand for online shopping is and they don’t know what they will need in a year’s time. In this context, an up-front license fee for Magento Enterprise in the region of $25,000 per year is a relatively large investment. Add the build costs of an Enterprise Partner’s build costs and you need to be very sure of your numbers to make it work.
In contrast, a service like Shopify Plus, which is based on marginal cost, provides local retailers an ability to test the market and scale as required.
**NOTE – the regular dips in the graph are likely attributable to Ramadan – when business hours in the GCC are reduced and many expats leave for vacation.
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