Post Pandemic Business Trends in MENA

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Photo by Yaroslav Danylchenko from Pexels

If you are an ambitious entrepreneur or leading a business in the MENA region, these post-pandemic ideas will help you navigate your business successfully through the market consequences implicated by COVID-19.

As the world adopts a new normal, so does every industry. The COVID-19 pandemic has shut, forged, and challenged businesses to think outside the box to survive. The pandemic is still an evolving topic for many businesses, especially for aspiring entrepreneurs to learn to navigate with the uncertainties COVID-19 brings to the market. 

The two key factors COVID-19 left on us are social distancing and remote work, forcing businesses and institutions to reshuffle traditional physical presence at the office and a set nine to five job. On the other hand, new post-pandemic ideas have paved the way for existing industries while forming new ones too. COVID-19 made a few things clear: the future is in sustainability (in all aspects), digitization and fintech, leaving upcoming entrepreneurs to push the envelope of innovation and creativity.  Reefaya Noortaj and Athwifa Saleem examine these post-pandemic trends that have been changing the market space in the Middle East: sustainable architecture, online retail, inclining e-commerce and the rising Fintech market.

Photo by cottonbro from Pexels
Photo by cottonbro from Pexels

1. Sustainable Architecture

Going Green architecture is one of the foremost city plans for the UAE in a post-pandemic era. The total constructed area of green or eco-focused buildings add up to 64 million square meters in the UAE, stated by the Emirates Green Building Council. Infrastructure will consist of hygiene, clean contact, pure air, water, low carbon materials and energy efficiency conductors that would determine the next set of building standards in a post-pandemic city-scape scenario. To brief, UAE has 386 green building projects under the U.S. Green Building Council’s LEED [Leadership in Energy and Environmental Design] certification. The construction industry, including buildings, accounts for 40% of energy-related emissions globally and more so in the UAE, thus the government is aiming for deep retrofitting and net-zero carbon buildings by 2050 backed by the UAE Green Building Market Brief. Additionally, Dubai’s target of reducing embodied carbon in the buildings and retrofitting 30,000 buildings by 2030 in order  to reduce energy demand by 30% through energy-saving companies. Going green is not any fad to the UAE but a promising future. The nation is adamant to achieve the lowest carbon footprint by 2050; EGBC has partnered with International Living Future Institute (ILFI) to offer Zero Energy and Zero Carbon certifications for building in the UAE market. For example, buildings will be able to monitor their carbon emission levels through free cloud-based software with the One Click Life Cycle Assessment Planetary launched in 2020.

Post-pandemic architecture may look green but it has left a mark on corporate office culture, leaving corporations to scramble for solutions for the employees. In recent dialogue, the office culture is becoming a thing of the past while remote work or flexible working hours are things of the present and future. In the Middle East, office space will not die out just yet but new models and preferences are emerging, and different levels of work will be performed under personal flexibility. Further, management has transformed the office environment to accommodate new lifestyles. Brookfield Properties Middle East highlights that the level of interest in the LEED Platinum-certified commercial towers under the pandemic scenario proves that the ‘green’ trend is showing desirability amongst corporations and investors. For example, skyscraper office buildings have also introduced UV light into their air system regulation to deal with viruses and bacteria, in an effort to safeguard employees. Since skyscrapers make-up the majority of the UAE’s cityscape, it is reasonable to transform these buildings into sustainable energy conservators. Although, remote work and flexible choices are the latest priorities given to employees in the current corporate culture, however, physical office presence is not absent yet in the UAE. Multinational corporations are additionally focusing on wellness in workplaces by implementing facilities such as gyms, food and beverage outlets, and sanctuary spaces.

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Photo by Scott Webb from Pexels

2. Omni Retail In Full Force

 The GCC is often depicted as the heaven of luxurious malls consisting of all brands and entertainment ever imagined to the common person. Before the pandemic, the major retail stores already established their presence online and the end profit returns were sufficient. However, the COVID-19 crisis disrupted the retail scene and created an unimaginable surge in online retail demand. During the pandemic, online retail sales have accelerated its growth targets to 30% by 2025, depending on the estimated growth of 25% by 2025. Although consumers have the purchasing power to finish the transaction online, we still notice a pattern of many shoppers browsing items online but purchasing items offline. Therefore, a brand’s online and social media presence is a must. COVID-19 has opened a door of convenience for the avid online shopper and a personalized algorithm for the consumers to find their desired products swiftly.  

For e-commerce companies to handle the high volumes of online demands, they need to reshuffle positions and re-skill workers, according to Dubai Future Foundations. In the coming year, the retail market in the Middle East is expected to reach $26billion, with the GCC accounting for $11billion and the UAE for $4.6billion researched by Dubai CommerCity. In the upcoming post-pandemic era consumer behavior will considerably change as the online retail market will dominate brick-and-mortar models. For example, Kinan, a Saudi joint-stock company that develops residential communities and operates malls in the country, partnered with the region’s leading e-commerce retailer Noon to provide pickup services for its shopping centres’ online clients. 

3. Incline of E-commerce

E-Commerce, regardless of being retail, service-oriented, transactional, or government, has outstanding potential for development in the Middle East, with the onset of the COVID-19 pandemic being an accelerator of sorts for the turn of events. Long before the pandemic, the Middle East has been gearing up for a genuine e-commerce boom, both in cross-market competition and client use. Despite the slump faced by the commercial sector at the onset of the pandemic, long stretches of progress have occurred recently with the offline market moving to the web. This growth can be mainly attributed to the rise in demand for swift delivery of products and services. Recently, in a study shared by the Dubai Economy, Dubai Police, and Visa, it was seen that 49% of purchasers were shopping on the web more since the COVID flare-up, with most of these clients (61%) presently utilizing cards or advanced wallets to pay online over cash on delivery (COD). The post-COVID-19 summary is that 43% have kept utilizing electronic payments and 48% will decide electronic payments online over COD for future e-commerce transactions. 

Most of the Middle East buyers have diverted online to reach out to retailers whose stores were shut during the pandemic. The upscaling development of online ventures brought about during the outbreak, gives a wide scope of expected advantages including: embellishing a multifaceted channel to reach out to clients, providing prominent choices to consumers at combative costing and engaging with territorial and global business sectors.

In the Middle East, there currently happens to be a rising set of online business contenders, with notable prospects such as Amazon, Namshi, Noon, and Zomato. Also potential newcomers like Carrefour and Lulu Hypermarket have effectively built up a solid omnichannel web-based business platform and are competing with established players in the market. As innovation and technology advances, we presumse we will  see a boom throughout the years to come.

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Photo by PhotoMIX Company from Pexels

4. The Rise of FinTech 

The Financial Stability Board (FSB) recognises Fintech as “technologically enabled financial innovation that could result in new business models, applications, processes, or products with an associated material effect on financial markets and institutions and the provision of financial services.” Much before the onset of the COVID-19 pandemic, FinTechs had been steadily shifting the face of the global financial sector services from digital payments, lending, insurance, asset & wealth management and capital markets to supervision. The ongoing pandemic has showcased the increasing demand for digitization with FinTechs, thereby enabling safe and distant functioning not only to the global financial services industry but the entire economy, with some Fintech companies having shed light in the business environment in 2020. As global markets begin to reopen, the time is now for governments, businesses and individuals to embrace the financial services of the future. According to a recent report by PwC, the Middle East is investing heavily in the FinTech space, upon being inspired from global leading FinTech Hubs such as Singapore and the UK. According to a recent analysis from KPMG, markets in Europe, Middle East and Africa (EMEA) saw deals worth $4.6 billion in the first half of 2020, with the region sprouting new early-stage fintech hubs. The fintech market in the Middle East is well composed for expansion and diversification with the  growth fueled by the launch of new enterprises that are geared towards supporting the fintech sector. 

While the world is still adapting to the changes brought forward by the COVID-19 pandemic, we are yet to witness more emerging entrepreneurial trends that will collectively aid to the betterment of the economy and the entrepreneurial platform.

About The Editors

Athwifa is a business graduate of Sikkim Manipal University and has been on the pursuit of enhancing her career as a content writer, in the past contributing to coveted publications in the region such as Harper’s Bazaar Arabia. Athwifa is passionate about culture, food, hospitality and wellness as well as scouting the latest trends.

Born in Bangladesh and raised in the Middle East, UAE and Bahrain, Reefaya is a postgraduate from The London School of Economics in U.K. and an undergraduate from Sussex University. Reefaya has an immense love for sustainable fashion, social development and art.