Bahrain - ECommerce Bahrain-ecommerce
E-commerce is rapidly expanding in Bahrain. Computer-literacy rates are high and businesses recognize the commercial value of the internet. Bahrain has an internet penetration rate above 96 percent, which has led to higher online shopping rates than in other GCC states.
Bahrain has an Electronic Transactions law that recognizes the validity of electronic transactions. In a push to use this technological opening, MoICT operates an electronic governance program and a directorate for electronic commerce to promote e-commerce services. Banks offer electronic banking, and many utility companies now accept electronic transactions for bill payments.
Legislative Decree No. 28 of 2002 covers:
- The application of electronic records and signatures.
- Electronic transactions, records.
- Legal recognition of electronic records in evidence.
Bahrain’s Information and eGovernment Authority (IGA) enhances the services provided by the government to citizens, foreigners, the private sector, and investors.
Bahrain’s digital strategy focuses on eight pillars: increased participation and engagement; increased partnerships and private sector ICT readiness; improved national e-literacy and government IT skills; heightened protection of information and user rights; a higher-performing, collaborative, integrated, and efficient government; comprehensive and effectively managed quality service; enhanced e-government channels and user experience with increased service uptake; and greater innovation and entrepreneurship. MoICT permits online commercial registration to companies with 100-percent Bahraini ownership, in part to encourage the development of e-commerce activities in the Kingdom.
There are many obstacles to the growth of online businesses, among them low adoption rates of online retail by local businesses, the predominance of cash on delivery payments and low consumer acceptance of online shopping, compared to international benchmarks.
The ICT sector constitutes a major pillar of Bahrain’s economy. It is one of the core sectors the Bahrain Economic Development Board has focused on developing, both to attract direct foreign investment and to expand local employment. Recent years have seen a significant expansion in the ICT landscape, as well as a push towards cutting-edge technologies, including FinTech.
Travel bookings have been the leading product category purchased online, and shoppers are increasingly beginning to purchase physical products online as well, particularly electronics, computers, and jewelry. Online shopping for clothing also has begun to gain in popularity. Online food delivery services are also growing in popularity and present market opportunities.
Bahrain’s National E-Government Strategy 2016 constructed Bahrain’s digital strategy on eight pillars: increased society participation and engagement; increased partnerships and private sector ICT readiness; improved national e-literacy and government IT skills; heightened protection of information and user rights; higher performing, collaborative, integrated, and efficient government; comprehensive and effectively managed quality service offering; enhanced e-government channels and user experience with increased service uptake; and greater innovation and entrepreneurship.
Bahrain claims to be the fastest-growing B2C e-commerce market in the region. However, as of 2016 B2C e-commerce transactions accounted for only for five percent of total retail sales and eight percent to the gross domestic product.
The main challenges faced by the e-commerce sector in Bahrain are:
- Finding the required funds to start a business;
- Compliance with legal, regulatory and governmental requirements;
- Finding skilled human capital;
- Identifying proper investment opportunities.
The kingdom’s matured industries/sectors in terms of E-Commerce involvement, and participation in the GDP are:
- Telecommunications
- Financial Services
- Government Services
- Information Technology
- Tourism
- eWholesaler / eRetailer
The top enabling factors for cross–border shopping are:
- Free shipping;
- Safe payment portals;
- Items that are not available locally.
- Delivery / shipping fees;
- Identity theft / fraud;
- Items that do not arrive in the mail as described at purchase.
- Souq.com
- Genuineclassifieds.com
- Amazon.in
- Jadopado.com
- opensooq.com
- eBay
- Alibaba.com
- Talabat.com
The BENEFIT Company (Bahrain’s Electronic Network for Financial Transactions) is the national gateway that handles payments or electronic money transfers in Bahrain and is the backbone of the Kingdom’s financial services industry. It is licensed by the Central Bank of Bahrain as a provider of ancillary services to the financial sector. Services include managing the national ATM switch system and switching local debit card transactions at the point of sale, as well as operating the Kingdom’s credit reference bureau, internet banking shared platform, direct debit, payments gateway, check clearinghouse, and dispute management systems.
By the mid-2000s and due to the increased demand for online payment facilities in Bahrain, the BENEFIT Company and ACI Worldwide created a national payments gateway that enabled members to process online transactions made with all locally issued debit cards, as well as VISA, MasterCard, Amex and JCB credit cards.
Mobile commerce has high potential in the Middle East, as smart phone and tablet penetration is high. Social media has become a popular medium for advertising, and for personal purposes. The 2017 usage penetration rates in Bahrain were 85 percent for WhatsApp, 93 percent for Facebook, Instagram at 61 percent for Instagram, 72 percent for Twitter, and 44 percent for YouTube.