E-commerce takes deeper roots amid pandemic — sector representatives

AMMAN — The government has expanded the ceiling of the customs duty exemption on goods bought online from outside the Kingdom to support the e-commerce and logistics sectors and to speed up clearance procedures, according to Finance Minister Mohamad Al-Ississ.

According to a Finance Ministry statement, the Customs Department expanded the customs duty exemption ceiling on goods bought online from outside the Kingdom and intended for personal use from JD100 to JD200.  For packages below this threshold, a fixed 10 per cent fee will now be imposed. 

The Finance Ministry is undertaking a comprehensive review of the customs system to “simplify business procedures to serve the national economy”, Al-Ississ noted.

Recent studies have observed that the e-commerce sector in the Middle East and North Africa region is on the verge of distinct levels of continuous growth during the coming period.

“The starting point of e-commerce in Jordan 20 years ago was low profile in terms of users and usage penetration. I believe that in the past five years we have witnessed a good trend of movement towards e-commerce, particularly in Jordan and in the region as a whole,” Amjad Al Sadeq, CEO of Network International, a global payment solutions company, told The Jordan Times.

Sadeq also highlighted the “huge technological shift” in the sector.

“E-commerce is a good start for a success story in Jordan, but we have not reached the optimal level yet. There is big room for evolution and improvement, taking into consideration all the changes in the past five years and mainly the pandemic, a good adaptation of the e-commerce business has emerged,” he said.

In the past two years, Jordan witnessed “a 100 per cent growth” in the ecosystem, with an ever increasing number of stakeholders and merchants involved in the e-commerce. More users are also buying online, Sadeq said.

Mohammed Al Youssef, the director of ZoodMall in Jordan, an e-commerce platform in the Middle East and Central Asia, said that the e-commerce market witnessed “an unprecedented increase” during the pandemic period.

“The volume of e-commerce in the Middle East and North Africa region currently accounts for about $8.3 billion, or 1.9 per cent of total retail sales,” Youssef said in a statement.

Trade in e-commerce platforms is expected to reach $28.5 billion in 2022 in the Middle East, which is 3.5 times the current trade volume and nearly 7 per cent of total retail sales, the statement said.

This coincides with the increasing demand among consumers for electronic payment options, and the growing awareness of merchants to enhance their electronic presence during the pandemic.

However, one of the main challenges that e-commerce faces in Jordan is payment, according to Sadeq.

Despite the fact that many companies have built all the needed global security standards for the consumer to safely use online transactions, it is not reflected in people’s behaviour, Sadeq noted.

However, there is a significant increase in the level of trust of using online transactions for e-commerce in Jordan, he said.

The pandemic strongly contributed to the shift towards most people transacting online, due to the “enforcement” of online usage because of the lockdowns. Therefore, people were equipped with the needed tools for online transactions, Sadeq added.

“Local traditional shops did not consider e-commerce as a vital aspect in their retail approach in the past, but the rapid Internet penetration, connectivity and the technological revolution have gotten all merchants from small to big retailers to shift to e-commerce,” Sadeq said.

The majority of the Jordanian population nowadays is youth who are equipped with the necessary tools for online transactions. All stakeholders play a huge role in shifting the consumer behaviour along with online governmental services,” Sadeq added.

The main factor that will shift the consumer’s behaviour towards adopting online methods is the government’s online services, Sadeq noted.

“I believe that we must focus more on efawateercom, which is the main online payment platform in Jordan backed by the Central Bank of Jordan in 2014, as there is a huge number of transactions happening on this platform,” he added.