High time for Jordan’s transformation to regional e-commerce hub, says ACC study

AMMAN — A recent Amman Chamber of Commerce (ACC) study recommended transforming Jordan into an online e-commerce and retail centre to serve the Middle East and North Africa region. 

The study aimed to measure the impact of the transition to e-commerce on Jordan’s trade and services sector by analysing readiness for e-commerce and examining the need for legislation to limit the negative effects of e-commerce on traditional forms of commerce. 

The study surveyed 300 e-commerce consumers of different ages and professions.

In a statement made available to The Jordan Times, the ACC emphasised “the importance of modernising digital infrastructure and improving the e-commerce environment, through the provision of fast Internet connections and safe e-commerce platforms.”

According to a study issued by the United Nations Conference on Trade and Development (UNCTAD), the global volume of e-commerce sales in 2020 was estimated at $27 trillion, in comparison to approximately $788 million in Jordan in the same year.

The study stressed the need to develop and amend existing e-commerce legislation and regulations in the Kingdom, ensuring they are compatible with international standards and protect the rights of both that merchants and consumers. 

The study also emphasised the importance of building advanced technological infrastructure by providing fast and reliable Internet connections and safe online platforms.  

The study also urged adherence to the draft e-sales system proposed by the ACC.

The ACC also stressed the need for customs compliance during inspection, clearance, assessment and taxation processes for goods entering the Kingdom.

The study recommended that the user experience be improved for online shoppers by creating easy-to-navigate websites that clearly showcase purchase options and product details.

There is also a need for merchants to be trained in e-commerce techniques and personal data protection, the study said.

The quantitative portion of the survey revealed that 69 per cent of e-consumers believe that the pandemic has affected traditional shopping. 

The study also indicated that 64 per cent of polled consumers cited saving time as their motivation for shopping online, while 34 per cent noted that e-commerce is less expensive.

The results also indicated that 52 per cent of consumers prefer local goods over foreign ones due to an easier return and exchange process. 

Moreover, 23.5 per cent of surveyed e-consumers reported problems with their online purchases, most commonly in terms of poor material, while 21.5 per cent reported sizing issues.

According to the study, 58 per cent of e-consumers spend an average of less than JD50 per month in online commerce, while 25 per cent spend between JD50 and JD100 per month.

The study also surveyed 300 merchants working in the clothing and footwear sector. Of this sample, 77 per cent attributed declines in clothing and footwear sales due to e-commerce, while 19 per cent believed the drop was due to low purchasing power. Four per cent of respondents attributed the decline to citizens prioritising non-apparel purchases. 

The study also showed that 80 per cent of merchants surveyed cited a lack of expertise as a barrier to entering e-commerce, while 68 per cent cited a lack of necessary technical equipment. Of the retailer sample, 55 per cent said that they believe e-commerce is not necessary. 

The study showed that 85 per cent of merchants are open to organising training courses on e-commerce for purposes of promoting their products.  

“There is a major shift in digitalisation and technology use among retailers. Therefore, now is the time to improve the shopping experience here in Jordan,” economist Waseem Hussein told The Jordan Times.

This study could be regarded as a compass for future initiatives and efforts to improve local e-commerce, Hussein said.

Hani Bani Hani, an e-commerce expert, said that nowadays, e-commerce is “crucial”, especially for businesses that sell physical products. Establishing a study that is focused on e-commerce would bring more attention to this field, he said, noting that Jordan has enough skills and professional expertise to support such efforts.

“All industries should get onboard with e-commerce, which is becoming a necessity that improves customers’ experiences and lowers operating expenses,” he added.

Commenting on the study, economist Husam Ayesh said: “The capabilities and tools for establishing an e-commerce centre, along with the commercial activity, must be present in Jordan” for the transition to be successful.

Investing in e-commerce requires the utilisation of technical capabilities and digital skills present in Jordan, Ayesh added.

Ayesh cited a business environment conducive to commerce, along with adequate regulations and financial capabilities, as necessary components of establishing the infrastructure for Jordan’s transformation to a centre of e-commerce.