The rapid advancement in the field of internet and information technology has completely changed the dynamics of the global classifieds market. Once considered to be the biggest source of revenues for the print industry, classifieds are increasingly transitioning into the digital medium. Online classifieds are becoming popular all over the world, as they provide wider exposure and visibility than print classifieds.
The global online classifieds market is estimated to be worth US$ 15 Bn. The U.S. has the largest share in the online classifieds market, and it is pegged at US$ 4 Bn. The online classifieds market in the Middle East has witnessed steady growth since 2010 on account of numerous start-ups by both local and expat entrepreneurs, and it is expected that the market will continue to grow steadily through 2020. Increasing internet penetration and growing sales of smartphones are expected to boost the online classifieds market in the Middle East.
Increase in Internet Usage & Growing Sales of Smartphones Will Boost Online Classifieds Market
The online classifieds market in the Middle East is expected to grow steadily through 2020 on account of increased internet penetration and growing sales of smartphones. An estimated 40% of the total population in the Middle East has access to the internet and by 2020, the figure is expected to reach 60%. Higher internet penetration is expected to be a key driving factor for the growth of online classifieds market in the Middle East.
The internet penetration rate is higher in Israel and GCC countries than other Middle East countries. In Egypt, Iran, Iraq, Yemen, and Syria — countries with the largest population in the Middle East — the internet penetration is low, but the actual number of internet users is high. It is expected that by 2020, the internet penetration will increase in these countries, and this will provide a much-required boost to the growth of the online classifieds market.
The GCC countries have some of the highest smartphone penetration rates in the world and this trend is expected to continue through 2020. Furthermore, the Middle East has a substantial young population and the demand from this section is fuelling the growth of smartphone market across the region. It is expected that the smartphone market will continue to expand at a high CAGR across the entire Middle East region through 2020 on account of demand from young population and economic mobility of the large expatriate workforce. The projected growth in the sales of smartphones is expected to be a key driver for the prospects of online classifieds market in the Middle East.
The key challenges for this market include low awareness among buyers and sellers, and lack of stable internet speeds. Many traditional buyers and sellers have low awareness about the advantages of advertising through the online medium, and print advertising is still their preferred option. Furthermore, 3G speeds are not available in many regions across the Middle East and the slow internet speeds make it tedious to post or view an advertisement.
Online Classifieds Market in the Middle East: Market Segmentation
The online classifieds market in the Middle East is segmented into real estate, automobiles, recruitment, electronics, and miscellaneous. Real estate is the most dominant sector and it is expected to remain so through 2020. The construction boom and the search for affordable housing from the large expatriate working class in the Middle East is expected to boost the prospects of this segment.
Automobile, another dominant segment of the Middle East online classifieds market, is also expected to grow steadily through 2020. The demand for used cars will likely fuel the growth of this segment. The electronics segment is also anticipated to register a steady growth on account of demand for used smartphones, television sets, and home appliances.
Miscellaneous segment, which includes products such as home furniture, books, beauty and fashion, is also expected to grow on account of demand from foreign workers in the Middle East. Most of the workers in the Middle East hold low-paying jobs and look for cheap, used products. The growth of the miscellaneous segment is expected to further boost the online classifieds market in the Middle East.
Opensooq.com, Dubizzle.com, OLX.ae, Locanto.ae, Dubaiclassified.com, sa.eharaj.com, qatardunia.com, muscatads.com, and Yad2.co.il are the key players in the online classifieds market in the Middle East.
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