This is Part 1 in a 2-part series. Find Part 2 here.
On the evening of Sunday, June 5, the crescent moon rose into view, heralding the beginning of Ramadan. This sacred month-long celebration for Muslims worldwide will conclude on the evening of July 5.
The month is renowned for its celebrants' fasting, prayer and charitable giving. What's less known, however, is that e-commerce skyrockets among many Muslim consumers during Ramadan.
E-retailers and other globally-expanding businesses—especially those based in the West—can’t afford to ignore predominately-Muslim markets in the Middle East and North Africa (MENA) and Asia any more. Internet and smartphone penetration is growing, and consumers here are spending more time and money than ever online.
Indeed, reports suggest online shopping has increased in MENA by more than 1,500% over the past decade. The e-commerce market is now worth more than $7 billion; the United Arab Emirates, Saudi Arabia and Egypt account for much of this e-commerce activity.
Yet even in Iran, where sanctions severely restricted consumption and commerce for years, nearly 40% of consumers now shop online at least once a month. (Nearly 20% shop online once a week.)
Younger consumers are driving e-commerce in the region; consumers aged 26 to 35 are more likely to buy online than any other age group. In Egypt, this segment represents a whopping 50% of all online shoppers.
Ramadan generates more online sales in MENA (and other predominately-Muslim markets) than ever before. But what is it?
Ramadan is the ninth month of the Hijri, or Islamic, calendar. Ramadan can last between 29 and 30 days, depending on the year. Most of the world's 1.7 billion Muslims celebrate by fasting, contemplating, praying and giving to charity.
This is the year’s holiest month for Muslims. It commemorates “the descent of the word of God, the Quran, from heaven to the earth,” an Islamic studies professor recently told The New York Times. “During Ramadan, the gates of heaven are open wider than ever. Just as the word of God has come down, the word of supplicants goes up to God, more efficaciously than any other time.”
Muslims fast from sunrise to sunset during Ramadan. As the month comes to an end, Muslims celebrate a multi-day holiday called Eid al-Fitr, which literally means "the festival of fast-breaking." Here, friends and loved ones visit each other, exchange gifts and socialize. (The length of the celebration varies between countries; some regions can celebrate for up to 10 days.)
Online Spending Increases
Interestingly, online spending increases in traditionally-Muslim countries during Ramadan. Websites see surges in traffic, engagement and sales during Eid al-Fitr, too.
As Internet access continues to grow and thrive in these markets—particularly in “mobile-first” markets, where smartphones are consumers’ primary means of accessing the web—savvy retailers are offering compelling online promotions during Ramadan. Some offer discounts of up to 80%, according to The Wall Street Journal.
It’s a play that’s paying off. In the United Arab Emirates, online sales surge by as much as 40% during the holy month. Egyptian consumers—nearly 55%, according to one study—shop online during Ramadan, and buy more than any other month of the year.
A more recent study revealed that Indonesian Muslims (who comprise nearly 90% of the country’s population) made more online retail purchases during Ramadan than any other month of the year. Clothing retailers saw spikes in traffic of nearly 30% and 20%, in the categories of Muslim wear and sports respectively, by offering Ramadan-centric promotions.
These customers bought more items, too. One sports fashion retailer saw average order size increase by nearly 70%.
It's clear that companies that smartly engage Ramadan celebrants online can win big. But what are the smartest ways e-retailers and other industries can reach these customers? We spoke to Omar El Ali, a Global Online Strategist for MotionPoint's Global Growth team, about the topic.
Tip #1: Talk the Talk
Omar's first piece of advice? If your organization is targeting consumers in predominantly-Muslim countries-where residents overwhelmingly speak Arabic as their first language-it should have a website published in Arabic to serve them.
“This site should support local currencies and locally-preferred payment platforms, too,” he says.
Tip #2: Launch a Pre-Ramadan Campaign
Timing online campaigns and promotions to Ramadan, particularly before it begins, can help create an emotional connection with these consumers, Omar says. It illustrates that your company appreciates their culture.
This attention and engagement works wonders, Omar says. Many Western companies overlook this simple, but resonant, opportunity to connect with consumers in MENA and beyond.
"Congratulating local customers on the upcoming holy month is positive, authentic marketing," he explains. "You're creating a genuine emotional connection. And promising special offers in the weeks ahead will proactively inform their buying decisions, too."
Ideally, brands should launch their Ramadan campaigns about two weeks before the month begins. This will be especially effective, Omar says, if your company sells home essentials that celebrants purchase ahead of time.
Case in point: One MotionPoint client, a furniture and home goods retailer, saw site-wide traffic increase in the month leading up to Ramadan from MENA-based consumers. "They were looking for the latest deals and offers ahead of time," Omar says. "And thanks to the right pre-Ramadan promotions in place, they found them."
Tip #3: Launch a Ramadan Campaign
During Ramadan itself, consumers tend to buy items for personal use, and for Eid al-Fitr gifts. These purchases usually include clothes and jewelry. "It's tradition for people to wear the brightest and latest during the celebration," Omar says.
Launching a campaign during Ramadan capitalizes on cultural traditions and consumer behavior. Interestingly, campaigns need not promote special offers or discounts, Omar says-they can simply showcase the latest clothing lines or the trendiest jewelry designs.
We recently examined Arabic and English website analytics for one of our fashion e-retail clients, taken during last year's Ramadan. This retailer serves consumers in Qatar, Kuwait and the U.A.E. "The results were astonishing," Omar says:
- Revenue increased between 41% and 43%, depending on the market, when compared to the previous month
- Transactions increased between 30% and 44%
- Average order value rose between 2% and 10%
- Conversion rates soared 29% to 31%
These dramatic lifts in performance highlight the opportunity to launch Ramadan-centric campaigns during the holy month. MotionPoint's exclusive Market Management technology provides an elegant and effective way for companies to launch such campaigns, Omar says.
"When complemented with important events on the local calendar like Ramadan," he says, "companies can manage campaigns in the markets they're targeting. Our highly-diverse team provides local market knowledge, and concepts to facilitate interactions between companies and consumers."
Stay tuned: we have more Ramadan-related insights to share-including the importance of leveraging social media during the holy month, and how to time your marketing outreach for maximum engagement and results. You'll discover this, and much more, in the second part of our blog series.
Part 2 will drop later this week!