MENA's Huge Internet Promise [Middle East, The (UK)]
(Middle East, The Via Acquire Media NewsEdge) THE INTERNET AND SOCIAL MEDIA ISN'T JUST a by-word in the Arab world for revolution and activism, especially among the younger generation, it's also becoming a source of new entrepreneurial wealth and job creation. Inventions from Morocco to Lebanon, Dubai to Tunisia, have caught the attention of international investors, including a host of multinationals and "angels" from California's Silicon Valley, wwjordan is leading the way, with pioneering government policies that have encouraged start-ups among its talented graduates, which is why it now accounts for more than three-quarters of all the Arabic content on the web.
With roughly two-thirds of the population under the age of 30, the Middle East and North Africa has some of the fastest growing internet penetration rates in the world, analysts report. In the two years to the end of last June, the number of people using social media virtually tripled from 16m to more than 45m, according to researchers at the Dubai School of Government. Yet the real potential remains untapped: only 29% of the Middle East's population used the internet last year, compared with 68% in Europe and 78% in the US. And, although Arabic-speakers constitute 5% of web users, only 2% of the web's content is in a language they can read.
While many regional users are fluent in English, the spread of Arabic-language sites on the internet is rising rapidly, producing a huge new market for both global and regional firms, as well as new start-ups. Add to that the effects of the recent revolutions in Egypt and Tunisia, as well as a growing audience in the Gulf, the Levant and elsewhere in the Arab world that is keen to keep abreast of the latest news and political developments, and you have the possibility of an even greater escalation in internet usage and social media, the analysts add.
One start-up that has already benefited significantly from the regional upheavals is Jordan-based Think Arabia, whose website, Kharabeesh, currently attracts some 20m views a month. With contributions from well-known political cartoonists, web animators and designers, it specialises in animated video content for the Arab world.
"Private enterprise, job creation, youth empowerment are things that I think is what the Arab Spring is all about," comments Fadi Ghandour, the founder of the $70om regional courier, Aramex, who is currently an "angel investor" for new start-ups in the Arab world. "Yes, political freedom and political expression are important but without economic vibrancy, in any country, democracy becomes an empty promise."
The market for e-commerce and the economic growth it can promote is a vital factor in attracting investor interest. While it is still in its infancy, with only about $ubn in annual sales, analysts note that in Europe it has grown to more than $30obn a year, giving some idea of the vast potential that exists in MENA. One Arabic site, /amalan, which sells books in both Arabic and English, now lists more than 9m books available online since it began in 2010. Its success, observers say, is due to its superior customer care and competitive prices compared to a global site like Amazon.
Another site, MarkaVIP, provides hand-delivery and payment systems for customers who, traditionally, are very reluctant to use credit cards online. "There's a lot of consumer demand in Arab markets, so you see online commerce as the first wave of innovation," one of the company's founders. Amer Abulaila, told Bloomberg News in October. MarkaVIP is now planning to expand further in Saudi Arabia, Qatar and the UAE, with one of its prime targets being wealthy Arab women keen to shop for designer goods online, insiders report. Already, it is expecting its annual revenue to reach some $ioom by the end of December 2012.
The appeal of the region to global internet corpo - rates, as well as institutional and individual investors, is one reason why Silicon Valley giants in the US, such as the chairman of Intel, Dr. Craig Barrett; the chairman of Cisco, John Chambers and the chief researcher of Sun Microsystems, John Gage, have participated in the MENA ICT Forum, a regular event sponsored by Jordan's King Abdullah II. In November, several of the Valley's keenest investors were due to fly out to Amman to participate in the latest MENA ICT Forum, as well as in a 'Mix N' Mentor' gathering being arranged by the Jordan-based start-up accelerator, Oasissoo, and the regional start-up news website, Wamda, the brainchild of Ghandour. Visits to other events in Jordan were also scheduled, including the capital's "Tech Tuesday."
Wamda was also planning similar meet-ups in Beirut and Dubai in November, which are due to be followed by another in Cairo next year. Along with the Silicon Valley investors and Oasis 500, the region's start-ups are also winning new funds and technological and marketing assistance from Beirut's Middle East Venture Partners, which this year alone plans to invest in nine new companies in Dubai and Lebanon, as well as in Jordan and elsewhere in the Arab world.
Meanwhile, concern is growing that Jordan's primary role in the region's internet development - and its reputation as the "Silicon Wadi" of the Middle East - could be threatened by a proposed new law that would tighten press and publication restrictions, including websites and social media. Protests throughout the country followed news reports about it, provoking a meeting by the King in November with 22 of the country's biggest names in ICT. "Discussions were candid," one participant reported, adding, on a more positive note, that "it wasn't long before the room was injected with a dose of IT energy and buoyed up by the King's re-affirmed commitment to the sector in spirit and lega) clout." Further discussions are planned, with a view to reaching a decision on the proposal by next March.
Observers now doubt that it will pass in its original form, given the sharply negative impact it could have both on the creation of new start-ups and jobs in the kingdom, but also on Jordan's unrivalled role as the IT hub in the region. Blessed with hundreds of thousands of English-speaking graduates and professionals, many of them Palestinians with influential connections elsewhere in the Arab world, the country has also been luring back expatriates, many of them with investment capitai 0/ their own, who are eager to participate in its rapidly expanding ICT ventures and new possibilities.
"This is the last internet gold rush to be had," Khaldoon Tabaza, the founder and CEO of Amman-based Zad Capital, told Bloomberg. He is building a new holding company for e-commerce start-ups called iMENA.
"Nobody is building for Jordan," adds Emile Cubeisy, the manager of the Badia Impact Fund which provides early-stage finance for Jordanian tech start-ups. "We are a region of 300m people that share one common culture and common language. Yet as markets we are complete disconnected."
That may not last Jong, if Jordan's infectious dynamism in its tech sector - which contributes as much to the country's GDP as tourism - spreads throughout the Middle East and North Africa. In addition to encouraging substantial private and foreign investment, new start-ups in countries such as Egypt, Lebanon, Morocco, Tunisia, the UAE and Saudi Arabia, as well as in Jordan, could provide tens of thousands of jobs for new media content providers -- in film, video, photography, design, animation and journalism - along with marketing specialists, project managers, engineers, software developers and financial advisors. It is an opportunity that many officials in the Arab world, as well as local and international investors, feel they can't afford to miss.
The real potential of the internet remains untapped but that is about to change
IT IS POSSIBLE TO ACCESS INFORMATION, KEEP IN TOUCH WITH FRIENDS, LISTEN TO MUSIC OR READ YOUR FAVOURITE MAGAZINE ONLINE, IN A WAY THAT WOULD NOT HAVE BEEN POSSIBLE ONLY A FEW YEARS AGO
Women are going to play a significant role in boosting internet usage in the region; growth is expected to come from wealthy Arab women keen to shop online for designer goods
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Internet access to all is on offer in various locations, including bars and cafes
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