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The CIO challenges brought by e-commerce in Kuwait

E-commerce is growing fast in Kuwait, resulting in new challenges for CIOs in the retail sector

For better or for worse, the mall culture in Kuwait has prevented growth in online shopping for the past two decades. After all, it’s always nice to go out and see people, especially in a warm climate with beautiful shops.  

But people couldn’t go out much during the pandemic, so many of them began to dabble in online shopping. Some of the habits developed during lockdowns seem to have taken hold. According to industry analysts and IT directors in the region, mall shopping seems to be giving way to e-commerce – at least to some extent.

Research firm MordorIntelligence predicts e-commerce will grow in Kuwait by more than 14% a year between 2022 and 2027, with retailers expanding their business to meet growing demand for online shopping.  

To find out more, Computer Weekly caught up with Wafi Mohtaseb, CIO at Ali Abdulwahab Al Mutawa Commercial Group (AAW). Reporting to the deputy CEO, Mohtaseb leads the IT and e-commerce departments, developing and implementing the organisation’s digital strategy and digital transformation journey.  

In its 80 years of existence, AAW has grown to more than 1,500 employees. The company began its journey into e-commerce during the pandemic and now has high ambitions for growth in online sales. 

Local versus international

“Our business has expanded to include 11 e-commerce websites across four main business lines,” says Mohtaseb. “That includes sports, fashion, furniture, pharmacies and outdoor. Our operations are limited to Kuwait, and while we cannot compare ourselves to Amazon in the Middle East, we have ambitious plans to expand our reach across the region.” 

The company uses Magneto as its platform for e-commerce. The India-based platform developer has already sold to more than 250 e-commerce stores in Kuwait. The market is growing in the Gulf states, and suppliers know that local companies depend on them for expertise.  

According to Magneto, “31% of e-commerce stores in Kuwait closed within three years of launch because they failed to meet revenue targets or employed the wrong development partners”. 

But despite the challenges, many retailers are moving forward with online sales. According to Statista, retailers are developing multichannel strategies to meet rapidly growing consumer expectations. For their online shopping, customers want more convenience. They want mobile-optimised search, and they want more product customisation, quick and intuitive checkout, and hassle-free delivery. 

Statista says that in developed countries, the market is in its maturity phase, with extremely high competition among e-commerce players. Major players, such as Amazon and AliExpress, are doing very well, while standalone retailers are having a hard time staying afloat. With a sharp decrease in brand and store loyalty, and a high rate of online cart abandonment, local players around the world are struggling to keep up with big companies that have been doing e-commerce for a long time now. 

In Kuwait, mall shoppers who are now ready to buy at least some products online can choose between shopping with the major international players and the local brands. In a country where well over two-thirds of the population are immigrants, most people have no problem shopping internationally. 

Technical talent in demand

With Kuwaiti shoppers warming to the idea of buying online, the biggest challenge faced by local retailers is recruiting engineers to build and maintain the infrastructure needed for online sales. A variety of skills is needed. Engineers are needed to tailor e-commerce modules to the specific business. User interface expertise is needed to keep consumers interested. Skills in data privacy and online security are also essential. 

“Overall, while Kuwait may face security threats like any other country, it is generally considered safe and secure,” says Mohtaseb. “However, it is always recommended to stay updated on the latest security developments and guidance provided by official sources and take necessary precautions to ensure personal safety and security.” 

Platform developers, such as Magneto, can deliver the building blocks and provide advice. But in the end, every retailer needs salaried professionals who know both e-commerce and at least something about the company’s market. Skilled and loyal staff are needed to tailor e-commerce technologies to business strategies – and to make appropriate changes as the business evolves. 

“Recruiting skilled IT professionals in Kuwait can be a significant challenge, particularly since the Covid-19 pandemic,” says Mohtaseb. “The demand for IT resources has increased significantly, making it even more difficult to find suitable candidates. As a result, organisations in Kuwait are struggling to find skilled and experienced IT professionals who can meet their business needs. This talent shortage can impact the organisation’s ability to innovate and compete in today’s digital economy.” 

It’s a jobseeker’s market for the time being, with significant demand for junior and mid-level positions in software development and support. With the increasing digitisation of businesses and the growth of the IT industry in Kuwait, there is a persistent shortage of skilled IT professionals at the entry and mid-levels. 

“The job market for executive-level positions like CIOs is quite the opposite,” adds Mohtaseb. “There is a limited number of executive-level IT positions in Kuwait, and the competition for them is typically high. Additionally, many organisations in Kuwait may prefer to hire local candidates who are familiar with the local business environment, culture and regulations.” 

While some IT leaders struggle to find positions in Kuwait, those in the retail sector who have had time to develop a good understanding of the business can expect to ride the wave of e-commerce in Kuwait for the next several years. The emphasis now is on developing solid partnerships with platform providers and recruiting a loyal staff of skilled professionals. 

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