Sunday, August 23, 2009

Kuwait's online market flourishing

KUWAIT: Twenty years ago, it was inconceivable that one could make money without owning a shop or a company selling products. The Internet revolution, however, has transformed this state of affairs and introduced a new flavor to retail.

The Internet is becoming more prevalent and connection costs are falling, while broadband speeds are accelerating and computers themselves are becoming more compact and cheaper by the day; this brings more and more costumers to the virtual reality, and has turned the contemporary dot com industries into the most promising, attractive and profitable businesses in the world.

Kuwait is no exception. The online services offered in the country range from paying your mobile bill or traffic fines, to ordering food, buying groceries, finding a job or browsing for a new car. In fact, many people in Kuwait make a living exclusively online, and many small websites that started with just a simple idea, with few people working on them, have turned into major enterprises, with a net value of hundreds of thousands of Kuwaiti Dinars, like, and others.

Although Kuwait's population, including expatriates, does not exceed three million, it still occupies a leading position among the Arab world internet users' index, coming second after the UAE with approximately 900,000 users, meaning that 34.7% of the whole population in 2008 were online, compared to only 5.8% of the population in the year 2000. (what is the index, who commissions it and where does Kuwait stand in terms of penetration on it?)

The user growth increase of a staggering 423.3% in the period between 2000 and 2008 is not expected to witness a slowdown any time soon, according to internet world statisticians' estimates. And this, of course, means yet more opportunities for Kuwait's online businesses.

Jassem Al-Enezi, the sales manager of the website, told the Kuwait Times, "When we started in the year 2000, we were just three engineers with an idea to make it easy for people to sell or buy a car, without having to physically travel to all the used cars agencies or car market, and that's what we did; we've now been in the market for nine years and we've achieved the milestone of 20,000 visitors a day...we are considering expanding our business to KSA.

Dot com biz and fast revenue
Al-Enezi explained why the dot com business is sometimes considered a tough venue. "Some people just don't have the patience to pursue internet business. Most of them want fast revenue and that's why we see a lot of people trading on the stock market. Internet business can be very profitable, but it needs patience and determination. You can't just expect to make an income with the launching of the website, you need to plan for a long-term investment in your website and you need to expect not to make any pr
ofits, at least for the first year.

Al-Enezi has some advice for beginners in the online market. "The idea is the most important thing when it comes to opening an online business. If you come up with a new idea that can really help online users in their daily life, and pursue it all the way, then it's more likely to be successful. The second thing is the website should constantly be updated, enhanced and maintained. Then again, you have to be patient to establish a name and reputation and only then can you enjoy the outcome".

A UAE-based online recruitment company, also dubbed one of the biggest online recruitment companies in the Middle East, has been operating in the Kuwaiti market since 2001. It offers another example of how online business can prosper in this part of the world. According to the company's managing director in Kuwait, when they started the business in 2001 the internet market in Kuwait wasn't as big as in the UAE. "So, we opened the first headquarter in UAE, and the second branch here in Kuwait, he recalls.

The idea started with a group of people who wanted to find employees for one company, and it was difficult to reach out to people, so they wanted to create an online employment market," he says, adding that in the first month alone they gathered some 6,000 CVs on their database. "That encouraged the team to pursue their idea further," he added. "Now, thank God, we have about 3.5 million CVs".

The manager also explained the steps of establishing an online business. "The time you take from launching the business to making money online differs according to the place you are competing in. Kuwait, for example, is a very educated market, and that can be very helpful when it comes to how easy it is to really be known as an online business.

Click and earn
At the time when so many companies are offering services online for their clients, many websites don't offer any kind of tangible services, or sellable products, and the only source of income for this kind of online businesses is in advertising. The system is simple: Website owner A places a banner or a link on his web pages, which promotes the product or products of advertiser B, and every time a visitor to A's website clicks on the advertising banner and moves to the advertiser's homepage, B pays A a sma
ll amount of money.

The online advertising business is an industry worth $45 billion worldwide annually, with this figure, according to a 2008 report, expected to reach over $147 billion by 2012. Dart Media is one of the Kuwaiti online marketing companies that are active in this field.

Salim Hatoum, Dart Media's General Manager, told the Kuwait Times "the internet is a lifestyle," asserting that pretty much everything can now be done online.
Many people connect online daily, and there are many positive sides to e-marketing," Hatoum explained, arguing that with e-marketing it only takes one click to bring the client to your site. "Advertising campaigns usually last a month and the banners can be case-specific when it comes to language," he says, providing the following example: "You can have your English banners forwarded to the English version of your website and the Arabic banners to the Arabic version. Also, you can actually discover how ma
ny people clicked on your banners, so you can assess which advertisements are working better for you.

Hatoum claims that there's a strong demand for internet marketing in Kuwait. "Advertisers know that very well. Since 2006 until today, the expenditure on internet advertisements has grown by 300 percent and that just indicates the amount of awareness here about the importance of internet marketing.

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