MENA 2.0: The Arab Digital Market

April 4th, 2012

A new engine of economic growth is quietly emerging in the Middle East and North Africa (MENA). Demographics, rising purchasing power and a burgeoning private sector are fueling economic development in a region where markets have been fragmented for too long.

Stretching from Morocco to Oman, MENA’s population tops 350 million, making it the world’s ninth largest market. But trade barriers among countries in the region have constrained market growth. Until now.

Today, an emerging trend is disrupting MENA’s traditional market patterns: a growing segment of urbanized, tech-savvy Arab youths is devouring on-line entertainment, gaming and social media, creating demand for digital services that are delivered across borders. Here comes the Arab digital content market.

Despite differences among the region’s mosaic of nations, a shared language and culture give rise to a homogenous market that spans the breadth of the Arab world. The result? Arabic is now the fastest growing language on the web. With over 100 million people between the ages of 15 and 29, many of whom are economically active, the promise of the Arab digital content market is sparking the interest of investors and entrepreneurs.

The popularity of social media in the region was highlighted during the recent Arab uprisings. The news was dominated by stories about how social media was used to mobilize demonstrators, but, in fact, MENA’s youths have been consuming a wide and growing array of digital media.

The precursor to MENA’s digital sector is the successful Arab satellite TV industry — dominated by Qatari-owned Al-Jazeera and Saudi-backed Al-Arabiya. In the last decade, Arab-based TV has matured and expanded, delivering content through several outlets, including the Internet, to audiences around the world.

Like its satellite TV analog, the Arab digital content market’s fundamentals are strong. In addition to its favorable demographics, mentioned above, MENA’s internet usage has already reached 187 million from 10 million only a decade ago (source: TNS MENA). Mobile broadband penetration is rising quickly due to the adoption of LTE standards in the UAE and Saudi Arabia, the region-wide spread of 3G, and an explosion of smartphones and tablets.

As with any emerging sector, there are challenges. Monetizing digital media relies mostly on advertising, which has historically been undervalued in the region. Whether some type of pay model could work in the future is an open question.

MENA 2.0 is still in its infancy, but major international players have already arrived including Yahoo!, which bought Maktoob, a Jordanian portal; Google, which launched in the UAE, Egypt and Saudi Arabia; and Livingsocial, which acquired Dubai-based GoNabit.

One of the more intriguing features of the Arab digital market is the brisk pace of innovative ideas bubbling up from local platform, app, and content developers. For investors and entrepreneurs, the medium to long-term prospects look bright.

MENA 2.0 has the power to transform the region, creating new business opportunities, youth employment and economic growth. It’s an exciting space to watch, and one that’s worth a closer look by anyone interested in what’s coming next.




MENA refers to the following countries in the Middle East and North Africa: Algeria, Bahrain, Egypt, Iraq, Jordan, KSA, Kuwait, Lebanon, Libya, Morocco, Oman, Palestine, Qatar, Sudan, Syria, Tunisia, UAE and Yemen.

Regional macroeconomic data from the IMF’s World Economic Outlook report and the World Bank’s MENA resources.

Want more info on this subject?

Arab Net, a conference for MENA’s digital services sector. More on Arab Net from All Things D.

Vali Nasr’s ’09 book, Forces of Fortune – The Rise of the New Muslim Middle Class and What It Will Mean for Our World.







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