Facebook, Instagram, TikTok revenue to skyrocket as social media spending surges to $10bn in 5 years: Report

MENA retailers, however, should shift their focus towards Gen Z and millennials, as these demographics tend to be impulse purchasers and are heavily influenced by social media players, says new research

Social media platforms across the Middle East and North Africa (MENA) region are projected to mop up a whopping $10 billion in additional revenue over the next five-year period, as shopping is going increasingly social in the region, emulating the trend in surge in social commerce in countries like China and some of the Southeast Asian countries, a latest research said.

The growing sharp shift in consumer behavior and spending habits are cited as the major drivers of this anticipated surge in social media spending by retail chains and corporate, which is currently estimated at $3 billion.

“With their large user base and increasing time spent, social media platforms are fast emerging as the preferred influential channels for retail purchase decisions [in MENA], the research by the Middle East arm of RedSeer Strategy Consultants, a specialised global consultancy for digital sectors, said.

RedSeer said social media channels already wield significant influence, driving over 30 percent of purchases in the thriving $400 billion MENA retail market.

“The rising social commerce market will create over $10 billion additional revenue opportunity for social media players in the region [over the next five-year period],” the study said.

Spike in social commerce and live streaming

The study also revealed that alternate models such as live streaming have started to take the timeshare of consumers, as the time spent on social media is reaching a threshold.

“The influence of social media on purchase decisions is already very high at 30 percent and it will be difficult to increase this further in the light of the new channel emerging. Hence, $10 billion is the additional revenue opportunity for social media in the future in MENA,” RedSeer said.

The corresponding retail spend that can go through the social media platforms is much higher at $120 billion, it said.

The total advertising market in MENA is currently estimated at $7 billion, of which digital advertisement accounts for about $5.5 billion.

Aref Yehia, Head of Business Partnerships for retail and e-commerce MENA at TikTok, however, said they are not anticipating any slowdown in the surge in MENA ad spending across platforms.

“In fact, there is a continuous rise of both user base and engagement for TikTok, which played a fundamental role in augmenting the surge, as the platform continues to inspire creativity and bringing joy, making it a safe and effective place for advertisers to showcase their brands,” Yehia told Arabian Business.

“Our partnerships team’s efforts are focused on enabling advertisers to reach their business objectives via leveraging our business solutions, such as Video Shopping Ads, which leverage the platform’s native format to deliver strong performance results for the e-commerce sector,” said Yehia, who is also in-charge of Global Business Solutions at TikTok.

Social media emerges as the largest technological disruption in MENA

Industry experts said social media has been the largest technological disruption that the retail sector has seen over the last decade.

“It [social media] has already impacted the way we spend our time, interact with society and also discover products. Now, it is using its influence on search and discovery to close the sale also,” Sandeep Ganediwalla, managing partner of RedSeer Strategy Consultants – Middle East, told Arabian Business.

“This opens new avenues for brands to directly interact with their consumers and control the end-to-end experience with the consumers. It also enables social media companies to capture a larger share of the value chain – something that is critical as time spent on the social media channels is reaching maturity levels,” Ganediwalla said.

The study showed the time spent on social media surpassed 2 hours, triggering a substantial increase in ad spending on social channels.

This can grow further with the increase in internet and smartphone penetration, it said.

The RedSeer study also said social commerce has proven to be a resounding success in countries like Vietnam, China, and Indonesia.

“These countries have embraced the fusion of social media and e-commerce, allowing consumers to make seamless purchases directly through their favourite social platforms,” it said.

“MENA retailers, however, should shift their focus towards Gen Z and millennials, as these demographics tend to be impulse purchasers and are heavily influenced by social media players,” RedSeer said.

“To strengthen their position, retailers can also take initiatives such as collaborating with content creators, hosting live e-commerce events, and implementing AI for enhanced customer support,” it said, adding that these efforts will not only boost engagement but also help capitalise on the increasing trend of social media-driven consumer behavior in the region.