- 05
- Dec.
- 2024
E-commerce is experiencing significant growth in Lebanon, as confirmed by current statistics and projections through 2029.
The sector shows significant growth potential, however, realizing this requires enhancements to logistical infrastructure and improvements to the regulatory framework.
According to Statista Market Insight, Lebanon’s e-commerce market is expected to reach $1.311 billion in revenue in 2024, with an average annual growth rate (CAGR) of 8.88% projected between 2024 and 2029. This would push the market to an estimated $2.006 billion by 2029.
By that year, Lebanon is anticipated to have 1.243 million e-commerce users. The user penetration rate was 20.9% in 2024 and is expected to rise to 26.6% by 2029, with an average revenue per user (ARPU) of $1,323.
According to the same source, from early 2024 to October, Lebanese online shopping primarily focused on electronic products, followed by fashion items, beverages, food products, and beauty and personal care items.
Challenges before and after the war
Although Lebanon's e-commerce sector holds substantial promise, it faces numerous formidable challenges. Among the most pressing issues are insufficient logistical infrastructure, the lack of integrated e-commerce platforms, high programming expenses, and a general lack of consumer trust exacerbated by the proliferation of fraudulent online stores and weak governmental regulation. As a result, many consumers are frustrated by discrepancies between products shown online and those actually delivered, with some retailers refusing returns or refunds. In the absence of effective state oversight, consumers have no choice but to turn to e-commerce platforms deemed “reliable”, those that have been established for some time, have a strong reputation, and have demonstrated their ability to inspire trust and respond effectively to their customers’ needs.
The situation has been further complicated by successive crises, including the ongoing economic crisis and the recent conflict between Hezbollah and Israel. These events have intensified transportation difficulties, restricted access to affected areas, and increased the risk of inventory loss. Additionally, the potential for damage to packages during shipping has become a major concern, with online sellers typically shouldering the cost of such incidents.
Cash on delivery payments
Despite the numerous challenges, e-commerce continues to be an appealing option for many Lebanese due to its “practicality.” For online sellers, it has provided an opportunity to turn crisis into opportunity, enabling the creation of small businesses at much lower costs than those required to open a physical store. Additionally, the rise of cash on delivery services has solidified the sector's role in supporting Lebanon’s economy, which unfortunately has become cash-based, with most transactions conducted in physical currency.
The rise of e-commerce culture
The growth of e-commerce culture is attributed to global economic crises, the COVID-19 pandemic, and the significant expansion of social media in recent years. Consequently, many businesses now rely heavily on online sales, leveraging the ease of targeted advertising and the vast number of users across social media platforms to reach potential customers.
Ultimately, optimizing profitability remains a significant challenge. Despite the growth in online sales, many businesses struggle to achieve their profit targets due to increased competition and economic pressures. This drives retailers to innovate their customer loyalty strategies and enhance their omnichannel logistics to better meet market demands.
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