How COVID-19 Accelerates the Middle East to Digital Supply Chains

The COVID-19 pandemic has seriously affected Middle East business operations, leading to a massive drop in revenues and supply chain disruptions for the energy and non-energy industries. International strict lockdowns suppress global production and logistics capacity, which exacerbate bottlenecks in supply chain networks. Middle Eastern businesses are aware of the need to transform their end-to-end supply chain management by investing heavily in technology.

Digital Transformation as a Long-Term Trend

The Middle East is moving toward incorporating digital into businesses and supply chains to improve data accuracy and transparency, advance supply chain efficiencies, and minimize risks and loss.

In recent years, major energy companies have started going digital, given the pandemic e of supply and demand shocks. Saudi Aramco, the Saudi Arabian oil company, established a joint venture with Cognite to enable digital transformation opportunities in Saudi Arabia.

Through this partnership, Aramco and Cognite intend to create advanced holistic digital software solutions to escalate local content eventually, boost GDP growth, create more job opportunities, and precipitate the development of digital talent and digital sustainability.

So far, most Middle East companies are increasingly investing in artificial intelligence (AI) and digital technologies for a more resilient supply chain and higher productivity.

The coronavirus outbreak has brought a change in consumer behavior; this is shown by almost 80% of Saudi Arabia, and the United Arab Emirates are shifting to online shopping.

The rapid shift forced companies to keep up with the evolving consumer demand to ensure on-time delivery and meet customer satisfaction. Thus, businesses prime concern nowadays is strengthening their supply chain investments.

Digital Supply Chain as a Better E-Commerce Solution

Before the COVID-19 pandemic, e-commerce showed a considerable performance in the region, with 32% of Middle Eastern people choosing online purchases in 2017.

In pandemic lockdowns, nearly 73% of consumers in the area are shopping online. This trend demonstrates that Middle Eastern countries are ready to ride the e-commerce wave. 

Transforming the supply chain towards digitalization requires significant investments that enable retailers to establish suitable warehousing facilities and manage e-commerce needs and last-mile delivery services.

This is where high-tech developments such as AI-based technologies, robotics, and the internet of things (IoT) play significant functions to advance e-commerce further.

For instance, Aramex, a Dubai-based logistics company, has shown its successful take on digitizing its shipment process and higher accuracy and transparency in goods delivery. 

It is no doubt that the COVID-19 pandemic has challenged societies and economies around the world, especially the Middle East. Still, it has also created an opportunity for growth, innovation, and diversification.

The region presents attractive investment opportunities as Middle Eastern countries and companies are in the direction of a more efficient, digitized, diversified, and reliable supply chain environment.