Online Shopping: A Glimpse Into the Iraqi Customer's Shopping Behavior

The World Trade Organization (WTO) defines e-commerce as “the production, distribution, marketing, sales or delivery of goods and services by electronic means.” Currently, 75% of the Iraqi population has access to the internet, and 61.4% of them are on social media platforms. The internet made it easier to communicate with retailers, anytime and anywhere. This led retailers to adapt to the continuously changing needs of the Iraqi customer that shifted from being limited by few items at certain shops to a variety of brands that are not limited by Iraq’s borders. Retailers are putting more effort into ‘reading the mind’ of their customers to keep up with the rapidly changing shopping landscape.

With the outbreak of the COVID-19 pandemic, online shopping became a safer, more convenient way to purchase items, and at times, the only means of purchasing needs as lockdowns were implemented. Online shopping activities increased alongside the global increase in COVID cases, as the restrictive measures hindered the in-store shopping process. Therefore, many brick-and-mortar retailers were forced to enter the online retail scene and work out a way to reach their quarantined customers. This has further driven the e-commerce scene to evolve in order to meet the needs of customers, which was coupled with the launch of various e-payment methods.

This research is aimed at discovering the ‘path to purchase’ among Iraqi consumers. The path to purchase is a traditional shopping concept, which has evolved significantly due to the internet, digital innovation, and the subsequent rise of online shopping. It mainly consists of four stages; awareness of a product, considering a product by researching it online, conversion (which is deciding upon where and when to buy a product), and finally, the fourth stage being the evaluation after fulfilling the purchase.  In this research, respondents were asked to describe what best fits their behavior when considering purchasing an item, what drives them to purchase online or in a brick-and-mortar store, and the factors that influence their decision-making process during their most recent transaction at each of the four stages.

Consumers undergo changes in their shopping behavior with each purchase, and businesses need to take these changes into account by becoming more flexible when targeting their audience. One of the most important factors that keep changing in the online shopping landscape is age. According to the responses of our online survey, it appears that around 61.43% and 25.08% of respondents make up the 20-29 and 30-39 year old cohorts, respectively, revealing that millennials (individuals born between 1982-1996) and Generation Z (individuals born between 1997-2012) are taking up the majority of the online consumer population in Iraq. However, most respondents to our survey were females (68.1%), which did not affect the equal contribution of both genders when divided based on age groups.  

The Iraqi e-commerce market is proliferating, with expected revenue of 3.815 billion US dollars in 2021 and a projected market volume of 5.6 billion US dollars by 2025 (Statista, 2021). Most of our respondents (61.2%) said they had placed at least one order in the past three months, and 23.4% said they had placed 4-6 orders in the same timeframe. When doing a gender-based subanalysis, we found a significant difference between men and women who placed 1-3 orders in the past three months. more men placed 1-3 orders than women (72.22% vs. 56.1%). 

The global consumer report showed that, on average, men tend to spend more per purchase than women ($220 vs $151), despite their similar frequencies, as stated in KPMG’s 2017 report “The Truth About the Online Consumer”. In our sample, the majority of men had a lower order frequency than women but they tend to spend more than women as evidenced by the difference in the $701 and above groups. This information could indicate that the items purchased by men tend to be of higher value, such as electronics, whereas women tend to spend their money on lower value items such as clothing and cosmetics, as can be seen in later results.

In this section we inquired about where respondents preferred to shop, the means they used for searching products, the frequency of smartphone usage specifically, and for what reason.

Retailers with a physical store presence have the upper hand when it comes to first purchase, as 50% of shoppers prefer buying through a retailer than a marketplace (Shopper-First Retailing, 2018). When asked where items were purchased, the majority of respondents (42.49%) said they made their purchases from retailers having a brick-and-mortar store as well as an online shop, while around 34% said they ordered from retailers exclusively on social media (i.e. having no brick-and-mortar store). 

When asked specifically about using smartphones to search online for a product they found in a brick-and-mortar store, the answers illustrated that the majority of respondents do, in fact, use their smartphones to search for a product online, albeit they vary in frequency. The largest percentage answered "sometimes" (34.13%), with an overall view of men using their phones while shopping more than women. 

The average Iraqi spends 60,000 IQD of their monthly income on clothing and footwear as previously reported in KAPITA’s Overview on the Expenditure of the Iraqi Household. Overall, women-related products were the most common items chosen, with 83.12%  buying women’s clothes, and 61.12% purchasing skincare products and cosmetics. Further analysis showed that the top three items purchased by women were: women’s clothes (66.20%), cosmetics and skincare (49.18%), and women’s shoes (31.93%). Whereas the top three purchased items by men were: electronics and computers (42.79%), men’s clothes (29.85%), and men’s shoes (19.40%).

The purchasing journey consists of four stages; awareness of a product, considering purchasing the product, making a purchasing decision, and providing feedback on the product, all of which we expanded upon in our full research. Regarding Iraqi buyers’ awareness of a product, online advertisements, the seller’s online page, and social media platforms were the three most prevalent means for sellers to spread awareness regarding a project. Respondents have agreed that talking to a friend (35.1%), or family member (18.3%), or seeing a friend own the product (10.2%) gets them acquainted with products, thus perhaps interested in purchasing them. 

After getting acquainted with a product, 64% of respondents said that they searched for online reviews of products, 40% of our respondents said that they discussed the product with a friend or a family member, while 38% said they visited the manufacturer’s website. When sub-analyzing by gender, we found women (46.39%) more in favor of chatting with friends/family and men more in favor of checking the company’s website (50.75%). 

Getting the best price for an item is the most determining factor for 51.27% of our respondents, followed by website preference (11.59%), and having the best delivery service (10.32%). The return policy was very important to 8% of our respondents. A convenient delivery service (11.19%) was a shared third reason in both men and women for choosing a specific retailer. Especially after the COVID pandemic, delivery of products increased in importance, alongside product availability. Based on the future shopper report, the average waiting period for a delivery to arrive is 2.61 days. Younger generations are more likely to care about faster delivery and would prefer a same-day delivery. Older generations however stated “free delivery” as a preference. 

The introduction of the internet had a major influence on the reshaping of the shopping experience. The conversion from purely in-store shopping to a combination of in-store and online shopping has opened room for discovering the habits of shoppers and their preferences. With our respondents, the convenience of an online shopping experience, along with the 24/7 availability have been the main driving factors for going online. In-store shopping still appeals to consumers as most respondents still feel the need to check the products themselves and interact with the seller to verify authenticity, in addition to delivery and return policy concerns and inconveniences. 

Overall, the Iraqi consumer fits the global profile of an online shopper in many aspects. Moreover, the Iraqi online shopper is still on a learning curve as the Iraqi market is still nascent, and in need of better infrastructure to support online shopping.