Market Trends of Iraq Freight & Logistics Industry
This section covers the major market trends shaping the Iraq Freight & Logistics Market according to our research experts:
Expanding e-commerce industry drives logistics market
Iraq's e-commerce sector has grown rapidly in recent years. The industry has evolved from a niche dominated by technologically savvy individuals to a mainstream service for the average Iraqi consumer. According to a Think Bank Iraq survey, 57% of Iraqi internet users shopped online at least once. This has increased interest from Iraqi industry leaders and investors, with e-commerce platforms such as Miswag securing millions in funding rounds and Orisdi securing funding and partnership deals with Iraq's largest private TV network, Al Sharqiya. As Iraqi entrepreneurs and visionaries push the boundaries and bring new ideas and innovation to the country, e-commerce services can be expected to play a more significant role in Iraq's retail and logistics sectors.
The World Trade Organization (WTO) defines e-commerce as "the electronic production, distribution, marketing, sales, or delivery of goods and services." In 2021, 75% of the Iraqi population had internet access, and 61.4% used social media platforms. The internet made it possible to communicate with retailers from any location and at any time. This created a demand for retailers to adapt to the constantly changing needs of the Iraqi customer, who went from being limited to a few items at specific shops to a variety of brands not limited by Iraq's borders.
The Iraqi e-commerce market is expanding, with an expected revenue of USD 3.815 billion in 2021, as per Statista. This study aims to discover the 'path to purchase among Iraqi consumers, from product discovery to online search, to ordering and providing feedback. According to industry experts, more than three-quarters (79.35%) of respondents have shopped online in the last three months, with 61.22% placing 1-3 orders and spend between USD 50 and USD 100. When it comes to Iraqis shopping online, such figures show high demand and promising prospects.
Availability of infrastructure attracting investments to support logistics in Iraq
China's Belt and Road Initiative (BRI), launched in 2013, is divided into two parts: the "Silk Road Economic Belt" (SREB), which connects Central Asia, Iran, Turkey, and eventually Europe, and the "Maritime Silk Road" (MSR), which begins in the South China Sea and extends through the Malacca Strait, the Indian Ocean, the Red Sea, and the Mediterranean Sea. BRI policy goals include improving communication between governments, implementing hard and soft infrastructure, strengthening cultural ties through academic exchanges, tourism, and other activities, and promoting regional cooperation and integration. Hard infrastructure entails the construction of transportation and logistics hubs, ports, energy plants, refineries, and power grids, among other things. Soft infrastructure refers to the development of regulatory standards, trade agreements, and so on.
Iraq received the most construction-related investment in the West Asian region in 2021, with USD 10.5 billion for financing a variety of projects ranging from energy and aviation infrastructure to green energy capabilities to the road and school construction. The purpose of this commentary is to investigate China's investment in Iraq and the goals of its intensive engagement with the Arab state. It would also try to identify the issues with BRI-related engagement in Iraq.
