E-commerce and Online Payments: Revitalizing Iraq's Digital Economy


In a rapidly evolving global landscape, the digital economy has emerged as a driving force for economic growth and innovation. Iraq, a nation with a rich history and a promising future, is no exception to this transformative wave. This article explores how e-commerce and online payments are playing a pivotal role in shaping Iraq's digital economy.

Infographics by GO-Globe Iraq E-Commerce

Understanding the Digital Economy

Iraq, known for its historical significance, has been on a journey of economic resurgence. With the advent of the digital age, the country is now embracing e-commerce and online payments as key drivers of economic growth. The digital economy encompasses all economic activities that leverage digital technologies. It includes online commerce, digital services, and the use of data for innovation and efficiency. In Iraq, this shift towards a digital economy is transforming traditional businesses and creating new opportunities.

Recent Growth in Iraq's Digital Economy

The Iraqi entrepreneurial scene has not slowed down despite the recent political and economic unrest. The Iraqi e-commerce sector has undergone novel and creative advancements in 2021, including investments in start-ups and businesses like Hi-Express, Orisdi, KESK, Alsaree3 and Miswag. Additionally, there have been more measures to promote SMEs, and there is growing interest from abroad in the e-commerce prospects in Iraq, as demonstrated by the Swiss FinTech app ZoodPay. Iraq has a huge untapped potential for e-commerce-based development and economic growth due to its youthful population. The key to utilizing ICT for the reconstruction of the country is launching the e-commerce sector in Iraq.

E-commerce in Iraq

E-commerce Platforms

Iraq has witnessed the emergence of various e-commerce platforms, providing consumers with a wide array of products and services. From electronics to fashion, these platforms are reshaping the way Iraqis shop.

Consumer Behavior

Changing consumer behavior, driven by convenience and competitive pricing, is a significant factor behind the e-commerce boom. Shoppers now prefer the ease of ordering online, with doorstep delivery options.

Online Payments: The Catalyst

E-commerce and online payments can be very important in reviving Iraq's digital economy. There is enormous potential for e-commerce growth in the country given the rising internet penetration and smartphone usage. Online platforms can offer a practical and simple way for companies to connect with customers and for customers to access a variety of goods and services. Online payments can also expedite, safeguard, and improve the convenience of transactions for both businesses and customers. Embracing e-commerce and online payments will enable Iraq to take advantage of new chances for economic expansion and digital transformation.

Digital Wallets

Digital wallets are becoming increasingly popular in Iraq. These secure and convenient payment methods allow users to make transactions online, reducing the reliance on cash.

Payment Gateways

Payment gateways facilitate online transactions for businesses. These gateways are crucial for the growth of e-commerce, ensuring secure and seamless payments.

E-Commerce and Online Payments in Iraq: Facts, Figures and Latest Statistics

  • In January 2022, Iraq’s total population amounted to 41.67 million, 20.58 million of whom are internet users.
  • Iraq’s internet penetration rate stood at 49.4% of the total population at the start of 2022.
  • For the Iraqi e-commerce market, revenue was US$5,67 million in 2022.
  • Iraq is the 50th largest market for eCommerce with a predicted revenue of US$4,557.2 million by 2023.
  • Revenue in Iraq is expected to show a compound annual growth rate (CAGR 2022-2025) of 17.52%, resulting in a projected market volume of USD 9,197 million by 2025.
  • In terms of e-commerce users in Iraq, the number is expected to amount to 22.5 million users by 2025.
  • There were 33.72 million internet users in Iraq at the start of 2023, when internet penetration stood at 74.9%.
  • Iraq was home to 25.53 million social media users in January 2023, equating to 56.7% of the total population.
  • Internet users in Iraq increased by 7.3 million (+27.7%) between 2022 and 2023.
  • 11.28 million people in Iraq did not use the internet at the start of 2023, suggesting that 25.1% of the population remained offline at the beginning of the year.
  •  Fixed internet connection speeds in Iraq increased by 1.62 Mbps (+8.2%) during the past 12 months.
  • A total of 45.76 million cellular mobile connections were active in Iraq in early 2023, with this figure equivalent to 101.7% of the total population.
  • 75.7% of Iraq’s total internet user base (regardless of age) used at least one social media platform in January 2023.
  • Meta’s advertising resources indicates that Facebook had 17.95 million users in Iraq in early 2023.
  • YouTube had 24.30 million users in Iraq in early 2023.
  • Revenue in the E-commerce sector in Iraq is expected to show a compound annual growth rate (CAGR 2023-2027) of 12.8%, resulting in a projected market volume of US$7,371.8 million by 2027.
  • With an expected increase of 14.1% in 2023, the Iraqi eCommerce market contributed to the worldwide growth rate of 9.6% in 2023.
  • User penetration in Iraq is expected be 45.4% in 2023 and is expected to hit 47.9% by 2027.
  • In the Iraqi retail market, the online share is 5.9% and is expected to increase by an average of 7.6% to 8.0% by 2027.
  • The average revenue per user (ARPU) in Iraq, by the end of 2023, is expected to amount to US$222.10.
  • Like in Iraq, global eCommerce sales are expected to increase over the next 5 years.
  • Five markets are considered within the Iraqi eCommerce market.
  1. Electronics & Media - 31.8%
  2. Food & Personal Care - 24.5%
  3. Fashion - 21.2%
  4. Furniture & Appliances - 14.1%
  5. Toys, Hobby & DIY - 8.4%.
  • Most visited e-commerce companies in Iraq, as of July 2023
  1. opensooq.com
  2. amazon.com
  3. alibaba.com
  4. aliexpress.com
  5. ebay.com

Online Platforms in Iraq (Local)

Some popular online Iraqi companies are:
  1. Dukkan
  2. Miswag
  3. OpenSooq.
These platforms offer a wide range of products and services for online shoppers in Iraq.

The Growth Trajectory and Government Initiatives

Iraq's e-commerce sector is on a growth trajectory. With more businesses going online and consumers embracing digital shopping, the sector is poised for exponential expansion. The Iraqi government recognizes the potential of e-commerce in driving economic growth. Initiatives to support and regulate the sector are being developed to create a favorable business environment.

Opportunities for Small Businesses

Iraq's economy has faced numerous challenges in recent years, including political instability and security concerns. However, these challenges have fueled the need for economic diversification, making the digital economy a welcome prospect. E-commerce offers a level playing field for small businesses. With a minimal upfront investment, even startups can reach a wide audience and compete with established players. Trust and security are paramount in e-commerce. Businesses are investing in secure payment gateways and building trust through transparent practices.

Challenges for the E-Commerce market

Despite the promise, e-commerce in Iraq faces challenges such as logistics, internet accessibility, and cybersecurity threats. Addressing these issues is essential for sustained growth. Lack of connectivity and infrastructure, including physical and digital infrastructure for supply chains and logistics, is one of the main obstacles to e-commerce in Iraq. In general, there are significant restrictions on service providers, slow and expensive internet connections, and a low level of internet penetration. The telecoms infrastructure required for e-commerce to thrive in Iraq has been destroyed by decades of conflict. Second, there needs to be a concentrated effort to raise digital literacy among Iraqis so that everyone has access to the internet and the know-how to participate in the e-commerce industry. Both the public and private sectors must work together to build safe and secure e-payment systems, creating a conducive environment for credit card use. As of now, consumers prefer to use cash for both financial and technological reasons.

Case Studies

Success Stories

Several Iraqi businesses have thrived in the e-commerce space, showcasing the potential for success. Their experiences serve as inspiration for others.

Learning from Failures

Learning from failures is equally important. Examining unsuccessful ventures provides valuable insights into avoiding common pitfalls.


The digital economy's role in Iraq's future is undeniable. With the right strategies, investments, and collaborations, the country can harness the full potential of e-commerce and online payments. E-commerce and online payments are breathing new life into Iraq's economy. This digital transformation not only enhances convenience for consumers but also offers immense opportunities for businesses of all sizes.

Frequently Asked Questions (FAQs)

Q1: Is e-commerce widely adopted in Iraq?

A: E-commerce is rapidly gaining popularity in Iraq, with more people opting for online shopping.

Q2: How can small businesses benefit from e-commerce?

A: Small businesses can expand their reach and compete effectively by venturing into e-commerce with relatively low initial costs.

Q3: What are the main challenges faced by e-commerce in Iraq?

A: Challenges include logistics, internet access, and cybersecurity threats, among others.

Q4: Are there government incentives for e-commerce businesses?

A: Yes, the Iraqi government is working on initiatives to support and regulate the e-commerce sector.

Q5: How can consumers ensure the security of online payments?

A: Consumers can use reputable payment gateways and practice safe online shopping habits to enhance payment security.

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