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Dubai CommerCity: The UAE e-commerce equation explained

Dubai CommerCity: The UAE e-commerce equation explained

Could you share any figures related to the value of the UAE e-commerce sector, as well as trends related to sub-sectorsthat have seen the most growth over the course of the pandemic? The UAE’s e-commerce sector value hit $16bn in 2019 and is expected to continue growing at annual rate of 23 percent by 2023,

Could you share any figures related to the value of the UAE e-commerce sector, as well as trends related to sub-sectorsthat have seen the most growth over the course of the pandemic?

The UAE’s e-commerce sector value hit $16bn in 2019 and is expected to continue growing at annual rate of 23 percent by 2023, according to Visa Middle East. Dubai CommerCity is set to support entrepreneurs in capitalising on this huge opportunity and further accelerate the already significant rise seen in e-commerce business setup and online retail across the UAE.

Between March 2019 and February 2020, the top ten spend categories in the UAE accounted for 78 percent of online purchases. These included government services and education, food and grocery, retail goods, apparel and accessories, quick service restaurants, telecom and utilities, airlines, lodging, professional services and fuel.

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Government and education payments topped the list, accounting for 34 percent of aggregate online spending, following the adoption of e-commerce payment options by the UAE government after the start of the pandemic.

In addition, the Dubai Chamber of Commerce and Industry recently announced that the UAE’s retail e-commerce market reached $3.9bn in 2020 following the pandemic, 53 percent higher than the same period in 2019. Apparel and footwear e-commerce had the highest share, equivalent of $1.3bn, followed by consumer electronics, with a share of $1.2bn.

What e-commerce sectors do you foresee experiencing the most growth over the next few years?

In the UAE, the retail sector is expected to witness growth over the coming years, reaching $63.8bn by 2023, with retail e-commerce forecast to grow by 78 percent from 2018 to 2023, according to Visa’s UAE eCommerce Landscape 2020 report.

Specifically, it is expected that personal accessories and eyewear will be the highest growing products in the UAE e-commerce market, with an expected CAGR of 20 percent from 2020 to 2025, followed by media products, pet care and home care products, according to recent analysis.

What are the benefits of establishing within Dubai CommerCity?

With an area covering 2.1 million square feet and an investment of around $1bn, Dubai CommerCity has an ecosystem that supports business growth, which has attracted global and regional manufacturers, as well as distributors and global e-retailers to establish their businesses with us.

There are three distinct clusters within CommerCity.

The business cluster has our office buildings; the logistics cluster consists of flexible-sized warehouses and fulfilment units; and the social cluster hosts shops, restaurants, multi-purpose exhibition halls and quality amenities that are open to the public. It also has a dedicated pick-up-point for click-and-collect orders and a drop-off point for customer returns.

Successful e-commerce companies understand the importance of well-managed logistics to their business, and we concentrate on providing this essential service to them in a flexible format. 

Forster says the UAE is a great place to set up the base for your business – particularly a web-based enterprise

What are the main solutions you offer your clients?

Dubai CommerCity supports big and small e-commerce players in the region. Besides complete business setup and customs support, Dubai CommerCity provides e-commerce strategy consulting, guidance on e-commerce regulations in the region and end-to-end logistics solutions, inclusive of warehousing and last-mile delivery.

Organisations can also gain access to complete e-commerce platform solutions, digital marketing services and other support services, including photo studios and call centres.

With the UAE recently relaxing its rules on foreign ownership, what do free zones need to do in order to stay relevant in this new, changing environment?

With digital transformation, which has been accelerated following the coronavirus pandemic, free zones need to adapt to a changing environment through providing their customers with a range of shopping options.

Free zones should opt for adopting omni-channel and digital experiences, offering consumers a variety of options to pay, whether they are using mobile devices, e-wallets, or other flexible digital payment options. E-commerce is also an important element for the success of free zones, especially at this time.

Dubai CommerCity, for example, ensures high-speed connectivity, automated and integrated logistics and warehouse operations, smart mobility, smart services and last-mile delivery solutions, to provide consumers with a seamless shopping experience.

Free zones should opt for adopting omni-channel and digital experiences

What would be your advice to entrepreneurs considering establishing a business in the UAE? 

The UAE is a great place to set up the base for your business – particularly a web-based enterprise. The country ranked 13 out of 99 for ease of starting an online business, according to a study published in January.

After the business has been incorporated, an e-commerce operator should look into expanding its product and service offerings and providing consumers with the best online shopping experience.

It is essential to offer an omni-channel shopping experience while also taking local payment preferences into consideration – cash on delivery (COD) remains an important payment method in the region, despite the growth of e-wallets.

Last but certainly not least, it’s important to remember that e-commerce is not only about selling products – around 30 percent of orders are returned and if you want customers to return, creating a smooth return experience is an essential component as well. 

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The content is supplied by Arabian Business Brand View Partners.

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