Online retail is booming and the UAE is the most advanced e-commerce market in the Middle East and North Africa. A study between the Dubai Economy and Visa estimated e-commerce transactions in the country to hit $16 billion in 2019 and grow 23% on average annually to 2022. With consumers increasingly relying on online shopping, it is estimated that 95% of purchases will be made online by 2040. E-commerce is opening the doors of opportunity to countless entrepreneurs.
It becomes important to mention that online shopping is growing quite rapidly in the United Arab Emirates (UAE) and it seems to be growing at the fastest rate in Dubai, among all the Emirates. A large number of people are moving away from traditional shopping modes to online shopping, thereby suggesting the viability of starting an e-commerce business in the UAE.
There are multiple reasons why business investors should consider operating an e-commerce business in UAE. There is 0% income tax, 100% repatriation of business profits, 0% corporate tax, 100% complete business ownership and negligible custom duties. All these benefits make e-commerce business setup in UAE a very lucrative business.
Here are six tips which can help you start your ecommerce business in the UAE:
Identifying the Right Jurisdiction –
Choosing between a Free Zone and the Mainland authority will entirely depend on the nature of your online business. A mainland license gives you the freedom to trade or sell your products and services directly to the local market while a free zone license will require you to work with a local distributor. In this case, consider the factors from which your business can benefit more in terms of market reach and scalability. It is suggested to avail business consultant services to understand more about jurisdiction and licensing procedures.
Develop an E-Commerce Website –
Having your own website is an important piece of your ecommerce strategy. It is a great way for you to grow your brand, acquire loyal customers, gain new insights, and get creative with your marketing. However, relying on a single channel for all of your sales can also be problematic. Diversifying where you sell online can help you reach new customers, especially as ecommerce becomes more competitive.
It may take a while to build and test your website, but it’s worth spending time and effort as it will serve as your stage to showcase your products or services, a platform to gain and interact with customers, and your primary tool for making profits. So to build an income-generating website you have to keep in check its user-friendliness, web maintenance, secure hosting, and mobile usability among other things.
Payment Flexibility and Security –
Accept multiple methods of payment, ranging from credit cards and digital wallets to cash and on-delivery payment. Ensure all online payments are secure with encryption and set up the-ecommerce platform on a VPN (virtual private network) to prevent hacker threats. It is also necessary to present multiple payment options to your consumers. Integrated secure payment gateways that include credit card payments and pre-paid card systems are the most convenient ways to do this. Another payment option is cash-on-delivery (COD), which comes in very handy on numerous situations
Secure Logistics & Warehouse –
The delivery of goods to customers is a basic component of e-commerce. In order to ensure quick delivery of the goods to buyers, traders rely on freight forwarding services of logistics which help the customers receive the purchased goods quickly and safely.
If your online business involves physical products to sell or trade, it is required to have proper warehousing to store your goods. This factor is very important when deciding the jurisdiction to set up your company in. Once you secure a warehouse and office space it is easy to establish a reliable logistics system to ensure efficient delivery of your products to your consumers. You can also opt for a third-party logistics.
Localize E-Commerce for UAE –
Ensure your website has an Arabic version. It does not only means just translate your content, but go beyond to provide a personalized experience for Arabic speakers, such as changing your Arabic website’s orientation to completely. Offering localized content in Arabic will be a key differentiator in the GCC market.
A detailed business plan –
A number of entrepreneurs believe starting an ecommerce business is cheaper and a faster way to break-even or earn profits. This is an incorrect perception. Even if there is no retail space needed in ecommerce, there are a number of other costs that need to be accounted and planned for.
Customer acquisition is a huge cost. It takes considerable effort and budgets to be visible and build traction. Besides website/app development costs, there are other elements like customer service costs and last-mile delivery costs that need to be included. An experienced business consultant can develop a business plan that will cover the complete project cost so that you are better prepared to launch your ecommerce business.
