Kippreport gets the scoop from Neelesh Bhatnagar, CEO of Emax, and Nadeem Khanzadah, head of omnichannel retail at Jumbo GroupSeptember 2, 2015 5:24
Can you really start an online business in the UAE from your bedroom?
Barry Cummings, owner and digital marketing strategist at Maximum Net Gain, says it’s not easy for entrepreneurs targeting the Middle East region
March 20, 2014 10:10 by kippreport
Scanning the business section of most news portals, there’s hardly a day that passes where we don’t hear about a small start-up being snapped up by one of the mega power companies; WhatsApp’s $19billion acquisition by Facebook being one of the most recent, sweet revenge, perhaps, for Brian Acton, who has become a billionaire off the back of a company that wouldn’t hire him in 2009.
When I started in digital marketing, I did, indeed, build a number of businesses from my bedroom in Umm Suqiem 3, but it wasn’t easy and it was at a time when building online businesses was perhaps simpler –that is before Google’s Penguin, Panda and Hummingbird updates. The thing was, none of my online businesses actually targeted the Middle East region as a market, so while I was based here, I was building businesses that really contributed to the US economy.
Why did I do that? Well, unlike the developed markets of the US and Europe, we are still a long way behind when it comes to things, such as infrastructure, payment gateways, and understanding of e-commerce by the banks and, therefore, customer comfort with online payment gateways (such as Paypal, Square, 2CO and so on).
On the ground here, in the UAE, your first issue is that there is a very high possibility that your target market, while happy to research your product online, won’t buy through the web. So, we have to have that good old-fashioned option of ‘cash on delivery’. It’s not surprising, given that the UAE has been a cash-based economy for the 42 years it has existed and for many years beforehand as bedouins and the Trucial States. So, it is a big paradigm shift to move to online payment.
On top of that, you’ll be lucky to get a merchant account to allow you to process the orders of the few people that will actually pay online. It’s not easy and is quite costly, or at least it was. I know there are a number of companies on the ground here that have now potentially solved this issue for you, but I think I’m right in saying that there is still a hefty price tag associated with a merchant bank account here (please do correct me in the comments if you know better).
Finally, assuming that you have managed to set all of this up, succeeded in driving some traffic to your site and fewcustomers have bought something from you, your next challenge – if you are dealing with physical products – is deliveringthem to buyers. The online infrastructure on the ground here doesn’t support the one notion that online shopping, or e-commerce, is supposed to achieve – convenience. It’s far from convenient to field numerous calls from courier companies that can’t find your off-white villa, on the corner of the dirt track opposite the Etisalat pole in Barsha South 3.
But yes, you can
In spite of all of the obstacles, the answer to my original question and the title of this post is, yes, you can set up an online business from your bedroom. Is it in its truest sense an online
e-commerce business? Probably not, but we didn’t even mention the licensing issues here.
However, you can establish an online business if you target a specific niche and an audience that is comfortable with buying online (and as such, is likely to have a Paypal account), and you are then able to absorb the admittedly higher fees these charge per transaction. Keep to selling digital products and you completely eliminate the whole delivery issue too.
Moving forward, many of the above will become irrelevant and that’s the beauty of this part of the world. We are catching up quickly and with the vision of the country to become ‘Smart’, online businesses are going to become easier and easier to set up and your market is going to be eager to engage with you throughits favourite channel.
So to all of the bedroom entrepreneurs out there, keep going.