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Competing with the web giants
Despite the rise of online shopping, UAE retail websites charge up to 50 percent more than their US counterparts. A strong ‘mall culture’ and poor postal service are also holding back the fledgling industry.
January 14, 2010 2:16 by Ben Flanagan
But commentators point to certain barriers which could mean that local sites will never truly compete with the UAE’s malls – and certainly leave them unable to offer the kind of discounts available through giants like Amazon.com.
Yousef Tuqan Tuqan, CEO of Flip Media, the largest interactive agency in the Middle East, says that the UAE’s inefficient national postal service and disorganized address system is part of the problem.
“If you have to go to a post office to collect your items, you might as well go to a mall. There is a general mistrust of the postal system here. And the alternatives – courier companies – are not cheap,” he says.
Tuqan says that only concert ticket sites, airline websites, and portals selling niche products do well in the UAE’s online retail market, adding that physical shopping malls are the “focal point of social life” here. And Tuqan claims that worries over using credit cards online persist: “Ecommerce is still a scary thing in this part of the world – people are very wary of using their credit cards online,” he says.
Kajsa Dokakis, Managing Director of QuickDubai.com, acknowledges that the size of online shopping sites in the UAE mean that they are not yet able to offer the kind of discounts available elsewhere. “We try to be the same price as retail [stores], but sometimes we go above that. Because we’re not buying wholesale, we can’t make the kind of discounts that Amazon offers,” she says.