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Competing with the web giants

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.

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January 14, 2010 2:16 by



However, Dokakis says that as the market matures and consolidates, the consumer could benefit from more competitive prices. “I think the niche sites will be [as competitive as Amazon]. At the moment there are so many small gift sites, and I think in the next few years they’re going to be bought up, and there will be one or two doing really well.”

Dokakis claims that QuickDubai’s margins have doubled since it launched in 2006. And so, given the convenience of internet shopping, it could be that online retail sites start to combat the entrenched ‘mall culture’ in the years to come.

Online retail: the UAE Vs US – see how the sites compare on the next page.



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3 Comments

  1. Didier Picard on January 16, 2010 7:51 am

    Dear Ben,
    Congratulation on your article. I would like to bring another perspective, if I may. We are preparing the launch in February of http://www.fashionation.me, the first online, by-invitation only shopping club in the Middle East. Our site wil enable its members to have access to luxury and lifestyle brands at prices up to 70% off retail. Fashionation.me is established in the Middle East and sources excess inventories directly from the brands and their official representatives in the region. Such operation must be very lean to be competitive and propose attractive prices to the members. It is interesting to note that the limited number of banks authorised to receive online payments from credit cards in the UAE (only 3 local banks have received approval) does not seem to encourage the implementation of effective fraud procedures, and does not give these banks a strong incentive to really compete. As a consequence, a customer will on average pay twice as much for a credit card transaction as he would in Europe or US, without getting the level of protection one would expect.
    Best regards
    Didier Picard
    Managing Director
    Fashionation.me

     
  2. NK on January 19, 2010 8:23 am

    Hi Ben,
    Indeed a very well written article.. i follow most of your articles whether its kipp report or any of your publications.. somehow i beg to differ on this article there are other sites which do give clients a more competitive price than the market; as well better delivery service… I recently shopped for a Blackberry phone on http://www.ALshop.com and must say their prices were good as well a very good serivce.. I had my phone in 35 minutes after placing the order… I was very damn impressed and when compared prices with other sites or even retailers realised i paid 30% lesser with out the hassle of parking, salik, queues…. you should have a look at the site as well… worth mentioning.. infact i also compared it to the sites you have mentioned again they get my vote..
    Re the cost of products being cheaper in west you have to even see the consumption ratio.. ipods sold in UAE doesnt even contribute to 2% of the sales in the west.. hence the price even from retailers are the same…. apart from that this market still has to see major online buying for prices to go on par with other shopping portals…
    Once again great job…
    N

     
  3. LL on January 15, 2011 9:42 am

    Hi Ben,

    While I agree that COD is popular here across The UAE I also agree with NK that there are sites that give local customers a very competative price within this market as well as an exceptional delivery service.
    Luxe Little – http://www.luxelittle.com offers baby products to parents in the Middle East – many items are at the same price as they are in the USA.

     

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