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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
A Kippreport survey has found that UAE shopping websites charge 50 percent more than their US counterparts, casting doubt on the true competitiveness of the growing online retail sector.
Armed with a shopping list of 10 items – including DVDs, books, electrical items and flowers – Kipp surveyed various online stores in the UAE and US. The total cost of buying the 10 products from US sites, to ship within the States, was $421.37. If you used UAE sites for local delivery, you would pay $650.74 – or 54 percent more than in the US.
The survey comes at a time of true growth in the UAE’s online retail sector. More and more online shopping sites are springing up; one contender, QuickDubai.com, reported a 20 percent rise in sales during Eid al Adha, and a 25 percent rise over Christmas. Other websites catering to the UAE shopper include nahel.com, citrusstv.com, souq.com and brownbag.ae. A website called ‘Dia’, the first ever Arabic-language online fashion store, will launch in spring.
Consumers were slow to embrace internet shopping due to a distrust of using their credit cards online, despite the UAE having the highest broadband penetration in the Middle East. But local online retailers have given customers the option of paying on delivery, which has eased the concerns of some. Evidence of this came with a Mastercard survey released last year, which found that UAE residents spent $1,193 online in the fourth quarter of 2008, more than consumers in Hong Kong ($543), Singapore ($841) and Australia ($644). According to the Arab Advisors Group, a quarter of the UAE’s population shops online.