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Ready for the UAE’s ‘first’ e-Shopping Mall?

How online shopping can be frustrating

As the 'UAE's first e-Shopping Mall’ launches, has the age of e-commerce finally arrived in the region?

March 4, 2013 2:10 by

The malls of the UAE are numerous, extensive and even inspirational to some. Unlike other parts of the world which have been suffering from a weakening economy and  rise of e-commerce, shopping malls in the UAE have been thriving. Unlike the United States, which is home to a 35 percent or higher vacancy rate in 200 of its shopping malls, the UAE has witnessed extensions of the Dubai Mall and Mall of the Emirates, plus renovations of BurJuman and Al Ghurair Shopping Mall in the past year or so.



And despite the dominance of physical retail outlets, e-commerce has been becoming increasingly popular in the UAE. Starting with which was launched in 2005, more recent additions to the sector include Jado Pado and Namshi. The latter recently secured $20 million financing from JP Morgan Chase and Blakeney Management. launched earlier this week, is the latest the ecommerce website to join the pack. Endorsed by the Department of Economic Development in Dubai, Tejuri sells 40 international and local retailers which sell more than 150 brands including Sharaf DG, Reebok, Marina Exotic Home Interiors , Jumbo, Eros, THEFACESHOP , Al Jaber Opticals, National Stores and Springfield.

“By taking the offerings of our malls and retail spaces online, we are taking consumer engagement to an advanced, global level and opening up a new avenue not just for established retailers, but also for small and middle-sized local business looking to break into the retail arena,” said Mohammed Sharaf, Chairman, Tejuri.

According to research from Euromonitor, the region spends $1.1 billion on e-commerce – a number which is expected to double to $2.2 billion in the next three years. The GCC is much more ambitious and predicts that B2C e-commerce sales will hit the $15 billion mark by 2015. It may seem ambitious, but given the exponential growth the region has seen in the past few years, it also seems possible. In the past two years B2C e-commerce sales has grown by 150 percent in Egypt and 80 percent in Iran.

The B2C market is estimated to be worth $520 million in Saudi, $375 million in Qatar and $280 million in Kuwait. What is more Aramex recently announced a 300 percent jump in e-commerce

“Online retailing is still very niche in the Middle East. However, it’s growing exponentially in places like the UAE and Saudi Arabia” Euromonitor’s Sana Toukan told the BBC.

One of the major forms of resistance to online retail was a lack of trust in the security of online payment. The introduction of Cash On Delivery (COD) option has completely changed the face of the game. Aramex reported last year that a massive 70 percent of e-commerce sales in MENA were paid via COD. Added to this, PayPal has recently allowed people to tie up their local bank accounts allowing for payments apart from the suspicious credit card.

From this perspective the e-commerce sector is looking promising in the MENA region. With the infrastructure more or less in place and considerable leeway already accomplished by online brands – it will be interesting to see whether government-supported will be able to do to the e-commerce scene what GoNabbit did to local group buying.

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