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Rough ride for online fashion retailers in the Middle East

online fashion retail in the Middle East

Notwithstanding the optimism fueled by internet savvy and style conscious Middle East consumer, online fashion retail is having a bumpy ride on the sand dunes of the Middle East. Kipp finds the reasons.

July 31, 2012 11:31 by



But apart from investing in customer service, bearing the cost of shipping and offering various payment options, online retailers are bending backwards to make the ‘ lowest priced’ offer, to attract the fickle minded consumer online. Infact, not marking down items for sale online, is proving to be something of a faux pas for fashion e-retailers.

Mastercard’s ecommerce survey found that ‘price’ is the top factor influencing online retail in the Middle East. The survey dated April 2012 reveals that the most compelling factors influencing ecommerce in the region are price/value of the items (85%), secure payment facility offered by site (85%), convenient payment methods (82%), reputation of the website (81%) and website being user-friendly (79%).

It’s no surprise then, online fashion retailers are having a fist fight in terms of price competition, which is ultimately affecting profitability for retailers and in turn, affecting the full price fashion retailers and has a ripple effect on the entire ecommerce sector in the region.

“The opportunity to grab a bargain online has increasingly drawn many traditional shoppers to make an online purchase. Ultimately, this leads to consumer confidence in the domain of online shopping as a whole. As most discount e-tailers sell end-of-season products, full-price luxury stores will continue to appeal those who wish to own designer goodies straight off the runway. However, there is an increasing pressure on full-price luxury designer stores to have frequent markdowns to maintain consumer presence in their stores in this ever-changing trend of shopping.” Says Federica Mazza, Creative Director, Lemuda.com

Another discount online retailer, Bonavenue stresses on the need to stay competitive and build a brand name at this stage of the online retail sector in the Middle East. Emad Tariq, co founder and MD of Bonavenue.com says, “There is so much potential in this market but at the same time the consumers are flaky. The reason it remains untapped is because consumers can change their mind at a click of a mouse, they will go for the next best deal so the only strong strategy to follow is working your best to give the best deals. It is definitely a rollercoaster ride and you never know what to expect or what will happen the next day, but day by day building a brand name is possible.”

The main focus for online fashion retailers in the Middle East market at the moment, is to win the customers trust and convince them to get into the habit of purchasing online. This exercise is undoubtedly taking a toll on profitability for online retailers, as they continue to swallow costs and offer discounts to stay in the game.

Image from gadgetynews.com



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1 Comment

  1. SidB on July 31, 2012 2:53 pm

    Online retail has always worked well servicing the smaller out of reach cities in a country. The big cities like dubai will always have physical malls, and that will ALWAYS be competition. But Online retailers can reach much farther inside, and work on developing the market in places where there aren’t too many physical store options.

     

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