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Will Ikea’s venture into region’s online shopping scene be a success?

Will Ikea’s venture into region’s online shopping scene be a success?

How often do you shop at a local online store? Ikea’s hoping your answer to that is every day. Would Ikea succeed where so many have failed?

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June 13, 2011 3:21 by



By next year, if you’re looking to buy that sofa set or that pair of lamps, instead of driving your way down all the way to Ikea, all you may have to do is open your computer and order online.

At least that’s what the world’s biggest furniture retailer hopes for, as it recently announced it plans to launch a website early next year allowing UAE customers to buy online and have their purchased items delivered at home. The move is in line with the capabilities of Ikea’s websites in other regions, according to an article on The National.

Yes, an international retail brand launching an online shopping site in the UAE in the same year that the iPad2 is launched; that Emirates Airlines is launching a boarding pass mobile app; and that the rest of the world is going crazy for QR codes. Well, if you’ve been in the Middle East a long time, you wouldn’t be surprised to hear such news stories.

While there have been online companies which have been receiving positive reception, such as JadoPado.com, Nahel.com and Souq.com, retail brands have not been particularly successful in entering the retail space.

Last year, superstore chain Carrefour launched ic4uae.com in September—the first of the UAE’s major retailers to go online. But before that, there was Brownbag.ae, of which only remains a Facebook page, a blog site and a directory listing. The website has shut down for what Kipp can only gather are logistics difficulties and minimal revenues.

But a snowball of retailers going online (finally) is expected, now that a couple of big names are in that space. Supermarket chain Lulu, for example, is planning to a shopping site, as well.

Aside from the irksome fact that Kipp can’t believe people are still playing catch up in terms of online shopping in the region, we’re also not entirely sure how the concept of grocery shopping online will be received in a country that sees shopping as a family activity.

There are a lot of insights that show steady growth in online shopping in the UAE. However, most of these transactions are made through international sites. The bank’s lack of facilities that would allow local businesses to offer easy online payment structures is just one of the hurdles.

But of course we’re talking about clothes, books and the like. For groceries and big ticket items like furniture, Kipp wonders if how the brands will transfer the experience from the store to online.

The question remains: will customers in the UAE feel at home with foregoing the touchy-feely aspect of home shopping?

*image from cymaxstores.blogspot.com



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3 Comments

  1. Sam on June 13, 2011 3:39 pm

    Before quoting jadopado you might have quoted spendwisor.com, alshop.com or quickdubai.com, way ahead in term of traffic and sales and online since a longer time …

     
  2. Omar Kassim on June 13, 2011 5:17 pm

    Interesting article, Precious.

    I think 2011 / 2012 could be the year where online finally gets some traction in the UAE and possibly some parts of the Middle East.

    Retailers like IKEA don’t have a lot to lose by joining the online fray – their product range is such that buying online or buying in store is not too dissimilar experience. The items are inexpensive in comparison to “regular furniture” and with the general awareness of their inbuilt obsolescence and the nature of the items that they sell, it should be fairly easy to convert a segment of their customer base to move their purchases online.

    The real issue in my view is with retailers like Carrefour, Lulu and perhaps even the likes of the various entities in the Landmark Group. With the tremendous amount of investment that has gone into their retail infrastructure and the costs associated with it – does it make sense for a brick and mortar retailer to move online while potentially cannibalising their existing business?

    It’s been almost 3 months since we took JadoPado into a little beta launch – and Sam who’s commented above is absolutely right there are a number of existing players out there who’ve been out there longer and while I can’t speak for their numbers they are definitely more well established than we are. It’s been a great 3 months – the response has been overwhelming. It feels like the pieces are all falling into place and that the UAE is finally ready for some great online experiences.

    In keeping with Sam’s comment, a few more players worth mentioning are EmiratesAvenue.com and Kentessa.com. At the end of the day the more the merrier – we all want a wider range of products, better prices and great service!

    Omar Kassim, Founder @JadoPado.

     
  3. Andrew on June 16, 2011 8:55 am

    I wasn’t even aware Carrefour had a website until I saw this story, naturally I had to check it out.

    I’ve been needing a new mobile phone and I found a rather good bundle at an excellent price. It did however state there was no current stock, but that it would be ordered on demand. I placed an order, received no confirmation of my order, but my credit card was immediately charged.

    Only after I chased up Carrefour after a couple of days did they finally decided to tell me there was no stock, none was being ordered, and would I like a refund?

    Sorry Carrefour, I won’t be touching your website again.

     

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