Booming online retail sales highlight UAE consumer shift

UAE consumers are realising the purchasing power of their phones.
A man check electronics gadgets at Jumbo Electronics store in Mall of the Emirates during the Christmas season. Jumbo Electronics recently invested US$1m into its online retailing. Jaime Puebla / The National
A man check electronics gadgets at Jumbo Electronics store in Mall of the Emirates during the Christmas season. Jumbo Electronics recently invested US$1m into its online retailing. Jaime Puebla / The National

Electronic commerce across the UAE took a huge jump this year, with online retail sales from mobile devices jumping 170 per cent compared with last year, according to Euromonitor International.

The research agency puts the increase down to a need for convenience and UAE consumers realising the purchasing power of their phones.

“Internet retailing saw a boom growing by 41 per cent on an annual basis,” said Nikola Kosutic, the research manager for Euromonitor International.

Retail sales through mobile devices reached Dh400 million, she said, as more international brands focused on the UAE, offering easier checkout and shipping options.

Ms Kosutic also noted that Alibaba, the Chinese e-commerce giant, hoped to build a hub in the Emirates.

The interest of global players has not been lost on local retailers.

Jumbo Electronics recently invested US$1m into its e-retail business.

Vishesh Bhatia, the chief executive of Jumbo Group, said the company would break even on the investment in two years.

The growing popularity of internet retail was highlighted last month by souq.com’s “White Friday” event. The company, which based the event on Black Friday sales in the United States, reported more than 246,000 items sold.

Six million visitors used the site during the sale, and more than half – 51 per cent – of orders were made on a mobile device. Items sold included electronics, new cars, airline tickets and grocery supplies.

But the online shift does not mean that local retailers will cut back on brick and mortar operations.

“In Mall of the Emirates we have a huge store undergoing a refurbishment costing Dh4.8m” said Mr Bhatia. “This is a very long-term play. Customers know where we are. They can see us, feel us, touch us.

“Our virtual presence is another string to our bow, it is not who we are. However what we sell no longer has to be just electronics – online we can sell and deliver what we want.”

ascott@thenational.ae

Published: December 13, 2014 04:00 AM

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