The region's biggest online retailer sold twice as many goods during the biggest online shopping weekend of the year as shoppers swapped the mall for the web.
Souq.com said it sold 1.2 million products over the so-called “White Friday” weekend – more than double last year’s total.
The jump underscores how UAE shopping malls are facing increasing competitive pressure from online rivals as consumers who have traditionally been reluctant to share their credit card details online become more comfortable with web shopping.
“The numbers are truly amazing,” said Ronaldo Mouchawar, the chief executive and founder of Souq.com. He said traffic was 10 times the daily average, with 50 per cent of sales coming through its mobile app. “We are shipping really fast, so Friday’s sales are being delivered now. The share of credit card payments show that customers are now embracing e-commerce and are convinced of the merits versus cash payments. As a rule we are the sixth most visited site in the UAE, above Instagram, Snapchat and Twitter, so we are now a destination that people enjoy visiting.”
The Middle East has lagged more developed economies in e-commerce adoption by a wide margin. It is estimated that only 2 per cent of regional retail sales are conducted online against more mature markets such as the UK, where 17 per cent of retail sales are online. The rapid growth of web shopping has decimated the high street in the UK and elsewhere in Europe. More than 100 BHS stores closed in July for good, the latest in a string of closures of brand names such as JJB Sports, Jessups and Comet. Even Marks & Spencer, middle England’s favourite shop, announced this month that 30 UK department stores would be closing, with 45 being shrunk.
With the US$1 billion, 20 million product online project Noon.com launching in January, the UAE’s malls are about to face increased competition from the web.
“Just like any business you have to move with the times,” said Mohamed Alabbar, chairman of Emaar, speaking at the launch of Noon.com. “As a mall owner and operator I have to believe the future is digital, therefore I had better be ready. The mall we are building in Dubai Creek Harbour will have many digital options and social spaces, we have to adapt.”
The rise of Souq.com and the imminent arrival of Noon.com has shown that consumer habits are changing in the region
Other online retailers in the region are also reporting increases in sales.
“November 2016 is already 4.8 per cent better than 2015 and we still have a few days to go including Cyber Monday,” said Omar Kassim, the chief executive and founder of e-commerce site Jadopado.com. “November 2016 sales are over 17 per cent higher than last year and Black Friday was our best Friday ever. Our top-selling items were the iPhone 7, the iTunes $100 gift card and Apple’s MacBook Pro.”
While high street retail sales have been suffering across the globe, the online sales boom shows no sign of abating. Amazon.com, the world’s biggest retailer, in the United States said that Black Friday and Thanksgiving orders were on pace to surpass the same two days last year, thanks to more mobile shopping and a surge of discounts.
In the UK, John Lewis, the high street department store, said sales through its website were ahead of expectations as shoppers placed five orders every second. The most sought-after items included Sonos Play 1 wireless speakers, with one sold every 10 seconds.
The association for online retailers, IMRG, suggested Dh5.8 billion would be spent online on the Friday, up 16 per cent on last year. Across the week of Black Friday it forecast more than Dh31 billion worth of sales would be made in the UK alone.
ascott@thenational.ae
Follow The National's Business section on Twitter
