Generation start-up: GiftBag.ae looks to expand regionally as online demand grows

The Dubai-based platform is looking for investors to help with a push into other markets such as Saudi Arabia, India and Australia

Latika Chawla and her husband Sandeep Chawla founders of GiftBag.ae. Ms Chawla described competition in the online delivery market as 'fierce'. Pawan Singh / The National

GiftBag.ae, an online platform in Dubai that specialises in delivering gifts, intends to expand to Saudi Arabia and other countries as internet use and demand for online shopping grow amid the coronavirus pandemic.

The company, which sells items such as chocolates, cakes, flowers, balloons and sweets on its website, was started by Latika Chawla and her husband Sandeep Chawla in 2011.

It also offers gift consultations and personalised services through live chat sessions and several other products.

“With the advent of Covid-19, we saw a huge surge in demand during the second quarter. In general, the economy has [registered] a sudden increase in online shopping. We had to increase our marketing budgets to reach out to end consumers and added more on-demand delivery partners to facilitate deliveries,” Ms Chawla says.

Sales increased by more than 150 per cent during the second quarter, compared to the same period last year, she says.

The company received orders from clients in Egypt, India and other countries for the delivery of gifts to their loved ones who remained in the UAE due to movement restrictions put in place after the outbreak of Covid-19.

For instance, a wife in Egypt wanted personalised chocolates delivered to her husband in Abu Dhabi on their 17th wedding anniversary – the first anniversary they have spent apart.

The company also took a sales order from a father in India who wanted a special cake to be delivered to his daughter on her fourth birthday in Dubai, as he could not travel to the UAE due to the travel restrictions.

“We realised just how many people were stranded in other parts of the world, away from their loved ones, and their need to connect on special occasions with a special gift.”

Ms Chawla first identified an opportunity in the e-commerce sector about nine years ago as Amazon.com and Souq.com were becoming popular. She had taken note of the absence of an online platform to sell gifts on special occasions such as Eid and other festivals.

“The aim was mainly to bridge the gap in the e-commerce sector for gift deliveries. There were many bakeries and florists out there who did not have the right platform to reach the growing audiences moving towards online shopping,” Ms Chawla says.

The couple were keen to make their mark on the business world.

“We [had] just got married and were a new couple at that time and thought: ‘let us do a venture together’. E-commerce was just starting up and we thought it was the right time to start with gift deliveries,” says Ms Chawla, who was born and raised in Dubai.

She did not reveal how much they invested to launch the company, which is currently profitable, with 15,000 to 20,000 people visiting the site each month. It also receives between 150 to 200 orders a month from customers looking to buy gifts.

“We aim to move towards a gift-focused marketplace – both multi-vendor and multi-category. Currently operating in the UAE only, we are looking forward to establishing our presence in Saudi Arabia, India and Australia.”

The company plans to raise money and is seeking investors “who will help us grow and take our expansion to the next step as a gift delivery marketplace, in [the] UAE and beyond”.

Start-ups in the Middle East and North Africa secured $659 million (Dh2.4 billion) in funding in the first half of this year, a year-on-year increase of 35 per cent, according to data platform Magnitt.

The UAE received the largest share of funds raised while Egypt was ranked first in terms of the number of deals, accounting for 25 per cent of the Mena region’s total. E-commerce accounted for 14 per cent of all deals, the data shows.

The UAE is supporting start-ups with various investment initiatives. Abu Dhabi committed Dh535m to a new fund that will invest in start-ups as part of the emirate’s Ghadan 21 programme.

Dubai, which has formed a number of technology accelerator and start-up hubs, recorded an 83 per cent year-on-year increase in the number of e-commerce business licences issued in the first half as consumer demand for online shopping grew during the Covid-19 pandemic.

The emirate’s Department of Economic Development issued its DED Trader licence to 1,947 new businesses during the period, up from 1,064 in the first six months of last year, it said this month.

Competition in the local marketplace “is fierce, with the big players and their funding hijacking market share and visibility”, Ms Chawla says.

“In addition, almost all individual bakeries and florists have set up their own e-commerce stores.”

Q&A with Latika Chawla, co-founder of Giftbag.ae

What already successful start-up do you wish you had started?

Just out of university, in 2004,  Sandeep created a social portal for our group of friends to connect, post pictures and message each other after we all went separate ways. Little did we know that Mark Zuckerberg was creating something similar at the same time that took the entire world by storm. If only we had the vision and a Harvard degree. At that time, we could have also pursued our concept further.

What is your next big dream?

To be the "go to" app or brand for gift delivery in the region – for both vendors and consumers.

What new skills have you learnt in the process of launching a start-up?

Running a business, especially a small business, has taught us that no task is smaller than the other. We have invested as much time and effort in delivering gifts and personally talking to our customers as we have in accounting, marketing and other business tasks. Being a marketer, I have tried to be up to date with digital and social marketing skills to help with my business.