Major retailers hold back on website launches

Major retailers in the UAE are delaying launches of e-commerce websites as they wait for a significant increase in the number of shoppers buying online.

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Some of the biggest retailers in the country are delaying the launch of retail websites to wait for online shopping to become more popular.

LuLu Hypermarket and Ikea had planned to go live with e-commerce websites in the new year but have deferred the launches because of the relatively small size of the online market and the logistics involved in payments and deliveries. "Obviously, for companies of that size, logistics is an important consideration," said Zeid Kaddoura, the director of Webology, an online marketing and e-commerce consultancy.

"That's something they would have to get right 100 per cent."

Ikea launched a revamped website in September that allows customers to view products, create shopping lists and check the availability of products in stores.

But users cannot yet buy the products over the internet. The launch of such a service, with home delivery, has been delayed to the second half of the year.

"We are working on it," said Mile Franicevic, the general manager for Ikea in the UAE, Egypt and Qatar. "We have got to do it properly because we have only one chance to get it right. We said 'let's get the website running first and get an audience'."

V Nandakumar, the spokesman for Emke Group, which operates LuLu, said the hypermarket chain had "slightly delayed" a launch of an online store that is expected to be similar to Carrefour's e-commerce website, which sells electronics, sports equipment, household appliances and other goods.

LuLu is also considering offering a grocery delivery service.

"We are working on it, but there is no date confirmed for launch," Mr Nandakumar said. "We are looking for an appropriate time. The online market is still very, very small. It's a very niche market that people are talking about."

Despite the size of the e-commerce market, it is expected to grow dramatically over the next four years, with spending online to hit US$2.09 billion (Dh7.67bn) by 2016, according to the research company Euromonitor, more than double the $1.01bn spent last year.

In the UAE, consumers spent $226.8 million online last year, which is expected to grow to $270.9m this year.

Carrefour's website makes up 20 per cent of total internet retailing in the UAE, according to Euromonitor.

Given this predicted growth, major fashion brands are also considering increasing their online presenceto gain first-mover advantage, according to Webology's Mr Kaddoura, who is advising a number of retailers. "Fashion, cosmetics and furniture - these things are coming up big right now," he says.

Giordano, a fashion brand with more than 200 stores in the Middle East, is testing its payment-on-delivery service in the UAE and hopes to start marketing and launching the service in the next few months.

"Giordano has always been working on a website," said Ishwar Chugani, the company's executive director. "But it's not as simple as just launching a site. It's not something you can hurry."