How UAE shoppers are saving thousands of dirhams through subscriptions
A growing legion of UAE shoppers are embracing the subscription retail model as they seek better value and convenience
When Toni Harrison began wearing contact lenses at the age of 19, she didn’t anticipate how much of her income would be absorbed by her eyewear needs.
Now aged 35, the Briton believes she has since handed over the equivalent of the cost of a regular new family saloon car.
“It’s pretty scary,” says Ms Harrison, who works for an airline as first class cabin crew. “If I attempted to total up how much I have spent on lenses… easily over Dh75,000.”
Part of that is down to where Ms Harrison shopped for disposable daily lenses. A Dubai resident for almost nine years, she bought from local opticians, spending on average Dh400 to Dh500 a month.
Not every consumer is programmed to question pricing … but we did some digging and it was apparent that contact lenses were grossly over-priced
Charles Wright, co-founder, Hopi
Earlier this year, she spotted an Instagram advert by Hopi, a Dubai start-up offering her “high-quality and moisturising” lenses at a significantly cheaper price.
She did a Dh100 one-month trial and has remained a subscriber to the service.
“It was during the lockdown period [that] they offered free home delivery – it was perfect for me.
“The lenses are comfortable, zero dryness, a must especially for my job, and I’m saving Dh200-300 a month,” adds Ms Harrison, who is putting that cash towards a distant learning degree course.
She is part of a growing legion of shoppers who have embraced direct-to-consumer, subscription-based or recurring plan shopping during the Covid-19 stay-home restrictions.
A popular trading model for years in the US, UAE firms like Hopi are increasingly launching with the “no middleman” format at their core, serving both appetite for better value and convenience.
Founders Kristian Stinson and Charles Wright resented “spending a fortune” on contact lenses and sourced cheaper premium alternatives from Taiwan, and gave them on-trend branding.
“I’ve only started wearing lenses for three or four years and was shocked at how expensive they were,” says Mr Wright.
“Not every consumer is programmed to question pricing … but we did some digging and it was apparent that they were grossly overpriced; it’s a monopoly market controlled by big pharma companies.”
Typically, he says, customers would spend Dh330 a month on in-store, non-discounted, major brand contacts, compared to Hopi’s 45 per cent discount, which is Dh180 a month or a total of Dh1,600 in savings a year.
“For some people, that’s a flight home,” says Mr Stinson, who credits the “lean, agile” nature of Hopi’s business that allowed them to operate from anywhere and avoid those “insane mark-ups”.
While peak pandemic directives meant many contact lens wearers reverted to spectacles, eschewing the subscription option, Hopi boosted business as value-seekers with increased screen time found them online and made bulk purchases.
“We adapted with the environment,” says Mr Stinson. “The crisis has made consumers re-evaluate how they shop, who they buy from and what they’re prepared to pay. It has thrown a spotlight on the direct-to-consumer business model and Hopi is benefiting.”
It now has about 1,200 monthly subscribers, with trade growing 200 per cent since Hopi's launch in January.
This demand for more attractive pricing is one reaction to Covid-19’s economic impact. The reality or prospect of income shrinkage has prompted many to seek better value when buying necessities – and relative luxuries.
The latter places Preeta Sharma’s Hand-Tied – a sustainable floral subscription service she co-founded in December – in a favourable position.
It delivers boxed fresh flowers to homes and businesses, embracing the notion that they shouldn’t be simply special occasion purchases. Hand-Tied’s operating model enables it to make and share savings.
“In the traditional flower business, waste is a huge problem due to lack of predictability,” she says.
“Recurring plans or subscription-based plans lead to predictability … we work on data and trends and procure the exact number of flowers to ship to customers.
“This leads to savings in the cost of goods because there is hardly any wastage of flowers or packaging material. We are able to reduce a lot of the traditional costs large flower shops have to deal with.
“We don’t have a fancy boutique or office, we literally work out of a small warehouse and provide high discounts for longer-term subscriptions.”
That can mean average customer savings of 10 per cent to 25 per cent, although Ms Sharma also highlights “the value we provide”.
“We are not in the business to sell you six to 10 roses for the typical Dh150-200 it retails for,” she says.
Subscription-based plans lead to predictability … we work on data and procure the exact number of flowers to ship to customers
Preeta Sharma, founder, Hand-Tied
“We asked ourselves, ‘What's special about a pre-made bouquet of roses that costs much more than it really should’…instead, we ship you about double that quantity of unique blooms and foliage that puts you at the centre of the [arrangement] creation.”
Disappointed by supermarket-bought blooms, Abu Dhabi teacher Sarah Jane Jones subscribed to Hand-Tied in December.
“I could easily find myself spending up to Dh150 per week in the supermarket and within a couple of days, the heads had fallen,” says the British mum of two.
“I love flowers, something I missed so much since moving to the UAE as apart from very expensive bouquets you can have delivered, I just never found flowers to the same standard and variety you get back home.”
Hand-Tied is her first experience of a UAE subscription business, and Ms Jones, 36, was “excited that such a concept had finally arrived in the UAE.
“It's easy to get signed up to something because of great reviews, but when it arrives, you are left feeling disappointed,” she adds.
“Hand-tied, perhaps, has given me confidence to try and support other local businesses.”
Haul In One launched in February and delivers monthly personalised boxes of beauty products to subscribers.
“In the Middle East, beauty regimes are an intrinsic component of our daily routine,” says managing director Prachee Wadhawan.
“However, in recent years, and especially this year, with most of us remaining indoors, the emphasis on delivery has seen a notable surge.”
Once a customer completes their “beauty profile”, Haul In One staff curate products for their monthly “haul”.
Subscription and delivery models have never had a shinier moment in the sun
Prachee Wadhawan, managing director, Haul In One
The founder says the service removes some of the cost risk of paying retail prices to try a product someone “may or may not fall in love with”.
“Some companies thrive on providing a small sample of their products as a way of getting customer buy-in,” says Ms Wadhawan.
“While this is great in some cases, the sample typically lasts one to two uses, and with current market conditions, not everyone is willing to splurge on expensive products that may not work for them beyond two uses.
“Haul allows women to refresh their current routines and also try new, full-size products for a fraction of retail prices and directly, in a tamper-proof, sanitised package.”
More than 200 women across the Emirates, typically “metropolitan woman aged from 25 to 55 years”, have subscribed to the service, which costs from Dh247.
“We are able to save our customers a sizeable sum every month because the box contains five to seven full-size products, featuring a minimum of two luxury brands and a minimum retail value of Dh450,” says Ms Wadhawan, confirming Haul In One endeavours to ensure partners and suppliers also gain from this alliance.
“We have been fortunate in partnering with like-minded brands and businesses … this has greatly boosted our ability to create and pass on savings to customers.”
With the pandemic striking soon after its launch, Ms Wadhawan says Haul In One overcame initial “hesitation to order anything from outside” to double subscriber numbers every month.
“Subscription and delivery models have never had a shinier moment in the sun,” adds Ms Wadhawan. “More people are staying indoors, so even segments that traditionally relied on physical stores are finding new ways to send products to their customers.”
Ms Sharma agrees. “This has indeed been the trend over the past five to 10 years in the region with an emerging sector of subscription boxes focused on beauty, baby products, clothing … we expect this trend to grow, given the mobility limitations Covid has imposed, as well as an increase in e-commerce sales and awareness,” adds the Hand-Tied co-founder.
“However, a subscription model requires companies such as ours to be very closely tuned with the customer and really understand what they are uniquely looking for while being able to build at scale.”
Updated: September 24, 2020 11:55 AM