Online retailers say sales and consumer confidence on rise

Is e-commerce set to boom in the UAE? Online retailers have enjoyed encouraging sales so far this year.

Going online to buy a tablet computer, air ticket or sun tan is increasingly becoming the norm for shoppers. istockphoto.com

Going online to buy a tablet computer, air ticket or sun tan is increasingly becoming the norm for shoppers, as internet retailers report strong growth in sales this year.

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"It's really started to boom," said Julien Pascual, the chief executive and founder of EmiratesAvenue.com, which sells a range of electronic goods and home appliances.

"In the last six months we have doubled the number of orders compared to last year."

Online retailers say an increasing awareness among consumers about websites and the availability of products, particularly electronics, has spurred shoppers to start clicking.

"Over the last few months, and for most of the year, e-commerce has definitely been growing," said Ronaldo Mouchawar, the chief executive of souq.com.

He believes that while sales growth among physical retailers is robust, the increase is now being outstripped by that of online players.

Consumers' confidence in shopping online has been growing as daily-deal websites have burst on to the UAE retail scene this year.

There are now about 20 websites offering discounted retail products and services such as restaurant meals, holiday breaks and spa tanning treatments.

Dan Stuart, the founder and chief executive of GoNabit, part of US-based LivingSocial, believes e-commerce has had to improve its offerings by focusing on three key areas: convenience, price and choice.

"You need to be giving customers at least two of these things," he said. "Historically, UAE shoppers have bought confidently from overseas websites but have not had compelling reasons or opportunities to buy from local or regional websites."

About 75 per cent of internet users now have the confidence to shop online, according to research conducted by GoNabit and YouGov Siraj, an increase of 18 percentage points compared with six months ago.

"People's mentality about going online is changing," said Mr Pascual. "Most of them were already buying online back in their home countries, but they were not thinking of checking online here."

Online retailers often offer goods at reduced prices because they can work on a lower cost base than a traditional retailer, which has to own or rent a fleet of stores.

Despite this advantage, e-commerce has struggled to take off on a huge scale in the UAE as consumers have been wary of using credit cards online and deliveries have been expensive.

But this is changing as websites now offer free delivery and still manage to sell products at a lower price than physical retailers.

JadoPado.com launched five months ago and has sold more than Dh1.5 million (US$408,000) of electronic goods and perfumes.

"E-commerce is still very nascent, but people are going online and purchasing [daily-deal] coupons and they might then move on to other products," said Omar Kassim, the founder of JadoPado.com.

According to the YouGov Siraj research, consumers are optimistic about shopping online in the future as 45 per cent say they will branch out and buy different kinds of products online.

YouGov Siraj asked a total 2,500 internet users on GoNabit's email database a broad range of e-commerce questions.