Plug Ins, the UAE-based electronics retailer, has joined the battle for a slice of the country’s e-commerce pie, launching a site that will eventually mirror its bricks and mortar offering.
The UAE’s e-commerce market was worth US$3 billion last year with airline travel registering the biggest market share, according to Plug Ins. The size of the region’s e-commerce market has doubled over the past two years, but its growth has slowed by half as the cash-dominated economy and a limited retail presence online restricts the industry, according to an Aramex report this month.
“We have just launched our e-commerce platform. It’s long overdue, we wanted to make sure we got it right,” said Omar Abushaban, the head of operations and e-commerce for Plug Ins. “We don’t do cash on delivery. The revenue isn’t particularly important for us, but it creates a visibility for us and allows people to browse with us without having to commit. E-commerce is a $3 billion market in the UAE, 23 per cent of that comes from airline travel and airlines don’t do cash on delivery. Electronics makes up the second segment after travel and that is why we focused on a similar model.”
The region’s e-commerce offerings are firmly in second place to malls and physical establishments, as retailing here is built around lifestyle and leisure. However, a presence in the virtual world is becoming more important.
“E-commerce is still nascent, so elsewhere it may be late but here it is timely,” said David Macadam, chief executive of the Middle East Council of Shopping Centres. “It’s important to have that element available. Setting up a website and online shopping is very expensive. It’s a significant investment and you have to build a whole new customer base because the people that shop online aren’t necessarily the people that shop in malls. It is a new revenue channel but you have to understand the channel and ensure it complements your bricks and mortar store to become clicks and mortar.”
Plug Ins may have joined the battle for the virtual world’s market share relatively late, however in the physical world it has recently invested significantly in redesigning its eight stores across the UAE to tap into the demand for mobile and wearable technology.
“The early indication suggests we are 70 per cent up on like-for-like sales in the same space, that’s only in the last week from a standing start,” said Sean Connor, the general manager of Plug Ins. “It’s been a significant investment so its nice to see a return immediately. The customer research we did says people have a huge appetite for mobiles so we needed to bring it them to the front of the shop. We have also seen about a 15 per cent growth in panel sales in the premium models, curved, and ultra-high definition, because, we think, of the World Cup.”
ascott@thenational.ae
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