UAE internet shopping drops but still tops survey

DUBAI // Online spending across the Emirates fell last year, but consumers here are still outspending buyers in the Asia-Pacific, Middle East and Africa. UAE residents who shopped online spent an average of US$1,048 (Dh3,849) in the December quarter last year, down from US$1,193 in the same period a year earlier, data from the latest MasterCard survey of online shopping showed. But this was far ahead of the second-biggest spender, Singapore, where the average online shopper spent $779 over the same three months. The average across all 14 countries surveyed was $660, down from $667 the year before.

Laurent-Patrick Gally, a retail analyst at Shuaa Capital, said the drop in spending was probably caused by consumer caution after the economic downturn, but was also influenced by online price reductions. "People might have been more careful," Mr Gally said. "And when they spend, they wait for the right bargain opportunity." Another possible factor is that many credit card holders in the UAE had their limits reduced last year, as banks aimed to reduce their liabilities, he said.

MasterCard declined to comment. The fall in online spending came as more retail start-ups launched their online shopping concepts or expanded existing online offerings. Nahel.com and emirates avenue.com are two general retailing websites that have recently entered the market, and QuickDubai.com recently extended its reach to QuickAbuDhabi.com. Jashanmal launched a website for its bookstores last month, one of the few brick-and-mortar retailers to take its goods online. Jashanmal is testing the waters with the book e-commerce site before taking its other stores on to the Web.

Retailers say that UAE residents are becoming more comfortable with shopping online, and the MasterCard survey shows they are shopping more often - 2.7 times a month in the three-month period to December compared with 2.1 per cent a year earlier. Still, just 52 per cent of UAE shoppers said it was convenient to shop online in the final quarter of last year, up from 47 per cent in the year before, but below the average of 78 per cent in the countries surveyed.

Sixty-seven per cent of UAE residents said they were deterred from shopping online by uncertainty that the transactions were secure. The average across all the countries surveyed was 59 per cent. Because of this reluctance, most shopping transactions on UAE websites are for cash on delivery, retailers say. But the relatively high spending indicates that if this concern can be overcome, there is a market to be tapped, said Saeid Hejazi, the managing director of Nahel.com.

Mr Hejazi believes that many transactions involve airline ticket purchases, which customers are more comfortable executing online with credit cards. "For us and e-commerce websites, this is great news," he said. "If they are willing to buy tickets online, they are willing to spend on the internet. We just want them to trust us like they trust the airline." Mr Gally said there was a market available "for whoever can come up with credible offering on the internet, that is updated regularly, and that gives confidence to the consumer that what they're doing or about to do is secure and safe".