Unilever joins hands with UAE firms to tap online market

Retailer has partenered with Souq.com and since July it has collaborated with the likes of Tejuri.com, and the online operations of Carrefour and Lulu.

Vaseline lotion is one of the products made by Unilever. Jeff Topping / The National

The Anglo Dutch retailer Unilever is partnering UAE firms to tap the growing online market.

Despite the easy accessibility of its 25-brand products across the country, Unilever has joined hands with Souq.com, an online retailer. Since July Unilever has collaborated with the likes of Tejuri.com, and the online operations of Carrefour and Lulu.

It expects to partner six more firms next year, including e-commerce companies and brick-and-mortar stores with an online presence.

Although all of its products are available online, Unilever expects its online sales to be skewed towards personal care products, which are only available as packages online.

Mizanur Rashid, a customer marketing director at Unilever Gulf, said the take-up of e-commerce in the Middle East would rise over time, as it was a growing global phenomenon.

“The Arabian Gulf, in particular, has the highest internet penetration in the world, and the ground is extremely fertile for e-commerce to flourish. If we do not come in now, somebody else will, and we want to to remain ahead of the curve,” he said.

The online commerce market in the Middle East and North Africa is expected to reach US$12.8 billion next year and $15bn by 2015, according to a report in September by Paypal, an online payment facilitator. The report covered Saudi Arabia, the UAE and Qatar.

“This growth was driven by a massive jump in the Middle East’s online commerce population, as well as a flood of local retailers coming online and offering local consumers what they could only have found outside of the region before,” the report said.

Mr Rashid said about 5 per cent of the UAE’s retail sales would be via the internet by 2020, with electronic products, clothing and high-end consumer goods accounting for much of the sales.

“We want to have more than a fair share of that market, at least more than 1 per cent of the total, given that we do not sell electronics or apparel,” he said.

Travel bookings topped last year’s online sales categories, followed by consumer electronics, computers, jewellery and watches, event tickets, sports equipment, car parts and household products.

Mr Rashid said Unilever was a “tough competitor” in the UAE’s market for household products, which included fabric cleaning and conditioning products.

Although the PayPal report said security risks – such as payment fraud, non-delivery or counterfeiting – were the top concern among online buyers, Mr Rashid said he did not view it as a major barrier to drawing online shoppers.

“A major barrier is people go out for shopping, to eat out, and have a quality time with family and friends, and shopping online is not retail-tainment,” he said. “What we will try to do for the next couple of years is to get more and more consumers into e-shopping for products on which they seek advice and solutions.”

The prices of the products online vary, retailers say.

Ronaldo Mouchawar, the chief executive at Souq.com, said the online prices of healthcare, home and beauty products could be 10 to 30 per cent lower than those at physical stores. His company carries 14 brands of Unilever products.

He added that electronic products cost 7 to 10 per cent less on Souq.com, an eight-year-old e-commerce platform that claims to have a 52 per cent share of the UAE’s online retail market.

Unilever’s Mr Rashid said his company was expecting to introduce its products online to Saudi Arabia and Kuwait in the first quarter of next year.

“As soon as the [e-retailers] can supply outside, we would like to go outside the Gulf,” he said.

Unilever’s target for online sales was “minuscule at this time”, he added, declining to give an investment figure for the project.