Amazon is seeking solutions to address challenges posed by the Middle East's extreme heat on electric vehicles, as it accelerates its plans to use them for its UAE delivery fleet, a senior regional executive has said.
The world's largest online marketplace, which in 2022 committed to use 100,000 EVs for its last-mile deliveries globally by 2030, is “closely” coordinating with UAE authorities, as well as its other partners, Prashant Saran, director of operations at Amazon Turkey, Middle East and Africa, told The National.
“In this region, because of the extreme heat, there is not yet a scalable, fully-proven commercial electric vehicle model. Right now that is a challenge because of the temperature and the batteries,” Mr Saran said ahead of the fifth Amazon Prime Day in the UAE on July 16.
“But we see that as an opportunity. So, we are closely partnering with the government, with small and medium enterprises and original equipment manufacturers, as well as our delivery partners.”
Amazon convened them in a workshop late last year to look at “some of the challenges in this area and what can be done from a technology and policy perspective to be able to scale that up”, he said.
A timeline for the launch of the EV delivery fleet has yet to be determined, but the initiative is a “work in progress” that Amazon is “constantly piloting and testing”, Mr Saran said.
“We are already working with delivery service partners who are using electric scooters to deliver in some of the dense areas … we are extremely committed to this and the share of electric vehicles for us will keep on increasing over a bit of time,” he said.
An all-EV fleet will be able to help Amazon achieve its plans to achieve net-zero operations by 2040, as the world moves towards more sustainable forms of transport.
The Seattle-based company also cofounded The Climate Pledge in 2019, which is a commitment for organisations to become net-zero carbon by 2040 – a decade ahead of the Paris Agreement’s goal in 2050.
Amazon began using electric delivery vehicles from fellow US company Rivian in 2022. Currently, it has about 13,500 EVs operating on US roads and more than 1,300 in Europe.
In addition to the 100,000 Rivian vans it has pledged, Amazon has used more than 15 EV models of electric vehicles on the road, including delivery vehicles, e-cargo bikes and e-rickshaws, to “test and learn” across the US, the EU and India.
An EV fleet would help operational efficiency in the UAE – which has ramped up efforts to promote and put more EVs on its roads – and the Middle East, where Amazon has made significant investments: it has two major logistics hubs in Abu Dhabi and Dubai, and has boosted its capacity in the Emirates and Saudi Arabia by 70 per cent and 100 per cent, respectively.
“We are here for the long term and we are here to keep on raising the bar … for investments in infrastructure,” Mr Saran said.
Meanwhile, Amazon's fifth Prime Day in the UAE is expected to build on last year's, as more consumers lean towards more budget-friendly deals that influence their purchase decisions, said Stefano Martinelli, vice president of Amazon in the UAE and Saudi Arabia.
Globally, the 2023 edition of Amazon's biggest shopping event was the biggest ever in its history, with 375 million items sold and $2.5 billion saved by Prime customers, he said.
Amazon data shows that the number of UAE consumers shopping online each week has doubled, “giving us the confidence that there is a healthy growth in e-commerce”, Mr Martinelli told The National.
“Selection, pricing and convenience are still the three pillars that every customer wants over time.”
The UAE's e-commerce market is expected to reach $9.2 billion in 2026, up nearly 92 per cent from 2021, the Dubai Chamber of Commerce said in 2022.
The study, based on data from Euromonitor, also projected that the share of e-commerce in total retail sales will reach 12.6 per cent by 2026.
Growth momentum within the UAE’s e-commerce sector is being supported by rising demand for online shopping and steady investment flows in the sector’s infrastructure, the study said.
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Other ways to buy used products in the UAE
UAE insurance firm Al Wathba National Insurance Company (AWNIC) last year launched an e-commerce website with a facility enabling users to buy car wrecks.
Bidders and potential buyers register on the online salvage car auction portal to view vehicles, review condition reports, or arrange physical surveys, and then start bidding for motors they plan to restore or harvest for parts.
Physical salvage car auctions are a common method for insurers around the world to move on heavily damaged vehicles, but AWNIC is one of the few UAE insurers to offer such services online.
For cars and less sizeable items such as bicycles and furniture, Dubizzle is arguably the best-known marketplace for pre-loved.
Founded in 2005, in recent years it has been joined by a plethora of Facebook community pages for shifting used goods, including Abu Dhabi Marketplace, Flea Market UAE and Arabian Ranches Souq Market while sites such as The Luxury Closet and Riot deal largely in second-hand fashion.
At the high-end of the pre-used spectrum, resellers such as Timepiece360.ae, WatchBox Middle East and Watches Market Dubai deal in authenticated second-hand luxury timepieces from brands such as Rolex, Hublot and Tag Heuer, with a warranty.
UPI facts
More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions
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UAE currency: the story behind the money in your pockets
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Five famous companies founded by teens
There are numerous success stories of teen businesses that were created in college dorm rooms and other modest circumstances. Below are some of the most recognisable names in the industry:
- Facebook: Mark Zuckerberg and his friends started Facebook when he was a 19-year-old Harvard undergraduate.
- Dell: When Michael Dell was an undergraduate student at Texas University in 1984, he started upgrading computers for profit. He starting working full-time on his business when he was 19. Eventually, his company became the Dell Computer Corporation and then Dell Inc.
- Subway: Fred DeLuca opened the first Subway restaurant when he was 17. In 1965, Mr DeLuca needed extra money for college, so he decided to open his own business. Peter Buck, a family friend, lent him $1,000 and together, they opened Pete’s Super Submarines. A few years later, the company was rebranded and called Subway.
- Mashable: In 2005, Pete Cashmore created Mashable in Scotland when he was a teenager. The site was then a technology blog. Over the next few decades, Mr Cashmore has turned Mashable into a global media company.
- Oculus VR: Palmer Luckey founded Oculus VR in June 2012, when he was 19. In August that year, Oculus launched its Kickstarter campaign and raised more than $1 million in three days. Facebook bought Oculus for $2 billion two years later.
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Tips to keep your car cool
- Place a sun reflector in your windshield when not driving
- Park in shaded or covered areas
- Add tint to windows
- Wrap your car to change the exterior colour
- Pick light interiors - choose colours such as beige and cream for seats and dashboard furniture
- Avoid leather interiors as these absorb more heat
Russia's Muslim Heartlands
Dominic Rubin, Oxford
