Consumers are increasingly moving away from bricks and mortar to online shops. Estimates from an eMarketer report show more and more people are buying from the comfort of their homes, with business-to-consumer e-commerce sales forecast to reach $1.5 trillion worldwide in 2014, an increase of 20 per cent over last year.
However, not all types of goods and services appeal to the virtual shopper. Nielsen’s August 2014 report on e-commerce, which collated responses from 30,000 individuals in 60 countries, found that online purchase intentions in the UAE have doubled since 2011 for many non-consumable categories.
Holiday and entertainment-related items attract the most number of clicks from consumers in the UAE, while certain products, including groceries and personal care items, remain underpenetrated by online stores. This simply means that many people in this market don’t want certain items delivered to their doorstep and they prefer to scour the shelves when they run out of supplies or their pantry is empty.
Nielsen’s survey showed that among the top categories, airline tickets are the most popular, with more than half (57 per cent) of the respondents in the UAE saying they intend to purchase tickets online in the next six months.
Holiday-related purchases claimed second place on the list, with 48 per cent of online shoppers saying they plan to purchase tours and hotel reservations online in the next six months.
Movies, performances, exhibitions and games occupied the third spot. About 43 per cent of the shoppers said they plan to buy event tickets using an online device in the next six months.
Arslan Ashraf, managing director for the Arabian peninsula at Nielsen, said holiday and entertainment-related categories are popular in the UAE because these categories don’t require “physical evaluation.”
“Purchasing airline tickets, tour, hotel reservations and event tickets online has proven to be a reliable and effective method for many UAE respondents. They can check immediately the availability and what they can choose from,” Ashraf told Gulf News. “Furthermore, online transactions make it easy to buy a ticket and it is also oftentimes cheaper.”
Buying of food supplies and other goods and services online is not as popular because many of them are readily available in the UAE. Besides, small-time grocery operators have set up shops in residential areas, and are just a phone call away.
According to Nielsen’s survey, only 18 per cent of the UAE respondents prefer to buy groceries online. A fewer number, 17 per cent, said they plan to purchase personal care items and baby supplies on the internet.
“The online market for buying groceries and other consumable products is smaller in the UAE. The hands-on buying nature and perishability of these goods limits the usefulness and practicality of buying online,” said Ashraf.
“Flexible shopping and delivery/pick-up options and smart promotions can facilitate sales online and improve satisfaction and loyalty.”
However, while the online market for buying groceries and other consumables are not as strong as non-consumable categories, they are starting to show promise.
Nielsen said that since 2011, online purchase intentions for the cosmetic category increased 5 percentage points to 19 per cent, groceries rose seven percentage points to 18 per cent and baby supplies jumped 9 percentage points to 17 per cent.
Among the products that UAE consumers don’t want delivered, hardcopy books are at the top of the list, with 55 per cent of the respondents saying they don’t intend to purchase these online.
Half of the respondents also don’t intend to purchase electronic equipment, television sets, cameras and other related items on the internet.
What UAE consumers are buying online (Percentage of respondents planning to buy the following on the internet)
Airline ticket/reservations: 57%
Tours/hotel reservations: 48%
Event tickets: 43%
Computer software (not downloaded): 35%
Mobile phones: 29%
Music (not downloaded): 26%
Videos/DVDs/games (not downloaded): 24%
Electronic equipment: 23%