Dubai: The scenes of Black Friday are, by now, infamous: Fistfights over televisions, mile-long queues in the freezing cold, and the kinds of anarchy one would not normally associate with America’s small-town malls.
In the UAE, however, malls continue to play an important role in many peoples’ social lives, whilst e-commerce has yet to take off here in the same way as it has internationally.
Nevertheless, with the heavyweights of both physical and online retail squaring off in the UAE this past weekend, one of the key questions became: Were the malls losing ground to the online retailers, and if so, at what rate?
In 2016, the Amazon-owned online retailer Souq reportedly sold a record 1.2 million items throughout the course of its four-day sale in November, named White Friday.
Whilst the full results from this year’s sale are still trickling in, Souq told Gulf News that they were a big improvement on its already impressive 2016 results, describing them as “much better.”
Timed to coincide with the global Black Friday shopping bonanza, Souq has sought in recent years to introduce a local version of the infamous clearance sales.
Similarly, the Dubai Festivals and Retail Establishment (DFRE) earmarked the same weekend to host its Super Sale, slashing prices by up to 90 per cent across Dubai’s malls. DFRE could not be contacted before deadline for a comment.
Some analysts believe that the three-day Super Sale, organised by the government of Dubai, was timed intentionally by the mall operators to fend off any potential threat from the online retailers.
“According to our insights, the timing of the three-day super sale is chosen to compete against White Friday, since some of the prominent domestic players see e-commerce as big threat,” said Nikola Kosutic, head of research at Euromonitor International.
As the battle between online and offline heats up, continued Kosutic, “the trend of show-rooming is becoming more visible — many bargain hunters visit brick-and-mortar stores in order to see and feel the product and then go online (if the price is cheaper) to complete the transaction.”
Crucially, it is easier for online retailers to offer cheaper prices, due to the lack of overheads that burden brick and mortar stores.
“More brands are engaged with online sites. Even if they don’t have e-commerce capabilities, they can still be present through marketplaces [such as Souq or Noon],” said Omar Soudodi, managing director of Payfort, a Middle Eastern online payments solution.
These brands that rely on retailers and wholesalers to distribute their products now have the capability to reach the consumer right away.
“And this enables them to pass on savings to the customer, as they’re eliminating costs from the value chain,” Soudodi added. These costs included staff, rent and utilities.
“The customer will ultimately be the one that benefits,” he said.
Whilst data was not yet available from the malls, anecdotal reports suggested that while footfall was high at some top tier malls, it was not significantly greater than any other busy weekend.
E-commerce is becoming increasing popular throughout the region: It continues to register the fastest growth among all retail channels in the UAE, according to Euromonitor research.
With a value growth of 45 per cent in 2017, the e-commerce market is expected to reach Dh6.4 billion by the end of the year, the research firm said.
“E-commerce players in the country are continuously putting more effort into gaining consumer trust and building higher demand through attractive pricing,” noted Kosutic.
According to Paul Kenny, managing director of AYM Commerce and former Cobone founder, sales like White Friday are fuelling the growth of e-commerce in the region.
“You see a clear shift in public behaviour in the Middle East with consumers trusting shopping online more and more,” he said in an email to Gulf News.
Major downside
One of the big downsides of ordering online is not being able to leave the store with your purchases in hand. This was especially the case for a number of Dubai residents who were told that their orders had been significantly delayed due to the amount of activity over the weekend.
“Due to the high White Friday Sale demand,” said an email to one Dubai resident from Souq that was shared with Gulf News, “your expected delivery is between Saturday, December 2, and Thursday, December 7.”
This represents a wait time of between a week, and two weeks.
Similarly, electronics store Sharaf DG was informing its customers over the weekend that orders made in the store would not be fulfilled for some time.
“Due to the overwhelming response on our offers, we are facing a challenge and would like to inform that the delivery of your unit is expected to happen tomorrow,” said an email from the retailer.
The order had been made last Thursday. The store later informed the customer that it would give them Dh50 in compensation for the delayed delivery.
