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B2B transactions in UAE expected to soar until 2010
The value of online business transactions in the UAE will be more than double every two years until 2010, according to a recent report.
- By Ivan Gale, Staff Reporter
- Published: 00:00 August 8, 2006
Dubai: The value of online business transactions in the UAE will be more than double every two years until 2010, according to a recent report.
Predicting a robust renaissance in the online business-to-business category following the dot-com flop of 2001, Dubai-based Madar Research is projecting a 55 per cent annual rise in B2B e-commerce in the UAE that will boost revenues from $4 billion last year to $36 billion in 2010.
The figures represent the value of purchases made on online marketplaces such as buildersv2b.com, petrocommerce.com, MEsteel.com and Tejari.com.
In its report on the UAE "Knowledge Economy," Madar said the gains would be driven from rising Internet use, an expansion of the UAE's e-government portal, and access to new markets brought on by globalisation. Cost savings from streamlined procurement processes would also contribute, it said.
"This growth far exceeds Madar Research's earlier expectations," said Abdul Kamli, president and research director of Madar Research. "This is an indicator of the UAE's integration in the global economy."
Chief among the reasons for this growth is the UAE business environment that encourages firms to enter into the e-procurement market, with important e-commerce and cyber-security laws passed in the UAE in 2002 and 2006.
Saddique Jamal, manager of business development at Builders Portal, which owns buildersv2b.com, said his firm has enjoyed a five to ten per cent growth in the last year. The Internet City-based firm has recorded over 70,000 purchase orders on its site worth in excess of $544 million since its launch five years ago.
It is targeting 20 to 25 per cent growth as it moves beyond the construction and manufacturing industry to cover the manufacturing industry and other markets with its new site starb2b.com. Owned by the ETA-Ascon Group, Builders Portal is also making moves into the business-to-consumer market with an online auto auction.
The government sector is a strong contributor to B2B e-commerce figures. Nearly a third of all transactions on the electronic marketplace Tejari.com were purchased by the government sector, according to the report. The government's Armed Forces procurement division, for example, saved around 40 per cent in annual expenditures by using Tejari.
Although Internet usage in the Middle East is low compared to elsewhere, the UAE is considered to have one of the highest rates in the region.
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