Dubai: The retail industry in the UAE is slow to adopt ecommerce, according to industry experts.
Many retailers are not embracing ecommerce for a number of reasons, such as challenges in delivering goods and being discouraged by the failure of other companies in setting up ecommerce sites, said Rammohan Nair, director of strategic accounts for the Middle East and India at Retail Pro, a global retail management software company.
“The addressing system that we have in Dubai is not easy… also, there have been players in the market that have had high expectations but did not meet them. There are bad experiences that have deterred people,” he said on the sidelines of an event organised by Smart Stores Expo in Dubai on Monday.
He also pointed out that some franchisees in the country are not allowed to set up an ecommerce site.
“The big retailers are franchisees and certain franchisee business agreements don’t allow the franchisee to have their own ecommerce sites,” he said, adding that while consumers in the UAE are buying more online, many still prefer to shop at brick and mortar stores.
“Traditionally here, shopping malls have been a place that people visit… visiting a shopping mall in this part of the world is a part of everyone’s life,” he said.
Colin Beaton, managing director of Limelight Creative Services, a retail consultancy in Dubai, said that consumers’ concerns about cyber security is another reason why retailers are slow to adopt ecommerce.
“The UAE is an early adopter of technology for consumer goods. Ecommerce [adoption] is slower here than in some countries,” he said.
The ecommerce market in the Middle East and North Africa is valued at $15 billion, according to Nair. The number of ecommerce users in the region is 90 million and only 15 per cent of businesses have an online presence, he said.
“In the GCC [Gulf Cooperation Council] … half of internet users purchase something on the web at least once [a month],” he added.
On his outlook for the local retail industry, Nair said that brick and mortar “is here to stay” and that ecommerce will still be “complimentary to the shopping experience.”
“[Ecommerce ] is where people learn more about a product or where should they go and buy it,” he said.