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How to start an ECommerce business in Dubai

Global Media Insight – the leading Dubai based web development company has published promising information on the internet and social media statistics of the UAE. According to the information published on the website, the total population of the UAE is 9.61 million for the year 2019. And out of 9.61 million, 9.52 million are active social media users. Around 8.8 million users access social media websites via mobile phone.

Another interesting statistic shared on the website is about social media penetration in the UAE for the year 2019. 82% of the total population, that is, 7.88 million are Facebook users. 82% have access to YouTube. 61% of the total population are Instagram users. Next comes social media websites like Twitter, LinkedIn, Pinterest and Tumblr respectively in the decreasing order of penetration. A 1.5% growth rate was recorded in the increase in social media users compared to last year.

UAE has become one of the fastest-growing E-Commerce hubs in the global context. There are multiple reasons for this transformation. Some of the major reasons are listed below.

1. Increased online penetration

Based on the statistics published by the Global Media Insights, a UAE resident spends close to 8 hours per day on the internet. Another interesting observation is that social media consumes 2 hours and 59 minutes of an Emirati per day. The internet penetration of the UAE is considered to be 99% and this means that almost the entire population has access to the internet. Out of the 99%, 85% have conducted a product-related search on the internet. In a month’s duration, 91% have accessed a retail website and the percentage of users who conducted an internet purchase is 63%. Another interesting fact is that the number of users who conducted an online purchase via a desktop is almost the same as those via mobiles.

2. Proactive, Business-friendly Government

The UAE government gives the highest precedence to E-Commerce and cashless transactions. The relentless government support on matters related to a cashless economy is worth-mentioning. This has served as a catalyst in the transformation of UAE into a digital-friendly market. An initiative named “Paperless” is listed in the Smart Dubai 2021 Project. This initiative is tailored to promote digitization by completely avoiding the use of paper for all government transactions.

3. Millennial influence

A considerable majority of the population of the UAE comprises of the millennials. The millennials who are in their 20s and 30s are attached to the digital world or make use of various digital platforms to accomplish online shopping-related tasks. This particular age-groups are active social media users and would like to connect over the internet and perform various online transactions.

4. World-class infrastructure and logistics

Dubai’s world-class logistics infrastructure have an integral role in serving the E-Commerce market. The Jebel Ali Port (largest in the middle-east) is well known for its immense logistics capabilities. The Dubai International Airport serves as a gateway airport that connects the west and the east. It also acts as a trading hub between Africa and Europe or Asia.

5. E-commerce companies and online payment services

2014 to 2018 marked a considerable rise in the growth rate of the E-Commerce market in the UAE. The largest E-Commerce website in dubai like Souq.com has a huge influence on the online purchase patterns of the people. Wadi.com, Awok.com are the other major E-Commerce players that operate in the UAE. The online payment gateways like Telr, PayFort and Checkout have significantly helped the growth of E-Commerce market in the UAE.

6. The Boom in the Technology sector

The last 5 years witnessed a significant increase in the launch of startup firms that deal with Big data, E-Commerce, and Artificial Intelligence. This has made a significant improvement in providing a safer and easier online experience to the providers as well as consumers. As more and more people depend on technology to get things done in the day to day life, it makes a lot of sense to take advantage of the same in the retail business as well. The right combination of Artificial Intelligence and Remarketing strategies can help e-commerce providers to target the right audience and present the products of their choice without having them to search for what they need .

How to Start an ECommerce Business in Dubai

The major requirements connected with setting up an E-Commerce business in Dubai are as follows:

  1. Trade license – depending on the jurisdiction, (mainland or free zone) a valid trade license is required to operate the E-Commerce company in Dubai, UAE. Mainland license is issued by the Department of Economic Development of the concerned Emirate. Free zone license is issued by the concerned Free zone authority.
  2. A registered office – It is not mandatory to own registered office space to set up an E-Commerce venture in the UAE mainland. Free zone rules regarding E-Commerce business varies with Free zone jurisdictions. A free zone named Dubai CommerCity operates in Dubai for the promotion of E-Commerce trade. Some experienced business setup consultants in UAE provide all assistance to set up an eCommerce business successfully.
  3. Creating a website – Since the business focuses on online customers, a fully-functional and well-equipped website comes in handy. When it comes to website development, the domain name registration of your website is a must. In short, the domain name is the name of your website or it’s the web address of your business. Get in touch with Kiltons business consultant to get the most suitable domain name for your online venture within no time.
  4. Payment gateways – If you are dealing with an online retail store, payment gateways are necessary to perform online transactions. There are many credible payment gateway providers in the UAE. When it comes to payment gateway provider, the stability and success rate of the transactions cannot be compromised.
  5. Import/Export licenses – the business establishment has to be registered with the concerned port and customs department of the particular Emirate for importing a product and retailing the same online in the UAE market. The required customs duty is mandatory for all mainland imports. Free zone establishments are excused from customs duty if the sale of the product is confined to the Free zone jurisdiction or when it is an international export. The free zone business establishment needs to pay the customs duty if the sale of the product is focussed on the mainland. This can be accomplished only by designating an external distribution agent for the purpose.