There’s more bad news for the country’s embattled bricks-and-mortar retailers. Most of Dubai’s shoppers are now shopping regularly online and spending more than ever as they do it.
According to data compiled for the UAE Card Security Week by the Department of Economic Development (DED) and Visa, 56 per cent of consumers shop frequently online, making a purchase at least once a week – up from 39 per cent last year.
Meanwhile, the numbers of infrequent online purchasers – that is, people buying online less than once a month – has dropped from 20 per cent to 10 per cent of shoppers.
The average basket price is rising from Dh1,375 to Dh1,479, while more than one fifth of respondents spend more than Dh2,000 regularly.
Ronaldo Mouchawar, the chief executive of Souq.com, which was recently acquired by Amazon, said online sales growth has been startling. “We are growing at 50 per cent year-on-year in the UAE alone,” he said.
The research found that security issues surrounding the use of electronic payment and, therefore, the problems of cash on delivery (COD), were the key deterrent to growth in the sector.
“With the country’s e-commerce sector growing rapidly, UAE Card Security Week is an important and timely opportunity to educate shoppers about staying safe online,” said Mohammad Ali Rashed Lootah, the chief executive of commercial compliance and consumer protection for the DED.
He said the study highlighted the opportunities and the challenges.
“The sector’s continued growth now depends on the quality of the customer experience and the security of their transactions being maintained despite ever-increasing volumes of activity.”
The global WannaCry cyber attack over the weekend, affecting people in at least 99 countries, highlights the problem of securing electronic data.
“Those that were attacked were guilty of basic security errors,” said Neil Fernandes, the head of risk for Visa Mena. He said weak passwords and nonexistent firewalls were the main cause for such a breach. “I think people who are happy transacting online electronically will still be happy to transact and those that weren’t will be more wary. However, our system of ‘tokenisation’, which we offer in the UAE, makes hacked data useless because it only holds data that we create rather than account numbers or sensitive information.”
The research found that the region’s preference for COD has dropped to 22 per cent from 29 per cent of respondents. Many of the UAE’s e-commerce retailers see a rate of COD far higher than that. The luxury retailer Chalhoub Group believes the region’s reliance on COD with online sales is making the sector inefficient and costly, and limiting investment into it.
“Seventy-five per cent of our sales online are COD,” said Patrick Chalhoub, the co-chief executive of the Chalhoub Group, speaking recently at the launch of its Age of Digitalisation White Paper. “This has to change because it makes business very hard to transact. If people pay digitally they have made a commitment to purchase, if they wait till they pay they have made no commitment at all. Also the security of the delivery is compromised as cash is an insecure payment method.”
About a third of respondents said the barrier to online card payment was wanting to see the product first hand before making payment, while 42 per cent choose COD because it assures product delivery. Security concerns and a lack of trust towards product quality are cited as the biggest barriers. But sites that have been trading for several years are experiencing a conversion to electronic payment.
“Card transactions in the Mena region are growing tremendously,” said Ulugbek Yuldashev, the founder of Awok.com, an online electronics retailer founded in 2013.
“Our revenue through card transactions has increased almost three times and 30 per cent of our revenues are through card transactions. While card transactions are on the rise, COD is still one of the biggest payment methods and 65 to 70 per cent of our revenues are driven through COD. Awok is making a great effort to encourage customers to move towards card transactions. We have tied up with leading banks in UAE promotions, discounts on their credit cards and 0 per cent interest rate … upon purchase of high-value products.”
ascott@thenational.ae
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%3Cp%3ECompany%3A%20Zywa%3Cbr%3EStarted%3A%202021%3Cbr%3EFounders%3A%20Nuha%20Hashem%20and%20Alok%20Kumar%3Cbr%3EBased%3A%20UAE%3Cbr%3EIndustry%3A%20FinTech%3Cbr%3EFunding%20size%3A%20%243m%3Cbr%3ECompany%20valuation%3A%20%2430m%3C%2Fp%3E%0A
SPECS
%3Cp%3E%3Cstrong%3EEngine%3A%3C%2Fstrong%3E%201.5-litre%204-cylinder%3Cbr%3E%3Cstrong%3EPower%3A%3C%2Fstrong%3E%20101hp%3Cbr%3E%3Cstrong%3ETorque%3A%3C%2Fstrong%3E%20135Nm%3Cbr%3E%3Cstrong%3ETransmission%3C%2Fstrong%3E%3A%20Six-speed%20auto%3Cbr%3E%3Cstrong%3EPrice%3A%3C%2Fstrong%3E%20From%20Dh79%2C900%3Cbr%3E%3Cstrong%3EOn%20sale%3A%3C%2Fstrong%3E%20Now%3C%2Fp%3E%0A
The specs
Engine: 1.5-litre turbo
Power: 181hp
Torque: 230Nm
Transmission: 6-speed automatic
Starting price: Dh79,000
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Petrarch: Everywhere a Wanderer
Christopher Celenza,
Reaktion Books
How to protect yourself when air quality drops
Install an air filter in your home.
Close your windows and turn on the AC.
Shower or bath after being outside.
Wear a face mask.
Stay indoors when conditions are particularly poor.
If driving, turn your engine off when stationary.
Business Insights
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- SMEs with revenue below Dh3 million per annum can opt for transitional relief until 2026, treating them as having no taxable income.
- Larger entities have specific provisions for asset and liability movements, business restructuring, and handling foreign permanent establishments.
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The specs
Engine: 6.2-litre supercharged V8
Power: 712hp at 6,100rpm
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Transmission: 8-speed auto
Fuel consumption: 19.6 l/100km
Price: Dh380,000
On sale: now
SPECS
Engine: 4-litre V8 twin-turbo
Power: 630hp
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Nayanthara: Beyond The Fairy Tale
Starring: Nayanthara, Vignesh Shivan, Radhika Sarathkumar, Nagarjuna Akkineni
Director: Amith Krishnan
Rating: 3.5/5
The bio
Who inspires you?
I am in awe of the remarkable women in the Arab region, both big and small, pushing boundaries and becoming role models for generations. Emily Nasrallah was a writer, journalist, teacher and women’s rights activist
How do you relax?
Yoga relaxes me and helps me relieve tension, especially now when we’re practically chained to laptops and desks. I enjoy learning more about music and the history of famous music bands and genres.
What is favourite book?
The Perks of Being a Wallflower - I think I've read it more than 7 times
What is your favourite Arabic film?
Hala2 Lawen (Translation: Where Do We Go Now?) by Nadine Labaki
What is favourite English film?
Mamma Mia
Best piece of advice to someone looking for a career at Google?
If you’re interested in a career at Google, deep dive into the different career paths and pinpoint the space you want to join. When you know your space, you’re likely to identify the skills you need to develop.
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COMPANY PROFILE
Company name: Letstango.com
Started: June 2013
Founder: Alex Tchablakian
Based: Dubai
Industry: e-commerce
Initial investment: Dh10 million
Investors: Self-funded
Total customers: 300,000 unique customers every month
T20 WORLD CUP QUALIFIER
Results
UAE beat Nigeria by five wickets
Hong Kong beat Canada by 32 runs
Friday fixtures
10am, Tolerance Oval, Abu Dhabi – Ireland v Jersey
7.30pm, Zayed Cricket Stadium, Abu Dhabi – Canada v Oman
It's up to you to go green
Nils El Accad, chief executive and owner of Organic Foods and Café, says going green is about “lifestyle and attitude” rather than a “money change”; people need to plan ahead to fill water bottles in advance and take their own bags to the supermarket, he says.
“People always want someone else to do the work; it doesn’t work like that,” he adds. “The first step: you have to consciously make that decision and change.”
When he gets a takeaway, says Mr El Accad, he takes his own glass jars instead of accepting disposable aluminium containers, paper napkins and plastic tubs, cutlery and bags from restaurants.
He also plants his own crops and herbs at home and at the Sheikh Zayed store, from basil and rosemary to beans, squashes and papayas. “If you’re going to water anything, better it be tomatoes and cucumbers, something edible, than grass,” he says.
“All this throwaway plastic - cups, bottles, forks - has to go first,” says Mr El Accad, who has banned all disposable straws, whether plastic or even paper, from the café chain.
One of the latest changes he has implemented at his stores is to offer refills of liquid laundry detergent, to save plastic. The two brands Organic Foods stocks, Organic Larder and Sonnett, are both “triple-certified - you could eat the product”.
The Organic Larder detergent will soon be delivered in 200-litre metal oil drums before being decanted into 20-litre containers in-store.
Customers can refill their bottles at least 30 times before they start to degrade, he says. Organic Larder costs Dh35.75 for one litre and Dh62 for 2.75 litres and refills will cost 15 to 20 per cent less, Mr El Accad says.
But while there are savings to be had, going green tends to come with upfront costs and extra work and planning. Are we ready to refill bottles rather than throw them away? “You have to change,” says Mr El Accad. “I can only make it available.”
The specs: 2019 Jeep Wrangler
Price, base: Dh132,000
Engine: 3.6-litre V6
Gearbox: Eight-speed automatic
Power: 285hp @ 6,400rpm
Torque: 347Nm @ 4,100rpm
Fuel economy, combined: 9.6L to 10.3L / 100km
