Like many business ideas, yougotagift.com started out as a way to solve a problem.
A year ago, Husain Makiya, one of the founders of Zawya.com, the finance portal which was sold to Thomson Reuters, was due to attend a friend’s birthday party.
"The birthday girl told us through Facebook don't bother to get me any gifts. Just get me gift cards for certain brands," he says.
But being a reluctant shopper, Mr Makiya searched for a way to buy the gift card over the internet, to save him a trip to a mall.
“There was no real option to do that, so the idea was triggered: why can’t I buy my gift cards online? That’s how the idea was initiated. There was nothing like that in the region,” says Mr Makiya.
So he and his colleague, Abed Bibi, decided to set up the first online mall for gift cards in the Middle East. The pair are partners in Honeybee Tech Ventures, a consumer internet incubator set up by the founders of Zawya.
Honeybee had already set up two successful internet ventures, Laimoon.com, a portal for jobs, courses and events, and Roundmenu.com, an online service which helps people find and book restaurants in Dubai, when it launched yougotagift.
The idea behind its latest venture was simple, says Mr Bibi.
“Today people can be connected on Facebook, Twitter and Google Plus and so many other places, so why not also make things more convenient for them and create something where they can send and make other people happy? They can do group gifting or send a gift without having the hassle of going to the car, parking in the mall and then buying a gift and maybe the person won’t like it.”
Yougotagift was launched on April 1 this year with just over 20 brands. Today it stands at around 45, including Virgin, Vox Cinema and Ferrari World, with a further 15 expected to be signed before the end of the year. Current partners include Azadea Group, Al-Futtaim Group, Majid Al Futtaim and Landmark. The company has also held talks with Chalhoub Group and Al Tayer.
The online venture is designed to appear like a mall, with each of the available stores displayed on the home page. Once they make their choice, customers can send the gift card to friends via email, text message or Facebook. Alternatively, they can print the gift card out and present it by hand.
The average transaction is about Dh450, according to Mr Makiya. It has sold more than 200 gift cards since the launch and traffic is up 70 per cent month-on-month, while transactions have been doubling in the past three months.
However, more people than ever in the UAE are shopping online, according to the research firm Euromonitor.
“By the end of 2013, internet retailing is expected to increase by 20 per cent in current value terms,” says Fatemah Sherif, a research analyst at Euromonitor International.
“Not only are consumers spending more time online, be it on their PC from home or work, smartphone, PC tablet, but they are also becoming very tech-savvy in the sense that they are more accustomed to making online transactions to fit with the more convenient lifestyle that they seek,” she adds.
However, a significant percentage of yougotagift’s customers are based outside the UAE.
“More than 20 per cent of our traffic or purchases have come from outside the UAE — UK, New Zealand, Saudi Arabia, Lebanon,” says Mr Makiya.
“We are an expat community with a lot of family and friends living abroad. And this is the most efficient, easiest way and most cost- effective way of sending a gift from any country in the world.”
And with ambitious plans to expand, some of its overseas customers may get the opportunity in the coming months to buy gift cards on yougotagift for friends in their own country. The company aims to open in Saudi Arabia in the first quarter of next year and it is looking at opportunities in Lebanon, Qatar and even farther afield.
“When we cofounded yougotagift, our vision was to be the online mall for gift cards in the Middle East. Probably later on it will go global, but now the online mall is where you can find your brands, put a nice personal message with nice pictures and in the future there are many ideas,” adds Mr Bibi.
“This can be expanded and we believe this is the way forward.”
gduncan@thenational.ae
Name: Peter Dicce
Title: Assistant dean of students and director of athletics
Favourite sport: soccer
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Favourite activity in Abu Dhabi: scuba diving in the Northern Emirates
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Directors: Carol Mansour and Muna Khalidi
Stars: Dr Ghassan Abu-Sittah
Rating: 4/5
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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