How to Maximize E-Commerce Opportunities in a Post-Pandemic Era

Dubai CommerCity is a Business Reporter client.

The e-commerce market is set to witness continuous growth in volume over the next five years. The Middle East has been identified by studies as one of the regions most ready for digital transformation and is today one of the fastest-growing markets in the world.

The second “MEASA eCommerce Landscape: B2C Products Edition,” a report that provides a comprehensive overview of the e-commerce sector in the region, shows that e-commerce has experienced a significant leap during the Covid-19 pandemic, with the Gulf region witnessing a 214% year-on-year increase in cross-border online sales by mid-year 2020. The industry’s progress is expected to continue, with the value of the B2C e-commerce market growing to $148.5 billion in the Middle East, Africa and South Asia (MEASA) in 2022.

The GCC’s e-commerce market alone is expected to be worth roughly $50 billion by 2025.

What is driving this growth?

There are many key factors to consider. Firstly, there is huge latent demand in the region, as well as high internet use and mobile adoption. This is being driven by a young, internet-savvy population with high rates of social media usage compared with the other parts of the world. Increasing cross-border e-commerce, entrepreneurship and growing government support are also driving growth.

The pandemic has also played a key role in accelerating the growth of the e-commerce sector. Multinational companies and brands are focusing on innovative ways to engage their customers online. This will have a significant long-term impact, as it will be a game changer for the future of the retail sector.

The challenges

Some significant challenges need to be overcome.

Despite all the opportunities and growth, there is limited e-commerce penetration in the region compared to the rest of the world. There is also a relative lack of consumer awareness, in addition to limited payment solutions available. Many parts of MEASA face logistical challenges, customs duties and taxation, as well as limited product coverage.

We believe that some government and industry strategic actions need to be taken.

Firstly, we need to enhance e-commerce policies around customs duties, taxation and consumer protection. We need to address consumer awareness by building greater trust with them. We also need to offer better protection to the local e-commerce economy and have a dedicated e-commerce zone that fulfils business requirements, eases its operations and ensures regular engagement with financial institutions.

Offering a solution

The UAE’s vision aims to enable digital transformation and support the shift toward enhancing its operations through adapting the latest technologies. The government is playing a vital role in supporting the private and public sectors in digitalizing their operations—boosting the efficiency and reliability of their products.

E-commerce is one of the main sectors that falls in line with this vision. The UAE’s e-commerce sector has witnessed significant growth over recent years, and major projects have been developed to support the potential growth expected for this industry. These initiatives will help accelerate the growth positioning of the UAE and Dubai as the regional hub for e-commerce and a key contributor to the global online business.

Earlier this year, Dubai CommerCity began commercial operations, signaling an exciting new chapter for global e-commerce and trade. The free zone extends over an area of 2.1 million square feet and is backed by an investment of 3.2 billion dirhams. It will strengthen Dubai’s presence as the main regional center of global e-commerce, establishing zones that support economic diversification and smart transformation through attracting direct foreign investments in the sector.

At Dubai CommerCity, the first and leading dedicated e-commerce free zone in the MEASA region, we recognize the opportunities as well as the challenges and have studied the options available.

Dubai CommerCity offers a unique ecosystem and comprehensive solutions for businesses to run effectively and seamlessly. In addition to offering complete business setup and customs support, the free zone provides e-commerce strategy consulting, guidance on e-commerce regulations in the region and end-to-end logistics solutions, including warehousing and last-mile delivery. Organizations can also gain access to complete e-commerce platform solutions, digital marketing services and other support services.

Dubai CommerCity includes state-of-the-art offices, and with world-class infrastructure, the free zone provides flexible office sizes and scalable fulfilment centers, which offer various dedicated solutions for e-commerce businesses.

The high-tech features available will allow customers to establish and launch their businesses in the free zone efficiently and quickly. It also has logistical features that suit the needs of e-commerce companies and enhance their operating experience, in terms of infrastructure and proximity to Dubai International Airport and major UAE roads, making it easily accessible by land, air and seaports.

Dubai CommerCity will help realize the potential growth within the sector and drive innovation and progress in online, regional and global trade.

This is strategically important for the nation as the project works toward achieving the UAE’s objectives, including nurturing sustainable growth, creating greater economic diversification and driving the development of smart and connected technologies.

—Industry view from Dubai CommerCity

This article originally appeared on Business Reporter. Image credit: iStock id1265958242