Latching on to high potential for e-commerce in UAE

The economy, once overly dependent on oil, has now diversified and non-oil industries account for roughly 70% of its GDP, said Dinh Cong Tuan, general director of Vietgate Co.

Tuan made the statement at a recent meeting in Ho Chi Minh City discussing the potential for enlarged economic trade and cooperation of local companies in the UAE, at which he explained in detail some of the incentives.

The UAE’s proximity to other Gulf markets makes it an ideal market for those local companies desiring access to other Gulf Cooperation Council (GCC) countries and to North Africa, he said.

Additionally, the UAE is ranked 31st overall in the World Bank’s ease of doing business report.

Though English is widely spoken and accepted as the language of business, it could be a somewhat challenging market for local companies because underlying business documents are often required to also be in Arabic.

Other unique challenges, he said, include restrictions requiring a GCC national company to retain at least 51% ownership of any joint venture with a foreign stakeholder operating in the country.

However, there is a limited exception that allows for 100% foreign owned companies to operate in select free trade zones. Other positive factors include a well-established transport infrastructure, strong banking system, and stable political environment.

E-commerce has been growing in the UAE at a rate of over 20% annually, Tuan said and over 80% of the population are Internet users, and of this number over 15% shop online and around 10% do so on their mobile devices.

The UAE is the largest e-commerce market in the Middle East, with consumers spending in excess of US$2.9 billion online last year, which presents a tremendous opportunity for computer savvy local companies.

According to some widely published reports a staggering 83% of UAE residents had made a purchase online during the three months prior to the study being conducted and four out of five respondents said they were satisfied with the process.

Top categories for online spending included airlines, travel and hotels, followed by home appliances and clothing.

Tuan said another major factor contributing to this growth is the young population of the UAE (71% of the population is under the age of 35) including educated and financially empowered young women.

Many of these ‘millennials’ are using their mobile phones to carry out online interactions and purchases. In fact, of those who are shopping online in the UAE, nearly a third are making purchases using a smart handheld device according to one study.

Vietgate Co is a leading independent public relations company in Vietnam that prides itself on being professional and proactive.

The company has offices in both Hanoi (head office) and Ho Chi Minh City and a team of 30 consultants on staff to support its clients – most of them multinational companies.