Select Page

Expanding your e-commerce Business to Dubai – 5 Important Considerations

Expanding your e-commerce Business to Dubai - 5 Important Considerations

Thinking about e-commerce business expansion to Dubai? Then you must consider a few points before moving ahead.

The Gulf region is set to grow exponentially within the next few years. UAE holds a special position amongst all the countries in the Middle East. It is one of the most prosperous countries in the region. The internet penetration rate in the UAE is 90%, which is considered to be one of the highest in the world.

UAE has also joined the smartphone revolution and 82 % of the total population are active mobile internet users. According to the Google consumer barometer, around 89 % of users reported that they access the internet every day, this makes UAE an ideal market for e-commerce.

The e-commerce sales in the emirate region are heavily skewed in favour of Dubai as the city houses 6 out of 10 of all online buyers.

According to an estimate, in Dubai, the e-commerce sector will contribute 12 billion AED to the local GDP by 2023. The executive council of Dubai is chalking out plans to attract foreign direct investment into the city with a specific focus on The e-commerce industry. The council aims to reduce the cost of doing business in e-commerce by 20% by reviewing the cost of storage, VAT, transportation as well as custom clearance fees. </>

Let us look at some of the most important considerations that you should focus on before taking a plunge in the vibrant e-commerce sector of Dubai.

Following points are generic but content should be focused on Dubai’s (UAE) e-commerce market….

Market Research

Before expanding your e-commerce business to Dubai, you must conduct thorough market research. This will include gaining knowledge about the demographics, assigning the market segments and identifying your target customers. By hiring the correct e-commerce partner, you will and sure that the market research is conducted properly. 

You need to first identify the market size for your particular segment. Suppose you are planning to open an e-commerce jewellery platform, then you need to identify the potential of the market before venturing out into Dubai. For example, 41% of the e-commerce market in Dubai is occupied by software products while fashion accessories account only for 14% of the market. It is evident that there is low penetration in the fashion accessories market and an e-commerce website catering to the fashion accessories demand has a huge potential to grow in Dubai’s e-commerce market.

Next process would be segmenting the market. You can segment the market based on various factors like geography, age, interests, gender, occupation and income groups. To succeed in market segmentation, you will need to define your ideal customer first. An ideal customer is a customer who has the highest propensity to buy your product or service directly. These are the customers who will be actively engaged with your brand and help in spreading the word about it. These will be our target customers and by conducting accurate market segmentation, you will be able to identify your target customers quickly.

On the competition front, Dubai presents a wonderful opportunity as the e-commerce market in this region is still taking baby steps. As the Government of Dubai is encouraging foreign direct investment, it is the perfect time for new entrants to foray into the e-commerce space of Dubai and make a name for themselves. Although this does not discount the need for a thorough competitive analysis which details the strengths and weaknesses of your present as well as potential competitors.

Assess Business Feasibility

You need to know about the licensing procedure for a business set up before you start your e-commerce business in Dubai. Setting up a business in Dubai is quick and easy and the business owners can choose to do business in a free zone or a non-free zone. Also, some authorities allow you to set up as a freelancer or professional services provider. To boost the e-commerce sales in particular industries or segments the UAE government has themed a number of free zones around these particular industries or segments. You can take advantage of these free zones in case your product falls under this category.

There are various themed free zones like the Dubai internet city, Dubai design district and Dubai media city which can help an e-commerce startup who is planning to set up shop in Dubai. You can take the help of an e-commerce consultant to know more about these free zones.

You need to look at your business model and choose the best method of licensing your business. Although Dubai has some of the lowest taxation rates for businesses in the world, it would be wise to know about the taxation rate for your specific e-commerce business.

Dubai is a prominent port in the international supply chain and you will find many supply chain and distribution partners who would help you in setting up your e-commerce business in Dubai.

As a large number of migrant labourers work in Dubai, you won’t find any hassle in hiring proper human resources here.

The Dubai infrastructure is considered to be one of the best in the world and you will find no dearth of world-class amenities in terms of office spaces.

Business Plan 

No business can succeed without a robust business plan. The same holds true for The e-commerce business and in order to make it successful you will need to chalk out a broad plan which will include points such as

  • How you intend to market your product
  • Who will be your target customers
  • How will you manage the operational part (logistics, customs clearance, accounting and human resources) of the business
  • How much capital will you need to invest and how will you reinvent the business proceeds

Form of Entity

You will need to identify the form of entity for doing business in Dubai. You can have a partnership firm or a franchise or you can have a private limited firm in Dubai.

In certain cases, you will be required by law to have a UAE based company as your partner before the authorities allow you to conduct business in Dubai. But this is not a cause of concern as there are many established business houses doing business in Dubai for years now. They are experienced businessmen who are adept at doing business in Dubai and will help you in making your e-commerce journey smooth in Dubai. An experienced retail e-commerce consulting firm can help you in identifying such a business partner and in finalizing the deal.

Understand that in Dubai, if you do not find a competent local partner then in certain cases you can also hire a local service agent who will help you in expanding e-commerce business to Dubai. A local service agent will help you in registering with the Government of UAE for a fixed annual fee and will help you in setting up your e-commerce business in Dubai. Identifying the correct LSA is the key here and an e-commerce business consultant can help you with this. 

Financial Forecasting and Analysis

Like any business, the e-commerce business also entails conducting thorough financial forecasting and analysis before going ahead. You need to calculate the cost of doing business in Dubai which can include the taxation rates, cost of setting up a business which includes hiring logistics and supply chain partners, leasing out office space as well as hiring new employees. After taking account of all these costs you will get to know about the profitability of doing e-commerce business in Dubai.

It would be prudent to consider all the above-mentioned factors before diving into the deep sea of e-commerce in Dubai. Dubai offers wonderful opportunities in terms of e-commerce businesses and there is much room for growth in this growing market. When you choose to do business in Dubai you will also gain access to the huge market of North Africa.

By taking the services of an expert e-commerce business consultant you will gain much-needed leverage, which will help you in mitigating all the obstacles that you can face while setting up an e-commerce store in Dubai. Grow your online store to Dubai and reap rich dividends of this wonderful business opportunity.

About us

Your Retail Coach (YRC) is a retail consulting and outsourcing company in India offering a wide range of services in retail offline, retail eCommerce and retail omnichannel catering to a multitude of industries.

 

PROCESS AUTOMATION

The idea of having Ecommerce Consultants on-board from the beginning itself points towards reducing the involvement of the promoters in daily operations. Ecommerce Businesses willing to be a brand reaping profits & sustaining the competition must ensure that most of their processes should be automated. The more the manual intervention, the more would be the errors.

In Ecommerce business, you get only 1 chance to impress the customer & if you mess up there, you lose the customer for long.

Process automation in respect to all the activities pertaining to customers from order receiving to order fulfilment is a must for a seamless experience for the customers.

Task Management is another grey area where most deadlines fail as 90% of the tasks are assigned manually & are forgotten, unheard, misunderstood or mistaken.

YRC Team of Ecommerce Management Consultants helps to make maximum of the processes system-driven to ensure minimalistic manual intervention.

VIDEOGRAPHY & PHOTOGRAPHY

No matter how good your product is, the customer would know only if it looks good.

Photography includes the following steps:

  • Cataloguing your products
  • Cataloguing your images
  • Backup your images (A few cloud storage solutions include Dropbox, Google Drive, Bitcasa, Apple’s Cloud Storage etc.)
  • Choose the right camera & lens (You may also outsource the photography to a third party agency)

DIGITAL MARKETING

Digital Marketing includes SEO & SMM. SEO i.e. Search Engine Optimization includes activities like back-linking, meta tags, blog-writing etc. to ensure your website ranks on the 1st page on Google Search.

Next comes SMM i.e. “Social Media Marketing” which as the name suggests including promoting your products on all the social media sites, email marketing, influencer marketing & several other BTL activities.

These activities are going to be recurring & would decide the traffic on the website, the conversions, whether the right target market is tapped, the likes, the views, the orders, the reviews & much more. YRCs Ecommerce Consultants create a budget for digital marketing right from pre-launch to launch & for each month thereafter.

Building digital marketing strategies in coordination with the agency, selecting them to signing them off would be the role of YRC.

This ensures seamless coordination, detailed interactions & desired execution as it is always advisable to work with a single agency than multiple of them.

IT INTEGRATION

Selection of the right software for smooth functioning of back-end operations right from production to webstore display would be suggested and integrated by YRC Team.

YRC’s Team defines SOPs of Product Movement, maps it with the locations & people. They then create a blueprint of all the features required in the software & help in shortlisting & selection.

IT Integration involves connecting your offline inventories with real-time online webstore so when a sale occurs, inventories get deducted real time across offline as well as online platforms.

This helps in accurate inventory management, maintaining the MOQs, re-order levels & achieving the optimum inventory levels.

Some popular software include unicommerce, viniculum for your front-end website management & Genisys for your entire back-end Purchase, Production, Accounting, Invoicing etc. management.

WAREHOUSE & LOGISTICS PLANNING

  • How many cities or countries you wish to sell in?
  • Where should your Warehouse be located?
  • Should you have one warehouse in each country or city?
  • Should you be having your own delivery team in your base city?
  • Would the 3rd party vendors be reliable? What happens when they lose or misplace your product during delivery?
  • How should I manage the logistics if my goods are coming from different countries?
  • How should the goods be stored and barcoded?
  • How much space do I require for warehouse?
  • I am sure several such questions must be haunting you while you think of starting your own fashion ecommerce brand.

 

At YRC, our warehousing and logistics experts can help you devise a strategy for all of the above mentioned queries and much more.

We design the layout of the Warehouse considering the inward, goods processing, software entry, barcoding, outward, goods return, scrap storage, goods stacking & much more.

Logistics route plan is devised considering the manufacturer to your warehouse and from there to last mile delivery locations.

UI & UX DESIGNING

This Step involves 03 distinct parts:

Part 1: Choosing the right Platform:

From several platforms available in the market right from Shopify to magento, woocommerce, prestoshop, wordpress etc. you must choose the one that fits best for your business

Part 2: UX Designing:

“UX” denotes User Experience, which if put in simple language is building the functional requirements of the website.

UX Designing includes designing the features required in the website, customer journey map, website features, the browsing features, navigation features, ecommerce order management process flow, checkout cart features, catalogue management, ecommerce payment system, cross selling features & much more.

“As per statistics, 68% of the customers abandon the carts before payment”

An interesting UX ensures the customer sticks on to the website for a longer time.

Part 3: UI Designing:

UI stands for User Interface, which means designing the look and feel of the website. UI includes using the right colours, elements and the entire aesthetics of the website.

A good User Interface ensures the user completes the task that he has come for. It navigates the user through the journey of the brand in the simplest but most effective way.

The UX designer maps out the bare bones of the user journey; the UI designer then fills it in with visual and interactive elements.

If User experience is the bare bone, user interface wraps it up with an attractive cape.

At YRC, our team if experts can help you develop the entire User Journey to ensure it is engaging!

SAMPLING & PRODUCTION

This step follows the “Designing” Phase, whether you have an in-house design team, freelance designers or an outsourced design company. It is one of the most exciting phases, as here you see your designs turning into products & your ideas turning into reality.

In most start-up cases, production is outsourced i.e. brands tie-up with the established manufacturers/ job-workers to get their products manufactured.

Sampling involves multiple 04 Stages, Fit-Sample, Prototype Sample, Pre-Production Sample & the Production Sample.

Prototype Sample is the first sample provided to the buyer. It can be in any fabric/ colour. This sample is just to understand whether the product design looks equally great in reality.

Fit Sample, as the name suggests is prepared to check the fit of the garment i.e. the various sizes, length, width etc.

Pre-production is made by the actual production line. Here the stitching quality and other aspects related to manufacturing are checked. This is the last stage where rejection can be accepted.

Production Sample is made before the production which is the replica of what is going to be finally produced.

Once you are through with all this, you are good to go ahead & get your goods manufactured.

PRODUCT DESIGNING / SOURCING

Product Designing or Sourcing is the heart of the Ecommerce Fashion Brand.

Product Designing / Sourcing can be done in several ways, as follows:

  • In-house Design Team
  • Freelance Designers
  • Outsourced Design Team
  • Ready Product Sourcing (From Manufacturer or Wholesaler)

At YRC, we evaluate your business strategy & business model to arrive at the decision, which of the above ways would be best-fit for your business. In certain cases, product sourcing may be a combination of the above.

These are the people who are going to build your brand! Whether they are the designers or merchandiser, your brand look is going to be in their hands.

If you are designing each garment from the scratch, the sourcing would play crucial role in developing design identity of your brand.

Sourcing includes fabric, trims, lining & all the raw material required to build the garment.

BRANDING

Branding is the “Look of the Brand”, right from logo to tagline, the colours used, the brand story, the brand communications on social media, the packaging & all the other aspects which speak directly or indirectly to the customers. Branding constitutes the look & feel of the brand & hence must be thoughtfully planned to match with the product that we are selling.

Branding must appeal to our target audience. Example : A golden colour logo depicting finesse, art, richness, premium, however beautiful it may be individually cannot go with a brand selling affordable kids wear products. So, your logo must be in-line with your brand positioning, whether you are an expensive brand or a luxury brand or a value for money brand, it must be depicted from your “Branding”.

It is an integral part to attract the target audience.

ORGANOGRAMS & SOP’s

Organogram is the “HR Blueprint” of the business which is created at the onset, to map out the team required across each function at various stages of the business. At the launch, only key people need to be got on board to ensure the project gets started & at this stage, all of them need to multi-task. Similarly, certain financial as well as operational goals are set for addition of the further team. Example, for the operations team, we hire 1 operations manager during the pre-launch phase & we add 1 more only when the business kicks-off & we reach a volume of selling more than 1000 pcs/ month or a turnover of more than 0.1 million USD.

SOPs are Standard Operating Procedures, a bible to run the entire organization right from Sales, Purchase, HR, Order receiving to Order fulfilment, Inventory Management, Accounts, Warehouse, Logistics, Supply Chain, Production & all the other relevant functions for the business. Business must be organized from its first day of operations; only then the tasks can be delegated.

At YRC, we design the organization structure, the processes, and approximate time taken to execute each process, job profile of every member within the organization, their KRAs, KPIs & the Reporting Structure.

CRITICAL PATHWAY

Critical Pathway Analysis (CPA), is a project management technique which cannot be overlooked while launching an ecommerce fashion brand. Brand launch process is cumbersome with multiple inter-dependent & time-bound tasks involved, which need to be tracked to ensure the project remains on track.

CPA outlines key tasks across the project, their turnaround time (TAT) & the dependencies of tasks upon each other. It identifies the sequence of tasks, their interdependent steps from inception to completion, their criticalities, and their dates of onset, target dates of completion along with the key responsible person for the respective activities. Critical Pathway helps in understanding the unimportant & not urgent tasks which may jeopardize the execution of the project because of an unexpected snag! It also maps out the potential bottlenecks which might be posed because of the dependencies of tasks upon each other & cases where the next task cannot be commenced before the completion of the previous one.

CPA detects the minimum & the maximum time involvement of a particular individual or team to execute the task, thereby arriving at the overall deadlines associated with the project.

At Your Retail Coach, we design the Critical Pathway & review it periodically to ensure the project is on track & the progress is measurable.

BUSINESS STRATEGY & BUSINESS PLAN

Business Strategy includes the vision, mission, goals, business model, business plan & strategy for all the functions within the organization.

Business Strategy is a well-defined plan that outlines who, what, where, why, how & when for the company; for example, who would be the target market, how to attract the target audience, when to launch new products, where to operate from, how to handle competitors, what would be the USP, what would be long term goal of the organization & several other answers to the 5Ws of Strategy.

Business Strategy aligns the organization towards a common goal. Business SWOT helps company to identify & overcome their weaknesses & focus to sharpen the strengths. Business strategy forecasts future risks and helps business in building skillsets to overcome the potential threats.

YRC’s Business Plan focuses on creating a “Blueprint” of the business, thereby deriving the feasibility of the concept & gauge whether the opportunity is lucrative to invest time, energy & effort. Business Plan creates cash flow understanding i.e. building inflow & outflow cash projections from Week zero to week 60 i.e. 05 year projection. Business Plan calculates the capital investment, operating costs, one-time costs, recurring costs & all the other numbers relevant to obtain the breakeven sales, return on investment, return on capital, internal rate of return & several other ratios. Business Plan is also one of the important requirements if you are targeting the “Investor Route”. Fund raising becomes extremely transparent & channelized. With business plan panned out clearly, the business will know until what point must it be stretched & where to stop, which reduces the probability of unplanned investments.

MARKET RESEARCH

Starting the concept of Ecommerce Fashion brand with Market Research ensures we get detailed understanding of the industry & this research report also acts as a social confirmation for your concept. Market Research helps in understanding the target locations, their population, potential online buyers for your product, competitors for each category, and top selling products of the competitors, competitors’ price range, offers & their responses & much more. Market Research helps in thorough understanding of your brand position as compared to our competitors. It helps in identifying gaps in the market, in your category along with the scope of the said product in the desired market. This will help in validation of your concept & prevents you from making the same mistakes as your fellow brands, eventually saving your time, energy & efforts. This phase is also a make or a break phase, as the market research study may at-times come up with some eye-popping numbers & statistics which might compel you to re-think on your product or category that you are planning to sell or alter your entire concept itself!! Market Research Reports analyse the competitors’ webstore for their traffic, conversion & sales. This is extremely valuable information to derive our inventory budgets & projections, which takes us to our next phase.