E-Commerce is one of the fastest growing segments of the economy in the UAE. Research shows that 60 percent of UAE residents make online purchases on a regular basis. The amount of people spend tends to be higher when compared to regional and international markets. The average amount of a single e-commerce transaction in the UAE is above $300 and if you contrast this to Saudi residents who spend $90, and those in France who spend $94, you can see the attraction of the market.
UAE Duty-Free eCommerce Hubs
The UAE government is encouraging the development of purpose-built duty-free e-commerce hubs. Participants in such schemes include UPS, Economic Zones World (EZW), Dubai Customs, MasterCard, Aramex, du, Dubai Trade, ENBD.
The authorities are keen to work closely with businesses to encourage the growth of e-Commerce.
It has been estimated that by 2020, the UAE e-Commerce sector will be worth $17.8bn with an expectation of uplift in 2019 as Dubai prepares to host the World Expo in 2020.
Choosing the Best Jurisdiction
As far as business registration, you have several options as to the incorporation of your firm. Several free zones provide specific licenses for e-Commerce and have distributors onsite to facilitate the delivery of products to consumers.
All free zone based companies need to work with local distributors as they are not allowed to ship goods directly to consumers in the UAE.
The benefits of setting up in a free zone are that you retain 100% ownership of the business and can seek to minimize initial set up costs by selecting an affordable jurisdiction.
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DED License (Alternative to Free Zone)
The alternative to free zone incorporation is to get a local mainland business license via the Dubai Department of Economic Development (DED). You will require a local partner which we can facilitate in acquiring if you need one.
The benefits of getting a local license are that you do not have to depend on external distributors for the delivery of your products and you have the capability of acquiring affordable warehousing space within Dubai itself.
It’s not uncommon for many e-Commerce businesses to start from a free zone and then shift to a local mainland business license as their business expands.
Your eCommerce Website
It would be an understatement to say that your business is largely dependent on your website. You will need to evaluate the different e-Commerce frameworks and their limitations with scalability, user-friendliness, mobile usability, ability to cater to multiple languages and payment platforms.
Setting up Secure Payment Gateway Options for online payments is critical for your website. You will need to be able to cater to all types of payment methods ranging from credit and debit cards, PayPal, Apple & Google Pay, bank transfers and many more. Cash on delivery is still quite popular with local shoppers, and you will need to consider what would be involved logistically for this method of payment.
Marketing
Search engines are the number one source of new website visitors. It’s always worth investing some time in dedicating resources to search engine optimization.
Similarly, there are lots of means to advertise online, you will need to ask yourself “who will be looking at this medium. And who will be my target demographic?”. Here the key element is to focus on potential customers who are interested in your products.
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Customer Service
Entrepreneurs are often caught off guard with elements of customer service for their online store. So What will you do if your customer returns the product?
What will be the return period for items in your online store? What are you going to do with returned products that have been used? How will you handle negative customer reviews? Will you have 24-hour support services, if so will this be outsourced?
It’s important to create customer service guidelines in advance of the launch of your business so you don’t have to make it up as you go along and can provide a standardized professional level of service from the first day. Just as happy customers increase brand awareness, unhappy customers can persuade others from giving your e-Commerce site a chance.
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Consult with Professionals
Long-term e-commerce success involves planning, patience, and persistence. Whether you need to know about website domain registration, help with getting a corporate bank account or tips on the Dubai market, having a professional consultant will certainly help.
Speak to one of the best business setup consultants in Dubai on how they can help you launch your e-Commerce business.
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