The UAE has long been at the crossroads of global markets, with intrepid travellers and traders converging on the Middle East to exchange goods and services from exotic herbs and spices to pearls and fine metals.
That tradition as a trading hub continues to this day – and while we might have seen the landscape transformed from streetside open souqs to state-of-the-art bonded warehouses, the fact remains that general trading is at the heart of Middle Eastern culture.
Small and Medium Enterprises (SMEs) are the backbone of Dubai’s economy, representing 95% of all establishments in the Emirate. These companies account for 42% of the workforce and contribute around 40% to the total value add generated in Dubai’s economy.
Of course, there are global concerns – multinational organisations – operating out of all the major cities in the region, but the SME rules the roost.
Interestingly, these business still operate in very traditional ways – given that local culture enjoys nothing more than face-to-face business, drawing on local traditions of the majlis, ghahwa and lengthy meals.
The vast number of smaller business in the region are mostly paper based and reliant on networking and connections – some of which have taken a lifetime, or even generations – to build up.
But in the current era – especially in the current crisis – digitisation of trading activities can become an attractive catalyst for growth – growth of both the business itself and the larger economy.
For many years, Dubai has been at the forefront of paperless, or e-government, and has long held the concept of the ‘smart city’ to be sacrosanct.
These concepts, together with the clear advantages of adopting a blockchain economy, are filtering through to all strata of society.
While the concepts of “if it ain’t broke, don’t fix it” and “we do things the way we’ve always done them” might ring true, digitising general trading has manifold benefits.
Simply put, taking many traditional business activities online can provide clear competitive advantage – by helping small and medium enterprises to do things better, faster, and cheaper than the competition.
Conducting business online can save time, costs and energy – and means access to hitherto inaccessible global markets.
WeMENA is a new, bulk ecommerce platform for the Middle East, and the first in the region. In layman’s terms, the platform gives access to more than 25,000 products which can be purchased and delivered with great ease and simplicity.
The site could help shift the region’s reliance on face-to-face, paper-based transactions and into the new digital era.
But there’s a way to go. While the UAE enjoys one of the world’s highest internet penetration rates, ecommerce hasn’t taken off in the country like it has elsewhere.
According to research from online payment gateway provider PayFort, the region’s e-commerce market should have grown to US$69 billion by 2020, almost doubling in size in just a few years – but the pandemic has halted that proposed growth. Meanwhile, online statistics portal Statista predicted overall e-commerce growth in the MENA region would be at a CAGR of 11% every year until 2022.
Despite the glitch in global economic growth, the UAE offers laws that are favourable to those wishing to start up an ecommerce business. While online B2B commerce portals like WeMENA are new players in the region’s digital landscape, the government has made it easier for such new tech businesses to operate in the region. For example, e-commerce regulations from Dubai Free Zones Council promote more foreign direct investment into the city’s e-commerce sector.
On the bedrock of a supportive legal framework, the government is also creating Dubai CommerCity, the first free zone dedicated to the e-commerce market in the region. It promises a unique e-commerce ecosystem to global and regional brands to help them set up and operate their e-commerce business in the MENA region
The city leaders see e-commerce as a key driver for sustainable economic growth, with predictions from CommerCity suggesting the UAE’s e-commerce retail market will be worth US$4.6 billion by 2022.
The UAE is already one of the biggest, most mature e-commerce markets in the region, valued at US$27 billion by Payfort in 2016. Given the climate and the obvious advantages of doing business online, this is clearly a market that will grow exponentially – driven in part by the sad circumstances of the current pandemic.
WeMENA is proud to be blazing a trail in this new era, and helping small and large companies alike to weather the current crisis, and to do business better in the bright new future.