E-commerce in the UAE: Is it the new normal? (Part 1)

Tony Fielding: Hi everybody and welcome to the first of what is to be a series of e-commerce articles and videos published by Gowling WLG Dubai. I'm Tony Fielding and I'm head of the TMT practice here at Gowling WLG in Dubai and today I have the pleasure of being joined by Rachel Armstrong who is principal associate in our specialist IP team here, also in Dubai. 

Rachel and I, together with our other partners and other team members here in the office are going to be presenting a series of publications in relation to all things e-commerce and they're not going to be specifically legal chats, what they'll be is market intel, insights into the e-commerce industry here in the Middle East, as well as some practical tips and some experiences that we will share with you in relation to what we've seen in the market particularly in relation to the key stakeholders here in the region. 

Rachel, I know that you and I are both avid shoppers and users of online retail platforms in the UAE and probably globally, I was wondering if you could share with us some of your insights or experiences in relation to what you see has happened in the e-commerce market here in the UAE particularly since COVID hit us.

Rachel Armstrong: Absolutely. Well I think even pre-COVID we were seeing a huge advent of e-commerce in the UAE and I think across the region generally. 

COVID has perpetuated that lightning speed forward where for a significant period of time people in the UAE particularly weren't able to get out to the shops, the shopping malls were closed, really it was restricted to the likes of grocery stores for emergencies. 

So I think in that scenario anyone that wasn't already online quickly adapted and realised they needed a fully functioning e-commerce platform to enable them to reach their consumer base. So I think we probably saw what was going to happen but just much more quickly then anyone anticipated and I think generally, I mean I myself was a consumer of being really impressed at the uptake of a lot of retailers that were perhaps in the e-commerce space and how they've taken that initiative and gone online very successfully. 

And then that's to say nothing of your major e-commerce players who are already in this market that were doing a roaring trade and have unsurprisingly continued to do so throughout COVID, the lockdown and I think what we've seen over the last few weeks as things have started to overlap as well and there is still really I think a reluctance from a lot of people to resume life as normal, shall we call it, so really there's that continuation of reliance on the e-commerce platforms and you know trying to get all things delivered to your door be that products or services as well.

Tony: Yeah, the everything, everywhere and right now sort of culture of e-commerce, yeah, I agree.

One of the things I have noticed that's definitively true here in the UAE is that the shopping experience has changed considerably here during COVID and likely to change post-COVID and I think one of the interesting things about the market here is whilst you're seeing a lot of e-commerce players coming new and developing a sort of incumbance currently, what is being driven here is that you've got the bricks and mortar retail that's the shopping malls and the shops but still having key space in the retail sector here.

I think that's partly driven by the fact that it's climate geography here, it's hot, Dubai is very very hot and there are long summer months here and shopping malls and the shopping experience becomes a lifestyle experience, becomes a family outing, it becomes something that happens all day.

So you've really got this interesting sort of mix of this burgeoning e-commerce sector here which as you say is developing at lightning speed as a result of COVID, but alongside that you've also got these incumbent shopping mall operators here who are still doing quite well and I think interestingly one of the things that they are doing is in order to address current consumer expectations, current requirements for new consumer engagement, less time in the store and more time online, is that you've got shopping malls going omni-channel so they're offering the in-store experience which is generally a shorter experience coupled with their online stores which are offering either a much broader range of products then they previously offered or they're offering discounts or special offers alongside what they wouldn't necessarily traditionally be offering in the in-store experience.

And I think that that coupled with what we've got now in the UAE is quite a strong and growing digitally savvy consumer base. You know high penetration of mobile phone usage, high penetration of internet access in the region.

So we've got a customer base here who really wants to use e-commerce and the omni-channels and I think that that's really forging a way forward for what looks like something to be the new normal for us here.

Rachel: I think that's absolutely right, the only thing I would really add to that is how that can work in a close to real time experience for the consumer, so given the sort of huge distribution warehouses etc. that you have down in certain areas of Dubai, Dubai South, Jebil Ali.

You can get those products from the distribution centre to the consumer very quickly, be it within a few hours.

Tony: Have you had any of those anecdotal shopping experiences yourself?

Rachel: I have myself had an experience where I wanted to buy something from the Apple Store here and obviously those stores have been shut for months globally and I went in to, well I queued to go into the Apple Store here and decided that wasn't something I was going to continue to do, so went online expecting there to be perhaps a week or two delivery on a product I was looking for, only to place my order and have it delivered within 12 hours, to my do.

So I think that experience, that being able to see, perhaps you don't want the waiting time in the store or they don't have what you need in the store but knowing that you know, you can get that product very quickly, you almost get that immediate gratification here which is now such a key driver for consumers, and you can get that to your door.

I think that it's a real change and I've been really impressed at how the brand and this market have really adapted to the changing requirements to the consumer so quickly and I think it stands them in good stead going forward.

Tony: Yeah, I think that's right, I mean the other very interesting and very positive thing about the region here is that the UAE has a strong strategy behind what they're looking to achieve, not just from its National Vision but also in relation to their e-commerce strategy.

So they had a UAE e-commerce strategy which they're wanting to implement. Some of the goals around that are making the UAE a global hub for international e-commerce activity. Developing robust processes and infrastructure in order to achieve that and also sort of focusing on cyber security to ensure that that along with data protection and privacy are sacrosanct in a way that will encourage investors to come here and build out their e-commerce businesses.

Government initiatives in the region are quite strong in relation to that. They've got the e-commerce city which they're building and developing and opening up and that's designed really to encourage international investors, provide infrastructure, streamline processes, gives tax incentives in relation to who is going to participate in setting up businesses there.

You've also got you know the Department of Economic Development who are issuing licences in a much more streamline fashion, so they're the new e-commerce licences.

Rachel: And there's been a huge uptake in various stages in the last few months, it's off the scale to what it has been previously, so you can really see the recognition of those in the market recognising that e-commerce is a key part of any strategy going forward and taking the steps to get those licences and I think through the initiatives that the government have in place it is a streamline process now and that's why we're seeing such a big update. I don't think there's a huge amount of red tape around obtaining those licences.

Tony: Yeah, no and I do, I think the authorities and the regulators are very encouraging of granting those licences under certain circumstances.

I guess Rach, maybe you could lead us into what's coming next in this series because that would be quite helpful for our audience.

Rachel: Absolutely Tony. This was very much just an initial chat about the market and how we see it at the moment.

What we're looking at throughout the series is the whole e-commerce journey, so anything from invest in e-commerce and the considerations around their supply chains.

I myself and my colleague, John Parker, who heads up the IP team, will be looking at the branding considerations around e-commerce.

There will be consideration of payments as well and how that interplays with this. So really it is the full lifecycle of e-commerce and the different considerations that both I think those players that are already in the market and also for those that are looking to get into the space as well should certainly be aware of.

Tony: Yeah, no I agree, so I think just for everybody's benefit.

I'd encourage you to stay tuned to not only these little video chats but also the following articles, the first of which was published today so I hope you find interesting and that you tune in for the future ones.

Thanks everyone.

Thanks Rach.