FIRST PHASE OF COMMERCITY IN DUBAI STARTS OPS
New mega hub to help businesses and investors to establish base in the emirate
The pandemic has redefined the nature of work in various sectors including e-commerce. During this period, the role of e-commerce has expanded and offered several solutions. It has also allowed the UAE to offer unprecedented opportunities to businesses across the region and globally
Dr Mohammed Al Zarooni
Director-general of the Dubai Airport Freezone Authority
Dubai Commercity on Sunday launched first phase of its new facilities to facilitate businesses and investors to establish base in the emirate.
Dubai Commercity, a Dh3.2 billion, 2.1-million square feet project situated in the Umm Ramool area, has launched the first stage of mega development that includes 470,000sqft of office spaces and warehouses in the Logistics and Business clusters as per its schedule.
The launch of the new phase includes a built-up area of over 320,000sqft of offices spaces in the Business Cluster. It also includes 145,000sqft e-commerce logistics units and multi-client warehouses in the Logistics Cluster, which will be managed and operated by Hellmann Worldwide Logistics and DHL.
Sheikh Ahmed bin Saeed Al Maktoum, Chairman of the Dubai Airport Freezone Authority (Dafza), emphasised how the e-commerce industry has proven to be a key enabler of growth for companies and a new module adopted by many businesses to ensure business continuity as a result of the increased demand overall. He said that the acceleration of digital transformation within supply chains and trade because of the Covid-19 pandemic, has spurred companies to ensure continued operations which are picking up with great optimism in 2021.
“The launch of Dubai Commercity aims to lead the future of e-commerce business in the region. The project has been thoroughly studied not only to provide foundational solutions, but also to stimulate and support business and prosperity at a time when the sector is going through peak growth,” he said.
E-commerce gaining ground
Sheikh Ahmed said the e-commerce sector is key as its value is expected to reach $148.5 billion by 2022 in the Middle East, Africa and South Asia regions.
“The GCC region is the fastest growing in the e-commerce sector, and the UAE comes in second place as it is expected to grow 38.3 per cent Compound Annual Growth Rate (CAGR). The UAE is also ranked the fifth largest B2C products e-commerce market in sales within the Middle East, Africa and South Asia regions valued at $4 billion.
“The UAE companies in e-commerce account for six per cent of the list of the 100 largest companies in the sector within the Middle East, Africa and South Asia region,” Sheikh Ahmed added.
Given its strategic location and the increased demand for its facilities and services, the new free zone managed to lease more than 51 per cent of the logistics warehouses to companies launching their operations in different sectors, ranging from ecommerce, logistics and information technology to fashion, jewellery and electronics.
Project on schedule
Dr Mohammed Al Zarooni, Director-general of Dafza said the launch of the new Dubai Commercity facilities comes in line within the planned schedule.
“Despite the global circumstances and the challenges posed by the Covid-19 pandemic, we have witnessed an urgent need to build a world-class e-commerce platform. It is set to attract specialised companies aiming to establish their regional headquarters in the emirate of Dubai, which helps them expand and develop their regional operations to be able to keep pace with the significant growth in e-commerce,” he said.
He said the global e-commerce sector is expected to grow 16.6 per cent CAGR between 2019 and 2022. The Middle East, Africa and South Asia region is also expected to grow 18.4 per cent, the Middle East and North Africa region 24.9 per cent and the GCC 32.9 per cent CAGR.
$ 27.15T Value of global e-commerce business projected by 2027
“The pandemic has redefined the nature of work in various sectors including e-commerce. During this period, the role of e-commerce has expanded and offered several solutions. It has also allowed the UAE to offer unprecedented opportunities to businesses across the region and globally,” added Al Zarooni.
Role of technology, govt
Saad Maniar, senior partner at Crowe, said the development of 4G and 5G technology has contributed to a faster browsing speed, which has lead to better customer experience, as a result market size increased significantly. Furthermore, the Covid-19 pandemic has accelerated the growth in the e-commerce business, that will continue to grow in near future.
“The global e-commerce business was valued at $10.36 trillion in 2020 and is expected to grow to $27.15 trillion in 2027. Increasing penetration of internet in digital content, travel and leisure, financial services, e-retail among others constitute a vast customer base that are gaining momentum, this is expected to have a positive impact on the market growth,” Maniar told Khaleej Times on Sunday.
“The UAE government is always forward looking and this initiative to bolster e-commerce will contribute positively toward economic growth,” he added.
The launch of the facility is supported by the strategic partnerships signed by Dubai CommerCity and aims to support businesses to run effectively and seamlessly. The e-commerce free zone has signed agreements with Hellmann Worldwide and Logistics DHL Express that complement the efforts to grow and enhance the portfolio of services that Dubai Commercity provides.
As part of the partnerships, Hellmann Worldwide will manage and operate a shared, multiclient warehouse within the logistics cluster of the free zone and clients will have access to last mile delivery services through DHL Express.