IS E-COMMERCE THE BEST BET FOR REGIONAL START-UPS?

Although opportunities are abound, many entrepreneurs underestimate the challenges of starting up online.

THE MIDDLE EAST’S E-COMMERCE space has been booming over the last few years, with a recent report by payment solutions provider Payfort, suggesting regional e-commerce sales could touch $15 billion by 2015, up from $9 billion in 2012.

Competitive pricing and better deals (60 per cent) were found to be key motivations for users shopping online, while convenience (56 per cent) was also a key factor.

The report found that there are around 4.43 million online buyers in the region mainly spread across the UAE, Saudi Arabia, Egypt and Kuwait, with the UAE accounting for the biggest chunk at 3.6 million.

Up to 85 per cent of the UAE’s population now uses the internet and almost every home in Dubai has at least one computer and a WiFi connection, stated Vikram Shroff, president of the UAE Chapter of the Entrepreneurs Organisation (EO) and director of Regal Group.

Not surprisingly given these numbers, a large chunk of regional entrepreneurs are now targeting e-commerce or online platform based industries.

“Creativity is the name of the game moving to the future. Hence, the internet offers regional entrepreneurs new ways to market their goods and services and differentiate themselves at the same time. Thanks to social media and heavy internet usage, people are turning to online portals for time and efficiency,” said Shroff.

“Businesses that are centred around facilitating time and those that help consumers find solutions to existing problems will be extremely successful.”

But while the industry is flourishing, experts highlight the lack of established players, with only a few successful ventures standing tall in the region.

The problem is that it is actually very difficult to make money through an e-commerce venture, explained Rabea Ataya, founder and CEO of recruitment firm Bayt.com. “Most ventures lose a vast amount of