Distance, borders no barrier for UAE’s online shoppers

MORE CLOTHES AND COSMETICS ARE BEING SOURCED FROM OVERSEAS PORTALS

When it comes to personal goods, the UAE’s online shoppers are thinking cross-border. Buying of cosmetics and other beauty care products from online sites based outside the UAE and region went up a whopping 158 per cent in the last 12 months.

According to recent data released by the payments company PayPal, 64 per cent of cross-border online shopping transactions originating from the UAE related to clothing and accessories. Toys also figure high among items shoppers here searching — and buying — on overseas portals.

So, what is it that prompts a sizeable number of UAE online shoppers to stick with crossborder buying? Is it to do with prices only — that buying from elsewhere means they don’t need to pay as much as local listed prices? Or is there a wider selection of brands they can tap into than is available with local/ regional shopping sites?

Whatever be the reason, cross-broder online shopping is not going away. Which directly means that those are dirhams and dollars not being spent with local portals.

“In the UAE, 61 per cent of online shoppers stated that they shopped online from websites in another country, which is a 33 per cent rise from the previous year,” said Efi Dahan, General Manager, Eastern Europe, Middle East and Africa at PayPal. And 12 per cent said that they only shop online cross-border.”

But the UAE’s portal operators need not lose their sleep over it. PayPal says this preference is in line with what global shoppers elsewhere tend to do.

“Cross-border online shopping is now growing at 30 per cent — which is double the rate of global e-commerce.”

There are also clear patterns in UAE shoppers’ choices of overseas portals.

The US “is leading in trust and quality, [while] India is the second top destination based on logistics benefits,” said Dahan. “China, mostly, gets the bargain hunters.”

On their part, the region’s etailers are doing their bit to stem the flow of buying to overseas portals. Souq.com, of course, is offering access to Amazon’s ‘Global Store’ on a range of merchandise and the promise of 48-hour delivery on some. Just before summer, noon.com formalised an alliance with eBay (PayPal’s former owner), to offer access to products “not readily available” in the region.

Local portals get better

In Saudi Arabia, wadi.com extended its reach by offering shoppers direct access to Chinese and Indian vendors.

At the time, Pratik Gupta, founder and managing director of Wadi.com, had said: “The Middle East customer is having a dearth of the same assortment of merchandise that is available globally. What we are doing is bring those supplier geographies closer to this region by creating a global marketplace. We are promising a seven-day delivery on these transactions.”

Dahan echoes the fact that local/regional portals are getting better in their product mix. This, he says, can work both ways — appeal to local shoppers and even help them to tap possible interest from buyers elsewhere.

“Having a cross-border strategy allows merchants to capture incremental sales and grow their addressable market by reaching a wider customer base in new markets at further distances,” Dahan added. This way, they “compete with global online shops and marketplaces.”

As a category, online retail sales in the UAE/Gulf continue to put in higher growth rates than in brick-and-mortar.