UAE customers spend more per transaction than anyone else – and they usually buy international products. We explain how to increase visibility and drive sales with e-commerce in the UAE.
When UAE customers shop, they spend big.
At $332 per purchase, their online transaction levels are the highest in the world. But they shop online less frequently than the global average, so the market has plenty of room for growth.
Overseas products account for 58% of all purchases. This is good news if you’re an international brand, but to generate strong sales you’ll need to effectively marry customers’ online and offline experience.
MEET ME AT THE MALL
Shopping malls are hugely popular in the UAE. Over half the population visits one at least once a week.
That’s because they’re more than a shopping destination – they’re a part of everyday life. People go there to spend time with friends and family, eat out and be entertained just as much as they go there to shop.
Of course, this has a knock-on effect on customers’ shopping preferences. 77% discover new products in a store, compared to just 14% online. And 84% buy from brick-and-mortar stores.
So for your brand’s e-commerce activity to gain traction, you need to complement your in-store experience – not replace it.
KENZO are a good example of how to do this right.
When they launched in the UAE, they hit the streets of Dubai and Abu Dhabi in a KENZO bus. They branded the London-style double decker with KENZO’s iconic navy blue polka dots. This allowed them to show off the brand and its products more powerfully than through traditional advertising.
They ‘joined the dots’ with an online campaign, encouraging people to follow the bus’ journey using #FollowTheKenzoBus. Thanks to this combined approach, the launch was a success – KENZO now has four stores in the UAE.
MOVE INTO MOBILE
The UAE’s mall obsession doesn’t mean you should abandon hopes of being an e-commerce success.
It’s still the e-commerce leader in the Gulf Cooperation Council – an Arabian alliance that includes Bahrain, Kuwait, Oman, Qatar and Saudi Arabia.
The country’s e-commerce market is also expected to quadruple to $20 billion by 2020. And the government recently launched Dubai CommerCity to accelerate growth in the sector.
But to claim your stake, you need to be mobile-ready.
In 2015, the UAE was named the second largest m-commerce market. 57% of online shoppers bought using their mobile, and 80% of online retailers say their customers use mobile to buy from them.
Purchasing via apps is also preferred to browsers – basket sizes are 20% higher on mobile apps than desktops. This is especially true for the UAE’s established e-commerce sites, including Awok, Wadi, Namshi and Souq. In fact, 55% of Souq’s purchases come via their mobile app.
So these sites are crucial for building online visibility and increasing sales. As the largest e-commerce site in the Middle East, Souq is the best place to start.
Initially an auction site, Souq has evolved into a retail platform like Amazon. In fact, Amazon bought the platform for an undisclosed sum in 2017.
In terms of initial set-up, you’ll need a trade licence, ID, bank account and shipping location to sell on Souq. There’s no fee to sell, but Souq does charge a commission on anything customers buy from you – so be sure to factor that into your costs.
Selling on Souq is a wise choice because it offers many services to make sellers’ lives easier. Souq handles payment and shipping, and also provides an authenticity guarantee for ease of purchase and sale.
Souq is particularly attractive to fashion brands right now, as fashion is a growing sector on the site. The downside is, people tend to search by brand name rather than product. So if you’ve just launched in the market, you’ll need to invest heavily in marketing to raise your brand’s profile.
You can do this directly on Souq. A wide range of options are available, including sponsored products, display marketing, email marketing and ‘big executions’ – a takeover of the wallpaper and interstitials.
The platform’s wide reach and wealth of advertising options make it a good site to advertise on even if you’re not an e-retailer. Big brands like McDonalds, Lufthansa, HSBC and Jeep all advertise on Souq.
When it comes to e-commerce in the UAE, any online strategy should complement the in-store experience, rather than replace it. Because there’s a close connection between socializing and shopping, incorporating social media into your e-commerce strategy is a powerful way of bridging the gap.
If you want to get social media in the UAE right, check out our article here, or get in touch. We’d love to hear from you.
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