How to set up an e-commerce business in UAE Free Zone
Impact on E-commerce business in UAE in current times or let’s say Post covid or covid time.
UAE is one of the best place to start an e-commerce business due to high digital advancement and tech savvy population with suitable government policies. But due to COVID-19 pandemic and lockdown people are only allowed to get out of the house only to buy essentials which has also led to high inflow of e-commerce. This pandemic has changed the way of shopping or in fact it has changed the consumer’s taste and preference pattern. Due to the restrictions and social distancing in the physical shops it is very obvious that the e-commerce will start growing more in the coming months.
It should not come as surprise that e-commerce has already started growing in UAE. Currently it represents 4.2% of the retail revenue and it is predicted that it will grow on at an average 23% by 2022.
Though it is not only because of COVID-19 and the lockdown but moreover it is the ecosystem that UAE has and the way the continue to develop for e-commerce and the rapid innovative business growth. The UAE as well as Dubai is one of the fastest growing e-commerce country due to-
1. high digital penetration
2. high consumer trust on e-commerce and e-payments
3. high standard of logistics infrastructure
4. government support for entrepreneurial initiatives.
The UAE has a large emerging set of e-commerce players in the region including the recent e commerce operators in UAE like, Amazon, Noon, Namshi, Deliveroo and Careem Eats. However there is always an opportunity to enter into the e commerce market any time at UAE. The UAE business hub is waiting to welcome new innovative drives and services which they can offer o the consumers.
Right now - the major e-commerce players in the UAE
1. Aido
2. Amazon
3. Awok
4. Careem Eats (previously Uber Eats)
5. CarrefourNow
6. Deliveroo
7. Ebay
8. FarFetch
9. Mumzworld
10. Noon
11. Namshi
12. Ounass
Steps to Consider Before Starting an E-commerce Business in the UAE Free Zones.
With a drastic growth in e-commerce platform it is more advisable to start an online business now more than ever. But in order to operate there are some legal formalities. First of all a trade license is required from a Free Zone or Mainland authority before starting. And now here are the points on how to set up e-commerce business in UAE:
1. Choose the right jurisdiction and get a trade license
The choosing of Free Zone and Mainland authority will depend on the nature of the online business. In mainland License products can be sold directly while in free zone license it is required to work with local distributor.
2. Developing, building, and launching of the website
This is the most important part of e-commerce as this will help to build a rapport with the consumers and showcase the products and services. This place will also help to interact with consumers and know their taste and preferences which will further help in the growth of e-commerce business. Therefore to build an income generating website it has to be user-friendly and the web maintenance, secure hosting and mobility usage should be in check.
3. Keep online payment facilities
As an e-commerce business it is necessary to keep an online payment facility for the consumers. Integrated secure payment gateways include credit cards, debit cards, and mobile wallets. Another payment option is cash on delivery (COD) which can also be used.
4. Secure logistics, storage, and delivery system
If the online business involves physical products then it is necessary to have a proper warehousing to store the goods. This factor is as important as the jurisdiction to set the company. Once this is done then the next thing is to have a secured logistics system to ensure fast and efficient delivery of the products to consumers. A third party logistics can be chosen or the owner can have their own logistics.
5. Market your products or services
Once everything is done and the business is ready to start in the market the most important factor to keep in mind is marketing the products and services. It is very necessary to know the target audience and the set of customers who are willing to buy the product. An effective market plan can be created to set the right consumer and the market.
Read More: A quick guide on essential thing to consider before starting an e-commerce business
Benefits of Setting up an E-Commerce Firm in the UAE Free Zones
1. Free Ground Operation- The UAE region provides flexible working space and ground of operation in the UAE state like the Mainland, Free zones and Offshore can be built depending upon the nature of and size of the business.
2. Global Technology Platform- The Government of Emirates has been taking numerous steps to uplift and infuse technology in possible business sectors. This turns out to be a grabbing opportunity for business owners who want to start an e-commerce business as the region is well-versed to technology.
3. The flexibility of Global Hiring- The business owners are incorporating their business to hire flexible employees as it is a part of legal proceedings.
4. Easy company formation process- The UAE has got easy procedures for company establishments as its main focus is to attract the foreign investors and business people who are looking for a place to start a business. Even local sponsorship is entertained.
5. Wide Option for business expansion- The most advantageous location to set up a business is UAE. It is easier for the neighbouring countries to start up with the business. As an e-commerce company if a representative office is set up in other zones then it will be useful to know about the customer preferences.
Read More: Here is a Quick Guide to obtain e-commerce license
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