How to start an e-commerce company in Dubai?
Before getting onto discussing how to start an e-commerce company in Dubai, one needs to understand e-commerce. In broad terms, any economical transaction that takes places digitally is known as e-commerce. This transfer could be in forms of funds, money, or data. These virtual dealings could further be categorized as business-to-business (B2B), business-to-consumer (B2C), customer-to-customer (C2C) and consumer-to-business (C2B).
According to a joint study titled ‘UAE eCommerce Landscape’, published by the Dubai Economy and VISA, the UAE has the most advanced e-commerce market in the MENA region. The study projects that this market is set to achieve an annual growth of 23% between 2018 and 2022. Considering the brighter aspects of the pandemic, shoppers have become more tech-savvy and conscious about exploring crowded stores. Therefore, the potential for e-commerce business is quite high.
Listed below are some of the basic components an e-commerce company requires:
What to sell?
Given that international e-commerce giants are already operating in the UAE, you must first figure out what do you want to sell on your platform. Do you already have a trading company and want to sell your products digitally as well or you want to become a reseller? As a reseller, your website acts as a platform for vendors to connect with consumers. For instance, Amazon and Noon are resellers as they have multiple vendors from across the UAE and abroad selling products via their platform. Similarly, e-commerce websites such as Namshi and Shein have a niche fashion and lifestyle offerings. However, a trading company can also expand into the digital marketplace by putting up their own products online. Therefore, if you want to start an e-trading company as a reseller, first figure out which products or services you will be incorporating on your digital platform.
As per the law, only UAE nationals are allowed to conduct commercial activities in the UAE Mainland. So, if you have an LLC company, for which you have already partnered with a local sponsor, getting a mainland e-commerce license is a simple process. In the UAE UAE free zones, however, besides getting an e-commerce license, you also need to have partnerships for logistical activities such as clearing imported goods and delivery services.
Building business platform
The core medium for e-trading is a digital platform which is a website. Here, the products are displayed along with details, so that the buyers can navigate and make purchases. Thus, an effective website needs to have elements such as:
- Customer registration
- Bestsellers or offers on homepage
- Product images; categorization
- Zoom option for viewing products
- Shipping Details
- Contact information and feedback
- Ratings and reviews
Trading via social media
Regulating the various social media platforms is a complicated task. In the UAE, traders on those platforms have to register with the National Media Council to avoid unwanted fines.
Banking and payment gateway
Given that majority of the transactions of your e-commerce business will be digital, you need to ensure that you have a foolproof solution for monetary transactions. Surely, neither you, nor your vendors and customers would like to lose money or get hacked. You need to tie up with a reliable banking partner or multiple partners. You also need to establish a secure payment gateway giving more feasible options to clients. Some UAE banks also offer customized packages for e-commerce businesses.
Warehouse / Office
If you are selling goods online, you ideally need to have a storage and sorting facility. Unless you are just starting up and are inspired by the fact that many of the world’s leading businesses began from garages. In the Emirates, you can either have a personal warehouse or lease one.
When it comes to office, however, all business in the UAE must have a physical address for registration and license related procedures.
This is one of the most important aspects ensuring smooth operations of an e-commerce company. Establishing a proper logistics system ensures smooth operations from import to timely delivery of goods.
Post-sale services also need to be considered when you start an e-commerce company in Dubai. Again, for this also you need a team of professionals to deal with feedback and queries from customers. For this service, you may either get an in-house team or opt for outsourcing.
With the above steps, you are set to begin operations. Reach out to potential clients by having an effective marketing strategy in place. You need to reach out to your target customers.
Expert advice at every step
Gearing up to start an e-commerce company in Dubai can be a tedious and time-consuming task. However, Dubai has a pioneer consultancy – Shuraa Business Setup – that can help you from prioritising your business requirements and choosing the right jurisdiction to assisting with your banking needs and getting your all your documentation done. Just contact Shuraa for a free consultation with one of their expert business advisors and get your e-commerce license with ease.
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