Online Retail In UAE - Driven To Grow Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Online Retail In UAE - Driven To Grow Case Study Solution

Discuss the opportunities and challenges of online retail in UAE

Online retailing is a massive change in the retail industry, it has increased profit margins by leaps and bounds for businessmen. For the past few years; online shopping has increased significantly and it has allowed the retailers to expand their business further and helped them to add more variety to it. The first brick to this cause was initiated by tejouri.com which was the first online shopping mall of the United Arab Emirates, which was launched in 2013, offering a vast range of products and services to the customers.The chairman of tejouri.com Muhammad Sharaf said, “Since we started our malls and retail stores online, we have achieved massive success and we are successful in engaging our customers to a new level, we have launched venues for not only global retailers but also for small and medium size retailers, which has helped us gain confidence in the market. Since the discovery of Crude oil, the United Arab Emirates has never looked back they are on upward trajectory in every aspect of their economy, which is largely supported by their retail market. Almost every sector is now moving towards online terms of business as the United Arab Emirates is very strong in travel business as well, almost 45% of their travelling bookings are now booked through online method. The Government sector was also using online method for the payment of utility bills by the customers. The United Arab Emirates saw an opportunity in fashion industry so it tried its luck in introducing an online business in fashion industry as well, they joined hands with Rocket internet which is one the best and largest companies in the fashion industry, since then they achieved a massive success in fashion segment and they are continuously growing and increasing their range.Online retailing has helped the companies earn their customers confidence, we will look at several aspects of this, firstly the purchasing power, The United Arab Emirates is among the top countries around the globe in terms of purchasing power of buying expensive items such as; vehicles, Mobile phones and cloths for instance. So price of the product in not an issue especially for the local citizens, they can afford whatever the price being asked.(Shukla, 2018)

Secondly they want convenience which is provided by e-commerce as now they sit in their homes and order anything they want. The Sector which is benefited the most since the inception of e-commerce is food sector. Not just in the United Arab Emirates but all over the world; food sector has been mostly used in online method. People love food and they order their favorite food every day in one touch and within an hour their order arrives at their door step. The second is shopping of cloths and other accessories which customer enjoys to order sitting at home. The other aspect in this, is customer’s comfort as they don’t need to go out physically, which saves their time and energy, other most important factor is the payment of the item in physical shopping customers’ needs to carry cash or credit card with them, standing in long queues for hours sometimes for payment. With online shopping, payments methods are also easy as customer just has to enter their credit card details and his payment gets done easily. The other important factor is the quality they are proving, as it happens sometimes in online shopping you don’t get what you order, either the product is being replaced mistakenly as there are chances of human error or the quality of the product is not what you expect it to be. So, in the United Arab Emirates the quality provided by retailers is good.Social media channels like Facebook and Instagram have made it a lot easier for retailers to reach their customers as in earlier times they had to pay heavily on television ads to appeal customers or they had to put big billboards and signboards to attract the customers, but it’s not that difficult now as they have their pages and accounts on social media and with little expense they can attract customers. Even they have their own marketing and sales team posting information about products. For customers it is easy to regularly check their pages and from people’s reviews they can choose and compare different products specifications and prices. The other important thing to notice is to make online shopping and payment method safe and secure for your customers, so the Government has introduced e-commerce laws regarding privacy as retailer needs to make sure that customers information are safe and they will get the desired policy, similarly there were some guidance for customers as well, to cooperate with retailers.(Khanfar Muhannad, 2014)

Besides thousands of advantages, there are some challenges as well which needs to be look at closely as they can become harmful. The first thing to look into is the security of the payment method. First from the retailer’s perspective as the retailers don’t know anything about the customers, they only have some information put by someone and there are some incidents in the past that people put fake accounts information and retailers suffer losses.

Now from the customer’s perspective, customer will always think twice before putting his information on any random site as there is no guarantee that the product he is paying for, will reach his door step,and he has fear that his personal information can be misused as well. The other challenge is the lack of feel factor as online shopping does not provide you real time experience of shopping. Actually there are people who still prefer to go out and do physical shopping as they feel they can check the product’s quality and can compare different products before making the final purchase, which online platform can never provide. Online shopping has killed the entertainment factor for people because in online shopping they can go out with their friends and family and spend some quality time with them and have a lunch or dinner outside. Even though there is a craze of online shopping but still people love to go with friends and family and help each other choose the products while shopping.Especially for a country like United Arab Emirates, where people love to go outside and have some quality time with friends and family and entertain themselves in malls and click some pictures of themselves.(Parodi, 2017)

The other challenge for the United Arab Emirates is luring tourist to their country as it is important for their overall economy as well as for their retail market, as they want people to come here and buy products in their country. The Government infrastructure and support was much needed for businessmen as they need lesser taxes and duties on import and export. Overall the United Arab Emirates retail market is on the rise.It is estimated that their retail market will touch 1 billion dollar mark in 2020, which is a remarkable achievement for them. The United Arab Emirates aims to be among the top retail market countries in both brick and mortar and click and mortar.(Parodi, 2017).............

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