How to Start an E-Commerce Business in Dubai?

There has never been a better time to start a business in Dubai than now.

With nearly half the world’s population expected to become web users by 2016 the Internet economy is set to provide companies with an important source of growth. Dubai has made major efforts to establish itself as an e-commerce hub. According to a study carried out by Dubai Media City-based Madar Research Group in late 2002, Dubai was on the same level as some of the top European Union states in terms of basic online services.

This trend is being further fuelled by the rise of the emerging markets, and the growth of social media. SMEs are also increasingly championing the Internet, using it for marketing, sales and interactions with customers and suppliers.

In the Middle East, the web effect is no less dramatic. For example, 42 per cent of UAE shoppers accessed the internet for online shopping in 2012, up from 33 per cent in 2010 according to a survey by MasterCard.

The e-commerce trends here are no different. New players are starting a business in Dubai and setting ablaze the trail for e-tailing.

PayPal is coming on big in the GCC . In fact, according to Arab Advisors Group, the value of e-commerce related transactions is about $11 billion a year in the Middle East. With the growth of broadband in the region and improvements in logistics, security of transactions, payment execution and technology speed, we expect the online space to continue to flourish.

Building and distributing a successful brand in the Internet era is about addressing the new behaviors of an evolving customer base. Looking to the future, the discussion has to shift from e-commerce vs. offline commerce to an integrated model.

For the consumer, some things remain the same irrespective of whether the talk is about online or offline retail. Customers still want to buy trendy products at great prices, they still value good service, and they continue to desire brands that understand their life interests.

Increasingly, consumers are making the final purchase through a series of online and offline experiences. Online, they share information, validate their friend’s choice, research, learn and develop a point of view. Offline they often look at and feel the product, comparing it with some brands and associating it with others.

It is a mixture of these experiences that drives the consumer to his or her final purchase decision and brands of the future must take both into consideration. Finding the right strategy for this online versus offline dynamic will be key to the success of future brands and e-tailors.

How to start an e-commerce business in Dubai?

There are several factors to consider when starting an online business. These include licensing, office space, website development, and registering a domain name among others.

Licensing:
1) To form a web-based company, you will need a License from the Department of Economic Development (DED).

2) If you are looking to setup within a free zone, the license will have to be acquired from the relevant free zone authority.

3) The type of license issued will depend on the nature of your online business.

Office space:

Depending on the nature of the business, you should also consider setting up a physical office. Dubai-based companies must have physical office space to be considered legal.

Website development:

To set up an online business, you naturally need to prepare a website The following steps need to be taken when establishing your web presence:

Registering a domain name:

1) You will need to choose and register a domain name.

2)  This is the name or address you use for your website (often the company’s name).

3) A number of companies in the UAE offer domain name registration services. In order to acquire you can search it out on Google which is the best one available.

If you are an online shopping portal, there are a few additional factors to consider:

Online payment gateways:

If you are selling products online (whether tangible or intangible) you need to set a Secure Payment Gateway Options. This includes credit card payment, cash on delivery and pre-paid card systems such as PayPal.

Import/export requirements:

If you are importing products from outside the country and selling them online to the UAE market, the business has to be registered with the relevant emirate’s ports and customs authority, and receive an importer’s code. A customs duty (often 5%) is applicable to goods being imported.
Businesses established within a free zone are exempt from customs duties if they are selling their products/services within the free zone or outside the country. However, if they are selling to the UAE market (outside the free zone), the customs duty has to be paid and a local commercial agent has to be appointed.

We at flying Colour business setup services provide company registration services from start to finish. Please contact us on +971-4-4542366 or info@flyingcolour.com or visit our website www.flyingcolour.net for more information.

This article is written by Senior Business Consultant, Mr. Ramesh.