- City Fajr Shuruq Duhr Asr Magrib Isha
- Dubai 05:31 06:50 12:15 15:12 17:34 18:53
Competition between websites offering to buy and sell products for free in the UAE is intensifying with the entry of a new player targeting the same customer base.
The latest entrant in the Dubai market is the Lebanese portal Elmazad.com, which is inviting users to "buy and sell anything free on the largest online market in Lebanon and UAE" is in competition with the more established Dubizzle.com, which has been in business in Dubai for five years now.
Even though it is still in its nascent stage in Dubai, Elmazad.com has ambitious plans for the UAE and aims to go across the Arab World. "We are the market leader in Lebanon and we see huge potential in Dubai," the portal's COO Hisham Ashakar told Emirates Business from Lebanon.
Dubizzle, on the other hand, which boasts a healthy growth over the past year in terms of both revenue and subscriber base, is unperturbed. "We are currently the market leader in classifieds in the UAE, and fresh competition helps to keep us on top of our game," JC Butler, Managing Partner of Dubizzle, told this paper.
"Furthermore, we believe there are many things we can learn from our competition, especially with a view towards expansion in the future into markets where we will be a new entrant battling against a market leader," he added.
Souq.com, another UAE-based player, which has moved away from being just an auction site to a more commercial website, claims to have recorded strong growth last year with a user base of more than 400,000 members.
"We are experiencing great growth in all our markets mainly due to our business sellers who now represent the vast majority of our inventory," confirmed Kirsty Melia, UAE Sales and Marketing Manager at Souq.com.
"Souq has seen this year a big shift towards the new items, pushed by the increasingly popular BuyNow format and by the free shipping that we are promotionally offering in this period to all the buyers," she added.
Butler added that Dubizzle sees the increasing competition as a good thing although he doesn't acknowledge Elmazad.com as competition just as yet.
"To be honest, there isn't a portal in the UAE that we recognise as a broad competitor of ours," he said. "There are a number of portals that overlap certain services that we provide, and in that way we compete, but I'd say that this competition has been steady over the past years. I do believe, however, that competition will naturally increase in the online space, and we see that as a good thing," said Butler.
The recent economic downturn has indeed boosted the prospects for the country's online marketplace, with a number of expatriates looking to buy or sell household goods as they move houses, cities and countries.
"We've seen across-the-board growth in both traffic and revenues," confirms Butler, adding that visits, page views and unique visitors to his website were up 222, 207 and 280 per cent, respectively, between January 2009 and January 2010.
"From July 2009 to January 2010, monthly visits to our Abu Dhabi site have grown 180 per cent with an average 20 per cent monthly growth," Butler added, highlighting the potential in the overall UAE market.
Despite the upbeat mood of the players, analysts believe the marketplace could soon get overcrowded, and that the bottom line of new or existing players could come under pressure, if more such websites are launched in the future.
"I think, there is not much space for new entrants in the market," said Laurent Patrick Gally, Vice-President of Research at Shuaa Capital, Consumer, Retail and Petrochemical Sectors. "If we talk about Dubai, there are roughly 1.5 million people. Dubizzle is quite a famous site and Souq.com has grown in reputation. There will be more choices with the entry of the third player, but after that if we are to see more players entering this market, the economics of those websites will become difficult unless they have something extra to offer than the already established players."
In fact, there are a handful of other websites, including the online versions of the classifieds supplements of some dailies, which are targeting the same audience.
"We are selling everything; so we cater to everybody in the market. We want to become the first website when customers think of buying or selling," Ashakar said.
While Elmazad has not yet seen any revenues from Dubai, the company is focusing on brand awareness and cornering market share. "We want to grow our market share right now," said the website's COO. "We have started marketing our website aggressively in Dubai by SMS, Facebook, other websites and through magazines. I can assure you that it is going to be the biggest E-campaign (mostly online) ever made in the Arab world. We are hopeful and are adding new subscribers on our website," he added.
Dubizzle, on the other hand, maintains that most of its income stems from varying forms of digital advertising of goods and services. The economic downturn may have given an impetus to the country's online marketplace, but Shuaa's Gally believes economic growth will not hamper this growth.
"People are more inclined to go for online selling during difficult times as the option of selling and buying things on the internet is convenient but that does not mean the usage of such sites should come down when the economy recovers. The prospects of online shopping are definitely better during hard times but it is the quality of experience and the success of the first purchase that is more important.
"For example, during good times, many people go to the dealers to buy cars but in difficult times, people tend to turn to classifieds due to the wide gap in prices. However, even in good economic times, people will still look for better deals and there will always be a price difference when it comes to dealers selling used cars as compared to vehicles being sold by individuals," he explained.
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