Shopping online yet to take off

Online purchases of IT and telecommunications products have not yet gained momentum in the UAE even though the country has one of the highest internet penetration levels in the region, say industry experts.

Analysts, manufacturers and retailers blame the "mall culture" for the slow pickup of e-retail or online purchasing in the Middle East. According to data from the International Telecommunications Union, internet penetration in the UAE stands at 34.8 per cent.

"One of the main challenges here is the mall culture as shopping is the best way of passing time, and therefore the requirement for going online is low," Mark Walker, Director, Vertical Industry Practice at research company IDC MEA, told Emirates Business.

"The online platform has not reached its potential. The right internet tools are available in the market to build a strong online platform," said Walker.

Dubai-based Computer Depot has been selling IT and telecom products online for two years. Its website has 1,000 visitors per day and three to five per cent of visits are converted into sales.

Managing Director Gaurav Brahmwar said: "The growth in online sales is slow at up to five per cent year-on-year, but it's a start. As consumers remember our retail outlet on Computer Street it is easier for us to build the trust factor, which is important in Dubai. At present the largest number of visitors are from the UAE but the website caters to the entire Middle East and Africa region."

The main challenge for Computer Depot is obtaining support from IT manufacturers. "Technology companies must support online platforms, and inducing customers to come online is the other big challenge," added Brahmwar.

Egypt's Nefsak is seen as a local version of Amazon in its home market. This online portal, which offers a wide range of products, including electronic goods, launched in January this year but already claims to have at least 50,000 visitors from Egypt every month, with 3,500 registered users. Egypt has 11 million internet users.

Sherif Nassar, Managing Director of Web Technology Company, which owns and operates Nefsak, said: "The registered users shop regularly and on an average spend up to EGP2,000 (Dh1,315). Because of the popularity of the website we are planning to include fashion and furniture and make it a complete shopping portal. It is accessible only in Egypt but there are plans to expand into the UAE, Jordan and Saudi Arabia."

While these portals are beginning to gain popularity they still have a long way to go, according to Khaled Kamel, General Manager of PC manufacturer Lenovo Middle East, Egypt and Pakistan. "Consumers in the Gulf will go on to an Amazon to shop but will not visit a local website. They want to feel and touch the products at the mall.

"Online sales have not added to business bottom lines yet but in countries such as Egypt customers are using websites to buy food, and advertising is seen to some extent on TV. IT retail can be conducted as a parallel platform."

PC hard drive manufacturer Western Digital says e-retail sales are still picking up in Western Europe.

Didier Trassaert, Senior Director of Emea branded products for Western Digital, said: "The market is growing in the Middle East but there is more pick-up of online purchasing – at least 10 to 15 per cent – in Western Europe.

The website retailers are able to display their entire range of products as there is no restriction on shelf space," said Trassaert.

Jimmy Patel, General Manager of Dubai-based retailer Jacky's Electronics, says some customers research products online but make the final purchase in a store.

"Less than five per cent of our sales are made online but there are indirect sales resulting from customers doing research online and then purchasing from a Jacky's outlet.

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