Has Online Shopping Overtaken Malls In The Middle East?
With the internet now shaping global retail and consumerism, there has been a seismic shift towards online shopping in the GCC – despite the mega-malls on our doorstep.
Online shopping is booming worldwide, with internet sales set to top Dhs785 billion and Dhs1.3 trillion by 2017 in Europe and the US respectively. But, perhaps more surprising, is the fact that it’s changed the landscape of retail in the Middle East; a region famed for its luxury mega-malls.
It’s hard to imagine that just ten years ago, you could really only buy flowers and flights on the web in the UAE, but now, as long as you have a Wi-Fi connection, you can order services and products from any part of the globe with a click of your smartphone. This year, online sales in the MENA region are set to top Dhs7.34 billion, with the UAE, Saudi Arabia and Egypt among the most booming e-commerce markets.
Dubai may be home to the world’s biggest mall, but it is also home to the highest number of online shoppers in the UAE. According to a recent survey by Awok.com, 46 per cent of Dubai residents purchased goods online, compared to just 27 per cent in Abu Dhabi and 10 per cent in Sharjah. A separate study by Network International found that over a third (34 per cent) of UAE residents make online purchases between one and five times a week. Young consumers are the most likely to opt for the convenience and immediacy of online shopping; shoppers aged 25-34 make up 65 per cent of the UAE’s online shoppers, say Awok.com. And tech-savvy millenials are using their smartphones to shop: more than half of online transactions in the UAE are done on a phone.
But it’s more than just convenience driving shoppers online – it’s the temptation of discount prices. The increasing popularity of daily-deal sites such as Groupon and Cobone, as well as home-grown online stores like Alshop.com and Souq.com offering shoppers up to 15 per cent discount on store prices, mean that savvy shoppers can get more bang for their buck online.
Then there’s the rise in flash-sale events online, like Black Friday, not to mention discount codes, cashback sites… It’s easy to see why you can shop smarter with a smartphone. At the touch of a button, you can quickly compare prices, read reviews and buy slash-price products. The internet is also awash with internet shopping hacks to save you more dirhams (for example, if you pop an item in a basket but don’t complete the purchase, many retailers will email you a money-off voucher) so it’s tempting to turn your back on the malls.
A recent study by The Intelligence Group (TIG) found that 72 per cent of millenials research and shop their options online before making an in-store purchase. While stats compiled by MineWhat.com suggest that on average, a consumer will visit three online stores before making their purchase.
And the internet is not only changing how we shop but when. When you no longer need to get dressed and wait for the mall to open to shop the new season trends, you can fill your basket from your bed. Retail giant John Lewis recently reported a 30 per cent increase in online shopping between the hours of midnight and 6am.
But it’s not all about thoroughly researched bargains. Internet shopping has also meant that shoppers are much more reactive: after Kate Middleton wore a printed Anita Dongre dress at a cricket ground in Mumbai, the Indian designer’s website crashed. In fact, the influence of the ‘Kate Effect’ on online shoppers is said to be worth Dhs4.8 billion. And marketers are cashing in on the power of celebrity influence on online shopping: step forward the sponsored tweets.
Companies can now solicit celebs to tweet on behalf of their products, hoping that the star’s thousands of followers will dutifully click through and buy whatever wares they are touting. This means the pace of shopping is faster than ever: trends are coming and going as quickly as a 40-character tweet.
But not everyone is enamoured with the UAE’s booming e-commerce industry: bricks-and-mortar stores are increasingly finding it difficult to compete. Plans for the eight million square foot Mall of the World have been downscaled, while the International Monetary Fund (IMF) cut its projections for the UAE’s economic growth to 3.2 per cent this year; down from 4.5 per cent in October.
However, many in a region that’s enjoyed a decade-long love affair with the mall still prefer to frequent the luxury of the air conditioned shopping centre over clicking online. Firstly, there is the security issue: many in the region have been slower to adopt online shopping over fears about putting their personal banking details online. According to Onecard, an online payments company headquartered in Riyadh, 56 per cent of internet users in the MENA region said fraud was their main worry when buying online.
Then there is the fact that shopping in Dubai is something of a leisure activity in its own right. Fashion designer Marc Jacobs recently echoed this sentiment when he expressed his concerns over the impact of online shopping on the fashion industry.
“The thing that’s changed fashion as much as sport, the news or publishing is the internet. That information is so readily available is a blessing and a curse because people’s attention span is getting shorter and shorter – maybe that’s a good thing, I don’t know,” he told Vogue.
“I think human contact and the sort of pleasure in actual face to face communication or social situations – the idea of actually enjoying shopping for clothes, to touch fabrics and try things on, all of that to me feels like it is becoming archaic when I hear people say they would rather order it online, who wants to stand in line at a store.”
However, when you are living in a retail paradise with luxury stores and gigantic malls on your doorstep, some shopping enthusiasts would argue there is no substitute for the real deal.
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Words: Aoife Stuart-Madge