The coronavirus pandemic has shaken up the world economy to the core and the UAE is no exception. Every business in the UAE can feel the impact of COVID-19 to the deepest level. In this article, I will shed light on the impact of COVID-19 on the e-commerce sector in the UAE.
Tourists coming to the UAE all around the world are often surprised at the e-commerce scenario. This is because of the aversion of its citizens to online commerce. The culture of visiting malls to buy what one needs is a part of the social life of the citizens of the UAE. About 6 in 10 residents of the UAE visit malls once a week. Hence it is evident how relevant the culture of visiting malls is in the country. But with the onset of the pandemic, the COVID-19 impact on online retail is evident. People have redirected toward online shopping for health products during pandemic and it’s more likely to stay that way.
Why the UAE Shies Away From E-commerce
March 2020 saw the shutdown of businesses all over the UAE. Malls and public places bore a deserted look. Previously, malls witnessed a vibrant look with people thronging the markets almost daily. Retailers enjoyed the inflow of consumers buying their goods physically from their stores. The concept of e-commerce was always on the side burner. Let me explain how. A good chunk of brands have opened franchises in the UAE. In a bid to employ a discrete approach while dealing with associated risks and costs, brands have decided to leave the decision making to the franchisees. As a result, franchisees have become the focal point between their customers and brands. Hence it is understandable why the e-commerce sector is slow. This makes it necessary to highlight the COVID-19 effect on e-commerce.
COVID -19 Impact on Online Retail
The COVID-19 impact on online retail is one that cannot be ignored. The COVID-19 effect on e-commerce and COVID-19 impact on online shopping needs to be studied with utmost conviction to achieve a market where there is a little negative impact on online retail due to COVID-19.
Considering the fact that all businesses have been shut down since March, retailers are looking towards online e-commerce to compensate for the losses incurred due to the shutdown. Blending bricks and mortar commerce with the internet seems to be the only way to lessen the COVID-19 effect on e-commerce. This concept is known as the omnichannel business. Briefly, omnichannel business refers to the type of business where retailers have online as well as offline stores. In an omnichannel business, customers get to experience the mall-shopping experience with the added benefits of the online experience. Omnichannel business is a byproduct of COVID-19 impact on online shopping.
The impact of COVID-19 has forced retailers to adopt the omnichannel model of business.
COVID-19 Impact on E-Commerce Market
In the month of Ramadan, offline businesses took a hit with streets being devoid of any human activity. This was a blow to the cultural fabric of the country, which was used to teeming with life when Ramadan came around the corner. In an attempt to venture into e-commerce, DP World, the owner of Jebel Ali Free Zone and a global port operator with its headquarters in Dubai launched an online forum for local artisans and small businesses by the name of www.manasah.com. Now an important question comes to mind: Will the Coronavirus impact businesses open a new avenue for e-commerce with permanent solutions?
The answer is: – The COVID-19 impact on online shopping will certainly steer the UAE towards a more inclusive approach to e-commerce without shunning its robust offline market activities. The COVID-19 impact on the e-commerce market can be understood fully by understanding the omnichannel business.
Omnichannel Model of Business
Like mentioned earlier, visiting a mall in the UAE is more of an experience-enriching process than it is a necessity. Activities like eating out, getting your hair or nails done, visiting the salon and spa, or just letting the children play in the kids’ zone all comprise an experience that cannot be provided online. Besides, no amount of e-commerce can compensate for the thrill of going to an air-conditioned mall in the scorching heat to escape the mundaneness of life. It is a well-known fact that malls not only offer intangible pleasures but also retail items such as branded clothes and electronic gadgets.
The concept of click-and-collect comes into the picture in this pandemic situation. Customers can shop online for beauty and grooming from the retail stores that could now have an e-commerce presence, and collect the items next time they’re on their weekly trip to the mall. This would save them the time of having to stand and choose in the physical stores.
Enhanced Customer Interaction
The perks of switching to online businesses include better interaction with one’s customers. The coronavirus impact on e-commerce has led to business people to employ the internet to their advantage. With effective websites in place, an effective communication channel opens up for shopkeepers and their customers. For a customer to know when their favorite food items are in full stock so they can buy it from the stores enhances their trust in the brands that they buy from.
Around 35% of the UAE’s population consists of young people. This percentage consists of an aware, internet active population that would be willing to try out new avenes in online shopping. The coronavirus impact on e-commerce has paved the way companies opting to advertise their products to the youth through social media campaigns. Celebrity endorsements have increased online retail considering the COVID-19 impact on businesses. Youngsters are inclined to follow their favorite celebrities, emulate their dressing styles, and buy the products they endorse. Therefore, online retail can be enhanced, thus negating the COVID-19 impact.
The flourishing of e-commerce long after the pandemic is inevitable but the role that malls play in the culture of the citizens of the UAE is indispensable. Malls and shopping centers are tourist attractions and places to socialize. Therefore, it is highly unlikely to assume a complete takeover of bricks and mortar businesses by e-commerce. An amalgamation of e-commerce and physical businesses will further enrich the experience of shopping in the UAE.
In conclusion, one would say that the COVID-19 impact on the e-commerce market is a pathway for the intelligent to capitalize on effectively with powerful game-changing strategies.