Always multiple steps ahead, Dubai was preparing for an e-commerce boom before the COVID-19 outbreak, and was thus better equipped than most to handle the uptick.
As online retail continues to experience a boom throughout the world, officials in Dubai are taking advantage of the UAE’s geographical location and well-developed logistics infrastructure to claim a growing stake in the international e-commerce market. According to pre-coronavirus estimates for the MENA region, the e-commerce retail market is expected to grow by 20% in the next five years, reaching USD26 billion by 2022. Such figures outpace global growth, which is currently projected around 13% in the same time period. To take advantage of e-commerce fully, Dubai can leverage its dedicated ecommerce free zones to capture this potential.
Located within Dubai South’s enormous logistics free zone, EZDubai is set to become a world-class e-commerce hub, showcasing Dubai’s ability to stay ahead of the curve in logistics and supply chain solutions as technology changes the way goods move and the services they require. State developer Dubai South said the USD545-million project will create an e-commerce free zone measuring 920,000sqm that will offer international companies an ecosystem made especially for businesses involved in B2B and B2C services. Businesses will also benefit from the customary 100% ownership that comes with operating within free zones, a marked difference from the 49% stake foreign firms can hold when operating outside free trade areas in the UAE. Thanks to its location within Dubai South’s logistics zone and close proximity to Dubai’s international airport, EZDubai will have access to multi-modal logistics, the arteries for successful e-commerce ventures. With construction already started, EZDubai is being designed to attract leading logistics and e-commerce companies from around the world. And to this end, it already has. FirstCry, India’s largest specialist e-commerce store for baby and children’s products, plans to establish a fulfillment center in EZDubai to enable faster delivery between product vendors and customers across India. DHL Express has also announced plans to build a 3,200-sqm facility to handle rising B2C exports in Dubai South. Government and business leaders in Dubai are now acting quickly to build upon the business hub’s well-established investor confidence and business-friendly regulations to expand future growth through the booming online retail sector. In September 2019, Dubai South participated in the eCommerce Expo 2019 in Olympia, London, to promote EZDubai. “Dubai is rapidly gaining a reputation as an ideal e-commerce hub strategically positioned to serve the global e-commerce market following the steady growth of online shopping in the UAE and the Middle East,” Mohsen Ahmad, the CEO of Dubai South’s Logistics District, told the Emirates 24/7 news channel. Dubai officials have especially highlighted the coming airport-seaport corridor, being built as part of Dubai South’s port expansion, for its ability to move cargo between the port and the airport within 20 minutes. All these developments come as Dubai is seeking to position itself as a leader in the future of retail. Residents of GCC countries are predicted to make up 43% of the Middle East’s e-commerce retail market by 2022. At the same time, e-commerce purchases are increasingly taking place on smartphones, and recent studies have found that almost 100% of GCC millennials use a smartphone daily. To support this boom, Dubai will have not one, but multiple e-commerce designated free zones. In addition to EZDubai, Dubai Airport Free Zone Authority is launching CommerCity, a JV project with Wasl propery developers. Spotting the e-commerce trends early, CommerCity is on track for completion by the end of 2020. Such ambitious projects like EZDubai and CommerCity stand to benefit immensely, giving Dubai a leg up on the competition in other markets and competitive position to capture an even bigger slice of the growing e-commerce market.
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