Dubai govt-owned e-commerce site to expand in Gulf

ZAWYA

DOW JONES

DUBAI A new e-commerce website owned by the Dubai government plans to aggressively expand its operations in the Arabian Gulf as online spending is forecast to reach $15 billion within two years, according to the website’s managing director.

Tejuri.com, an online retailer and a fully owned subsidiary of Istithmar World, aims to deliver a wide range of products throughout the Gulf, eventually selling to the whole of the Middle East and North Africa within five years, Ayaz Maqbool, managing director of Tejuri.com, told Zawya Dow Jones.

“We are doing a focused marketing launch in the UAE, but our next launch is Saudi Arabia,” said Maqbool. “We will look to cover the whole Gulf and then go beyond that.” Tejuri.com brands itself as an “e-shopping mall” and offers retailers registered in Dubai with the Department of Economic Development, or DED, an e-commerce platform to sell their products.

All the logistics, delivery and marketing is handled by the website for a commission rate and administration fee.

The website was created in conjunction with the DED to tap the growing market for e-commerce spending online and help grow the “digital economy” in the United Arab Emirates, Maqbool said. It sells a range of categories, including electronics, sport, furniture and beauty, and currently delivers in the UAE But the website has plans to expand delivery and marketing efforts throughout the region, acting as a sales tool for Dubai-based retailers.

Tejuri.com hired Nielsen Holdings in 2011 to examine the e-commerce market in the Gulf and found that two thirds of spending is on websites based outside the region, Maqbool said.

Estimates vary on the total size of e-commerce spending in the Gulf, but analysts expect the market to grow dramatically in the next few years as Arab consumers warm to shopping online and overcome fears of fraud and entering their credit card details on websites.

One study from Interactive Media in Retail Group, based in London, forecasts total e-commerce spend in the Gulf to increase from $3.3 billion in 2010 to $15 billion by 2015, and the growth in the market has recently caught the eye of global investors.

Tiger Global Management, a New York investment firm known for its early stage investing in tech startups such as Facebook, Zynga and LinkedIn, acquired Middle East daily deals website Cobone.com last week for an undisclosed sum.

Meanwhile, Souq.com, an online retailer akin to Amazon Inc, Namshi.com, a fashion retailer, and MarkaVIP.com, a website that provides discounts on luxury and designer goods, have all received funding from international investors, such as JP Morgan, Blakeney Management South African media firm Naspers, in the past year. Istithmar World is an investment arm of the state-owned Dubai World, which includes companies such as DP World and Drydocks World.