Caught in Dubai traffic jams during several errands to buy his daughters’ school stationery, the entrepreneur Walied Albasheer came up with an idea.
Along with his friend and co-founder Abdelrahman Alhashmi, also a father of two, he developed the digital concept Stationery.ae to save parents the hassle of driving to the mall.
Their idea, he says, does away with the middlemen and the bother of warehousing stationery.
Instead, the website lists the inventories of vendors, allowing customers to buy retail and wholesale directly from the site.
That idea has now germinated into a start-up that will be looking for fresh funds in a Turn8 start-up accelerator’s pitch for investment on Saturday.
“We are targeting the schools and small to medium-sized enterprises [SMEs] to begin with,” says Mr Alhashmi, the chief commercial officer of Stationery.ae, referring to the numerous regulations and quotations necessary to go through to get orders from government and big corporates.
Stationery.ae is among a growing number of start-ups targeting the SME sector in Dubai as it grows in significance in terms of its contribution to the economy and banks bet on the smaller players.
More than 230,000 UAE SMEs comprise 95 per cent of the nation’s companies, contributing 40 per cent of the country’s GDP, says Dubai SME, a government agency that supports the sector.
“Our core business will be schools,” says Mr Alhashmi, 33, an Emirati entrepreneur who also has a debt collection company. “If we get inside a home, the father or the mother will get to know us and talk about us, and from there we can go places.”
In paper products alone, the UAE imported about Dh4.6 billion worth of goods in 2011, up from Dh3.1bn in 2007, according to UN Comtrade. Of that, Dubai accounted for more than 80 per cent of paper imports worth Dh3.8bn.
Since launching its trial version on January 1, Stationery.ae has listed an inventory of 50,000 items, such as USBs, print cartridges and gift items besides pens, pencils and the range of school and office stationery. It is also looking into schoolbooks.
“We have two major suppliers but have not gone to the market yet,” says Mr Albasheer, Stationery.ae’s 38-year-old chief executive, who is originally from Sudan. Wifaq Ahmed, a 22-year-old university student, is another co-founder.
Among the clients is Hoshan Pan Gulf, a Saudi company that has a distribution centre in Dubai.
Stationery.ae has adopted a drop-ship model, doing away with the need to have a warehouse to house its goods. In this arrangement, the start-up ties up with main stationery dealers and distributors, listing their inventory online. When an order comes through, the specific retailer delivers the merchandise directly to the customer. Stationery.ae gets a discount on the unit prices from the vendors.
“It saves us the overhead and eliminates human error,” Mr Albasheer says.
According to a 2009 joint study undertaken by City University of Hong Kong and the University of Maryland, such a model can give online retailers an average profit 5.18 per cent higher than that of a traditional retailer.
Mr Albasheer agrees. The main supplier gives Stationery.ae a 30 to 60 per cent discount on prices, and for the customer it can translate to a 10 to 15 per cent discount on market prices. The model does, however, come with its limitations, such as updating the inventory regularly and removing items that do not move too well.
Mr Albasheer says the technology checks the supply with vendors, and only those available are displayed on the website.
Currently, website updates are weekly, but the founders want to make these daily.
Set up with the founders’ investment of Dh50,000, the company also received US$30,000 when the i360 accelerator accepted them six months ago. It also won the Pitch for Investment competition at the first SME Congress and Expo in Abu Dhabi last month. Stationery.ae has a team of seven staff members and is looking for $350,000 in investment to cover its operations for next year.
And the founders expect to move beyond the home market with plans to enter Saudi Arabia, Qatar and North Africa at the beginning of next year.
“Our business model is complementary and not competing with anyone,” Mr Albasheer says. “We expect the stationery market to get consolidated due to competition and government regulation.”