Carrefour, the second-largest retailer in the world, has launched an online shopping portal for the UAE in a move analysts say will help to usher in a new era of e-commerce in the region. On the French retailer's new website, www.ic4uae.com , consumers from the Emirates can buy more than 3,000 non-food items such as electronic goods, homeware and beauty-care products.
"We live in the age of the internet and as Carrefour is committed to offering customers choice, flexibility and convenience, launching an online store seemed the next natural step for us in the region," said Henry Changeux, the head of Carrefour for the GCC. The French retailer has 37 hypermarkets across the Middle East, including 13 in the UAE, through a partnership with the UAE-based retail conglomerate Majid Al Futtaim.
It has also opened several Carrefour Express stores in the Emirates to expand its brand in medium-sized locations. While other internet start-ups such as Nahel.com and Aido.com have found relative success with UAE customers, Carrefour's entry into e-commerce marks a significant milestone in the regional development of the industry. There has been an online retail boom this year with at least eight e-commerce websites launched since January. But Carrefour is one of the first multinational companies to launch an e-commerce portal in the Middle East.
"Major brands entering into e-commerce with shipping will be a major boost for e-commerce volume in the region because these brands already have brand recognition and massive volume in terms of gross sales and clients," said Jawad Abbassi, the founder and general manager of Arab Advisors. Mr Abbassisaid that with Carrefour's big-brand status, its shopping website might harm smaller online retail players that competed with it on the same products.
But Sanjay Amarnani, the chief executive of Aido.com that sells electronic gadgets, mobile phone accessories, DVDs and games, said the entry of a major retail name such as Carrefour would help to overcome regional consumers' security concerns when using credit cards online. Most online purchases in the UAE are usually paid for by cash on delivery, retailers say. "I think it's a good thing," said the Dubai-based entrepreneur. "It will be healthy competition, and it will build up confidence in the economy that online is the way to go forward."
Carrefour plans to allow online shoppers to buy goods using credit cards and some debit cards, depending on the bank. The transactions will be handled by Emirates NBD, Mr Changeux said. "We don't expect everyone to start shopping online overnight," he said. "We are catering for a relatively small group of shoppers at the moment … this is still a new concept for the region and it is early days but we expect it will be successful."
Another problem for online retailers is delivering the goods to consumers homes in the UAE, where there is no addressing system. Mr Changeux said Carrefour would use the UPS shipping and tracking system to deliver to a home or workplace. The retailer will ask customers for as much information as possible when placing an order. Delivery will be free if the total cost is more than Dh500 (US$136), or UAE consumers will be charged about Dh12.
Other online retailers such as Nahel.com and Souq.com are expanding their delivery range to outside the UAE and across the region by the end of this year. Mr Changeux said Carrefour would deliver only to the UAE for the foreseeable future. There were no plans to expand its online offerings to include groceries as Carrefour "does not feel comfortable delivering grocery items because of the hot climate in the UAE".
Online shopping in the UAE represents only a small portion of the total retail market. Last year consumers spent about $19.6 million online compared with an estimated total of $10.9 billion of non-grocery retail spending, data from the research company Euromonitor shows. But by 2014, e-commerce in the UAE is expected to grow by 72 per cent to about $33.7m, the research company forecasts. @Email:firstname.lastname@example.org