Bookseller may look to add e-books to internet orders for physical books on its new website
Magrudy's returns for net earnings
The UAE-based bookseller Magrudy's is to launch an online store within a year and plans to add e-books to its virtual shelves. Jeremy Brinton, the retailer's chief executive, said he planned to launch the first phase by January 31 next year, making its stock of more than 35,000 books available to buy online.
"I think there is a paradigm shift in terms of customer preferences," Mr Brinton said. "There is a greater adoption by customers of e-content, e-books ? it is very important for us to embrace this paradigm shift." Last year, UAE consumers spent an estimated US$19.6 million (Dh71.9m) on online purchases. Online shopping in the UAE still represents a fraction of the total retail market, compared with an estimated total of $10.9 billion of non-grocery retail spending in the country, data from the research company Euromonitor shows.
But e-commerce in the UAE is expected to grow by 72 per cent to about $33.7m by 2014, Euromonitor forecasts. And increasing numbers of entrepreneurs are setting up e-shops to capitalise on the trend. At least eight new online shopping websites have launched in the past year, including the Islamic clothing website 3abaya.com, Aido.com and the luxury shopping clubs Sukar.com and Fashionation.me. Mr Brinton said Magrudy's had an e-shop in the late 1990s, but it was before its time. "At that time, it was a revolutionary business model for this region," he said. "The reasons are that maybe in terms of the penetration, and the customer uptake, it was too soon."
Internet penetration in the UAE has since improved and more people have become comfortable using their credit cards online to make purchases. But concerns over secure payment systems and the high cost for retailers to process payments online continues to be a hurdle. For those UAE residents who do shop online, however, books are the second most popular purchase, a recent survey conducted by the research company Nielsen showed.
When asked in March what online shoppers intended to buy over the next six months, 29 per cent of UAE respondents said books. Airline tickets was the most popular choice at 51 per cent and hotel reservations came in third at 27 per cent. Magrudy's will be delivering solely in the UAE at first, Mr Brinton said. It was also talking with publishers to introduce e-books later. This is part of the bookseller's long-term push to diversify as e-readers such as Amazon's Kindle and the iPad grow in popularity, he said.
"We have to look at the business model and we really have to make plans for that in the eventuality that certain [book] genres will shrink, certain categories will shrink," Mr Brinton said. The company is also seeking franchise partners to open Magrudy's shops in other GCC countries, he said. Magrudy's, which has been selling books in the UAE for about 35 years, intends to remain primarily a bookstore but is expanding its non-book offerings, which include toys, games and making school uniforms, Mr Brinton said.
The retailer is also branching out into new segments, such as partnerships with universities in the country. Magrudy's is the official bookseller at New York University Abu Dhabi's campus and at Zayed University, he said. "That demographic is very important to us because they are the decision makers and educators of the future," Mr Brinton said. email@example.com