With more than 100 stores and thousands of products for sale, it is like many other malls in the UAE – except shoppers do not visit Tejuri the traditional way.
Tejuri’s virtual mall seeks to exploit online market’s growth in UAE
With more than 100 stores and thousands of products for sale, Tejuri is much like many other malls in the UAE – except shoppers do not visit it the traditional way.
More than 1 million customers have flocked through the online mall’s virtual doors since it launched in March this year.
Tejuri, a procurement and sourcing engine for the Dubai Government, launched the venture in 2010 after spotting an opportunity in the online shopping sector.
Market research commissioned by the company revealed that the industry across the GCC was worth US$3.2 billion in 2010. But almost $2.2bn of that was going to websites outside the region.
“[This] became a bigger worry for us in terms of how we can plough this money back for the interests of the retail industry of Dubai in particular and the UAE in general,” said Ayaz Maqbool, Tejuri’s managing director.
Tejuri decided the only thing to do was to create an online version of Mall of the Emirates or Dubai Mall, where the entire infrastructure was built and managed by the company.
The aim was to get retailers online in about two weeks. But it took the company two years to build the infrastructure necessary to make it happen.
It involved partnering with companies such as Microsoft, which provided the end-to-end technology, Skynet Worldwide Express and Aramex for the deliveries, and Emirates NBD to set up a payment gateway to save retailers from having to go through the lengthy process of securing permission from their banks to accept online transactions.
“Having finished the entire infrastructure to enable this experience, we started to approach the retailers. And you would imagine that the journey was very tough to start with because the industry here is very much brick and mortar,” said Mr Maqbool.
“We were talking to retailers who knew the power and the opportunity of the e-commerce, but they also knew what it takes to get into e-commerce. So having explained to them the amount of services that Tejuri has packed together in terms of offers, we saw a very positive response.”
The Tejuri team managed to persuade a number of big names to get on board.
Initially the focus was on electronics, which market research revealed people were most comfortable shopping for online. And having secured names like Sharaf DG, Eros Group and Jumbo Electronics, Tejuri expanded into the categories of fashion and beauty, home and décor, and sports.
But it was not all plain sailing.
Some retailers did not appreciate the importance of presentation online as many brick-and-mortar businesses never had to present a polished image of their products. To get around the problem, Tejuri set up a studio with photographers and stylists to ensure that the products looked good.
And some brands, particularly the biggest, were reluctant to let distributors sell their goods online because they wanted to reserve the business for themselves.
Tejuri has, however, made some important inroads recently.
“It took us a long time but eventually they allowed the local distributor to take Nike online on Tejuri,” said Mr Maqbool.
And most recently this week, it signed a deal with two of Procter & Gamble’s UAE distributors to sell a selection of its products – including those from brand names such as Braun, Pampers, Gillette, and Olay – online.
“This has opened up a completely new category for us and P&G is the largest brand owner in the fast-moving consumer-goods segment. It is a great moment for us,” he said.
Like its brick-and-mortar peers, the online mall charges retailers rents and a commission when a sale is made. It has launched with 35 stores and aims to reach 70 before the end of the year. But with one month still to go, it has reached 102 and expects to sign as many as a dozen more. It aims to reach 200 next year.
“An online mall such as Tejuri is likely to be successful in the sense that online internet retailing is dominated by apparel internet retailing, [which expects] to see 47 per cent growth in retail value terms in 2013 followed by housewares and home furnishings,” said Fatemah Sherif, a research analyst at Euromonitor International.
Euromonitor expects the online shopping sector in the UAE to grow 17 per cent by the end of the year. Although the sector shows promise, Tejuri and other online UAE retailers face an uphill challenge.
“In value terms, [online retail] only contributes to 1 per cent of the total retailing industry in the UAE,” said Ms Sherif. “Furthermore, expatriates also still see shopping in malls through store-based retailers as a form of leisure activity and will continue to grow as more tourists influx the country.”