Starting an e-commerce firm in Dubai has turned out to be the dream of every tech-savvy entrepreneur as the industry is poised for solid growth on the back of technological advancements and the drastic changes in consumer behaviour due to the recent Covid-19 pandemic. Apart from that, the success of UAE-based e-commerce platforms like Noon, Souq.com (now Amazon.ae), and Careem Cab testifies that Dubai is a fertile ground for e-commerce business. The emirate is known for high digital penetration, pro-active government policies towards e-commerce, and the rise of tech-savvy consumers that makes the e-commerce business more profitable. Also, Dubai has a dedicated e-commerce strategy to attract foreign investments into the sector. The e-commerce industry is estimated to contribute AED 12 billion to Dubai’s GDP by 2023.
The year 2020 has brought much disruption in the e-commerce sector that witnessed drastic changes to consumer behaviour in the UAE. A major contributor to this change has been the economic uncertainty precipitated by the COVID-19 pandemic.
Most of the brick & mortar traders felt the heat of the Coronavirus pandemic as the countries including the UAE enforced stricter lockdown measures. As the ‘stay at home’ policy became the norm, consumers relied upon e-commerce platforms to shop for both essential and non-essential things. A survey conducted by the Kearney Middle East showed that 79% of the UAE consumers shifted their shopping preference in favour of e-commerce platforms. Nearly half of the respondents are planning to continue with the online shopping trend even after the lockdown was lifted. The e-commerce market is not oversaturated yet and the fresh changes in consumer behaviour are a good indication of the growth prospects of e-commerce businesses in the UAE.
However, procedures for the business setup in Dubai may appear to be complex due to the different regulations in the mainland and the free zones. E-commerce entrepreneurs need to follow certain guidelines while establishing a company in Dubai. The following is a checklist for the investors who are planning to set their base in Dubai:
The e-commerce entrepreneurs planning to start their business need to make a strategic decision about the jurisdiction in which they should set up their company. The investors have to make a choice between the free zone and mainland company formation depending on their business requirements. With a mainland e-commerce license, entrepreneurs can trade their products directly to the local market. If the investors decide to form an e-commerce company in the free zones, then they have to reach an agreement with a supplier to sell the products. The mainland company formation requires a physical office where the free zones offer many viable facilities including the flexi desks for e-commerce operators. The e-commerce companies can consult the best business setup consultants in Dubai, UAE to decide on the jurisdiction as they will provide expert advice on both mainland and free zone company formation.
For any e-commerce company to kick off the foremost thing is to develop and launch a website. The website is the platform through which the companies can facilitate the trading of goods. The commerce entrepreneurs need to invest in website development to build a robust interface to showcase the products and interact with the customers.
The e-commerce companies need to have a strong domain name which would be the address of the company’s website. The domain name will also be the company’s name in most cases. The e-commerce entrepreneurs need to register the domain name for the company’s smooth take off.
Protection of intellectual property rights is a crucial aspect of the business that most e-commerce startups overlook at the initial stage. E-commerce companies need to register their trademarks right from the start to secure their brand value. Building a brand image is crucial for every company and registering the trademarks with the UAE Trademark Office is the first step in this process. The companies can trademark their brand name, logos and designs to build a strong brand image in the minds of the consumers.
For an e-commerce business, it is crucial for integrating different payment methods for its consumers. The payment gateway should be safe and secure and should include credit card payments. Most of the e-commerce platforms also include the cash-on-delivery (COD) system which would be useful in different situations.
The e-commerce companies that deal with consumer goods to trade need to have proper warehouses for the storage of goods. Such businesses need to secure a warehouse and also an efficient logistics service. If the jurisdiction is mainland, the companies also need to set up an office space. For mainland business setup procedures, the e-commerce companies would require the assistance of reputed business setup consultants who would make the company formation procedure smooth and quicker.
The popularity of the e-commerce industry in Dubai is rising mainly due to factors including the emergence of a digital-savvy population, high digital penetration and the rise of mobile wallet payment methods. Moreover, a global pandemic like COVID-19 has turned out to be a blessing in disguise to the online shopping platforms in Dubai as consumer behaviour changed as a result of precautionary lockdowns. However, the entrepreneurs may find themselves confused about the jurisdiction to set up their company and the various regulations attached to it.
Whether to set up in mainland or free zones is a strategic decision that may have a lasting impact on their business. This is where a reputed company formation specialist like Jitendra Business Consultants (JBC) comes in handy for e-commerce entrepreneurs. JBC’s highly qualified business setup consultants are well-versed in all the local laws and regulations and can help the investors to choose the right jurisdiction. JBC has helped a good number of clients in setting up an e-commerce firm in Dubai, UAE. JBC’s team of company formation specialists assist the clients in all steps of the business setup process right from registration to incorporation. Being a one-stop-shop, JBC also offers other relevant services including the registration of trademarks for e-commerce companies.
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