E-commerce in UAE to hit $36bn by 2010

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Global e-commerce is expected to top some $13 trillion (Dh47.7trn) by 2012, with the UAE alone accounting for more than $36 billion two years before that, an expert in the field told Emirates Business. Muhannad Mohammed Ebwini, General Manager, OneCard, a multi-functional, secured e-payment service, said in an interview the present volume of e-commerce in the GCC had reached $100bn. He said the technology environment in the UAE was a model for attracting investments, especially in Dubai Internet CityDubai Internet City. He called on Arab countries to follow in the steps of Dubai, as the emirate has the best environment for the launch of e-commerce projects. While Ebwini put the expected annual growth of e-commerce in the Gulf at some 20 per cent, he said the rate of growth in the UAE might reach 50 per cent once the global financial crisis has abated.

What do the figures say about the volume of e-commerce globally, in the Gulf and the UAE?
It amounted to $100bn in the GCC [according to Gold Financial Consulting]. Also, e-commerce in Saudi Arabia topped $12bn a year, according to the Al Madina daily. A quarter of UAE residents used the internet for commercial transactions. Studies have shown UAE e-commerce will total $36bn by 2010. Studies also indicate that global e-commerce will be $13trn in 2012, with the involvement of 850 million people around the world.

What are the reasons for the lack of growth in e-commerce in the Arab region?
There are several obstacles, including technological hurdles, represented in weak electronic infrastructure, weak technological culture and awareness among people, and shortage of trained personnel. There are also commercial obstacles, such as low levels of experience and lack of aid needed to transfer commercial activities into electronic ones. E-commerce in the region is limited between trading companies, or between them and their local suppliers. And with the shortage of capital in most Arab countries, it would be difficult for individuals with ideas to obtain financial backing to set up their e-commerce projects. There are governmental challenges, too, in the form of policies adopted by some governments, which have a direct or indirect effect on the spread of e-commerce. Social and cultural aspects of some nations form obstacles for e-commerce. Legal challenges are involved in e-commerce exchanges. In the first phase that precedes the contracting process, obstacles and challenges emerge - most prominently how confident the customer is of the reality of the commodity or service offered, how legitimate the website is in terms of intellectual property and whether it protects the consumer against fraud, or how taxes on e-commerce returns are calculated. Also, there is the problem of how either party can verify the integrity of the other. And here comes the need for a mediator who would do the verification. Then there is the issue of how reliable the e-contract is hence the emergence of the idea of digital signature to replace the normal signature. Another challenge is the payment through credit cards.

Does the technological environment in the UAE help in the spread of e-commerce? And what is your estimate of its growth in the Gulf and the UAE?
The UAE is the most important and most advanced Arab country in e-commerce and its technological environment is a model for attracting investment, especially with the Dubai Internet CityDubai Internet City - one of the most important technological landmarks of the Arab world. And here I think all Arab countries should follow suit and have several such models. As for the rate of growth in the Gulf in general, I expect it will reach 20 per cent. In the UAE, I expect it will be up to 50 per cent once the global economy recovers from the financial crisis.

The UAE has laws to combat fraud and imitation. To what extent do they help?
A key element to support e-commerce is the presence of strict laws and legislations to fight fraud and imitation, and to protect intellectual property rights.

What are the commodities mostly exchanged via e-commerce?
Books and modern electronic equipment, such as mobile phones, are the most exchanged commodities.

In e-commerce, how are things purchased on the internet, starting from selecting the commodity until it is received by the customer?
It starts with a search on sites such as Amazon, eBay or OneCard. Then the payment is made through Visa or Master Card and the shipping method is selected.

What are the security elements available in e-commerce?
The issue of security on the internet tops the list of concerns of most users, especially those who desire to buy through the internet. Therefore, you find the majority of users refraining from buying on the internet until the picture is clear and they are aware of the secure use of credit cards. And the main reason behind increased confidence in commercial transactions on the web is the SSL, or secure sockets layer, which is a programme for the transfer of data and information between two systems in a safe manner.

How many companies are involved in e-commerce in the Gulf and the UAE?
There are no official figures, since some e-commerce sites are not licensed or have licences for activities other than e-commerce, such as a supermarket or a general service office. The reason is the absence of e-commerce legislations. But I can put the figure at scores of companies.

Do the Gulf countries, particularly the UAE, represent a springboard for e-commerce companies?
Gulf countries in general make a fertile environment for the growth and development of e-commerce and these countries are still hungry for e-commerce projects. Dubai has the best environment for e-commerce projects since it has free zones with proper infrastructure and a large amount of expertise, as well as laws and legislations that support e-commerce.

What are the legislations that regulate and monitor e-commerce, and is there a need to update them?
The UAE was the first Arab country to issue a law to regulate e-commerce. That was in January 2006. Also, the federal law on e-commerce recognises an e-signature on the internet or e-mail, and therefore considers computers as approved tools for signature, reliable in any judicial disputes. There is a need to develop and update legislations in the Arab World, especially now that this sector is growing fast.

How has e-commerce been affected by the global economic crisis?
The whole world has been affected, and it is only natural that e-commerce, too, would be impacted. Many companies have cancelled orders or reduced their volume of demand as a result of shrinking markets. Also, the consumer has rationalised his expenses. The most affected commodities are luxury products.

Muhannad Mohammed Ebwini, General Manager, OneCard
Ebwini is the General Manager of OneCard since January 2005 and has been instrumental in its winning the Best Strategic e-Commerce Portal Award in 2009 (Pawa 2009). Apart from the UAE, he is in charge of operations for Egypt, Saudi Arabia and his native Jordan. Before joining OneCard, he worked with Mubasher Telecom Services in Saudi Arabia as General Manager. He has also worked as Business Development Manager at Maktoob.com.

Ebwini has an MBA from the New York Institute of Technology's Amman Branch and a BSc in computer science from Princess Sumaya University for Technology, Amman.

By Mohammed Elsidafy

© Emirates Business 24/7 2009