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|12 October, 2018

Dafza starts work on $871mln Dubai e-commerce city

Launched in 2017, Dubai CommerCity is spread over an area of 2.1 million sq ft in Umm Ramool,

Dubai Dubai Airport, Dubai Metro trains and Highway

Dubai Dubai Airport, Dubai Metro trains and Highway

Getty Images/ Harith Samarawickrama

Dubai Airport Freezone Authority (Dafza) and UAE developer Wasl Asset Management Group said early works have commenced on their ambitious Dh3.2 billion ($871 million) Dubai CommerCity project and the piling and shoring will begin next year.

Launched in 2017, Dubai CommerCity is spread over an area of 2.1 million sq ft in Umm Ramool, an area that witnessed a surge of 120 per cent in those looking to do business there according to ProperityFinder.

The duo said the investment value of Dubai CommerCity had increased by 18.5 per cent to Dh3.2 billion in total with an increase in the total leasable area by 32.5 per cent.

The figures were released ahead of the Dubai CommerCity first-ever participation in the Gitex Technology Week 2018, where it will showcase the development phases of the project and its solutions to global and regional e-commerce companies.

It is being forecast that the e-commerce market in the region will be worth $48.6 billion in 2022, up from an estimated $26.9 billion in 2018. As such, it is expected that Dubai CommerCity will gain strategic importance as it seeks to consolidate Dubai's presence as a major global e-commerce hub.

This will support the national economic diversification strategies and smart transformation plans by attracting foreign direct investment to the sector. The GCC is expected to contribute 43 per cent by 2022 from the Middle East and Africa e-commerce retail market, led by the UAE and Saudi Arabia, the region's largest and fastest growing markets.

"Dubai CommerCity is a strategic initiative that will position e-commerce as an economic driver for growth in Dubai. It aims to attract foreign direct investment within this sector, which is witnessing huge growth already in the Middle East, led by developments in Dubai," said Dr Mohammed Al Zarooni, the director-general of Dafza.

"In the UAE and Saudi Arabia, the market is expected to grow by 16.4 per cent over the next three and a half years. The UAE's e-commerce sector is expected to reach $10 billion by 2018 compared to 2014 figures of $2.5 billion, this is equivalent to a spectacular 400 per cent growth by the end of this year," stated the top official.

Dr Al Zarooni linked this growth to the youth demographics in the region, with high penetration rates of the internet, smart mobile phones and the use of social media.

According to reports issued in 2017 by the TRA, the rate of internet penetration in the UAE accounted for 90 percent of the population, some of the highest rates in the world. He highlighted the fact that it was not surprising that the youth continued to adopt modern shopping patterns, including the use of online platforms.

"We are creating value and benefits through Dubai CommerCity to make it attractive to investors and to enable them to benefit from the strategic location close to Dubai Airport, which gives them the opportunity to reach more than 2.4 billion people within five hours," remarked Al Zarooni.

"This will enhance the regional experience of their customers, accelerate deliveries, and increase their operational reach," he added.

Dubai CommerCity is aimed primarily at global and regional manufacturers, distributors and global and regional e-retailers, as well as ecosystem companies in the e-commerce industry such as e-payment gateway companies, internet service providers and others.

The e-commerce dedicated free zone is currently selecting a logistics service provider on-site to operate the joint logistics units to provide integrated services, said the statement from Dafza.

It is also in the process of testing the registration and rapid licencing of e-commerce companies with high automation and the provision of an intelligent and centralised CRM system which includes connecting the management of common warehouses and others with technology powered by the Internet of Things (IoT), it added.

Trade Arabia: Copyright 2017 Al Hilal Publishing and Marketing Group Provided by SyndiGate Media Inc. ( www.Syndigate.info ).

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