He said he got the full amount two months ago from the young Indian investor who represents a trust that includes other investors. James said the money will be spent on developing the website, growing his team beyond its current 15 members and finance the company’s expansion into Saudi Arabia. “We have got plans for Saudi. It is the biggest market in the region and it is a huge opportunity especially when you look at the millennial demographic, the Saudi population,” James said. Around half of the Saudi 32 million people are aged between 15 and 39 years old, according to the kingdom’s General Authority for Statistics.
James said that his company plans to launch an office in Saudi Arabia as the local laws require physical presence and a local partnership for him to access the market. He said the company will consider raising more funds for Saudi Arabia at a later stage. Asked about when the Saudi plans are expected to take place, James said “within the next 12 months”.
Saudi Arabia is the biggest economy in the Middle East and the Gulf’s most populous nation.
Website’s name, location and sales
James said the decision to change the website’s name from Dubai Rocks was part of the company’s new strategy to expand beyond its current home base and not limit it to consumers in the emirate. He said his website receives hundreds of emails and WhatsApp queries per month and the company’s sales are growing by double digits per year. However, he did not give details about the year-on-year sales figures or exact growth rates.
James said the introduction of a 5 percent value-added tax (VAT) in the UAE in January, and which was applied to diamond jewellery, has slowed growth in the market as a whole this year. Last year, several officials from the gold and diamonds industries asked the UAE government to exclude the gold and diamond sectors from paying VAT.
Dubai is a world leading diamond hub. The value of the emirate’s diamond trade grew from $3.5 billion in 2003 to around $26 billion in 2016, according to a press release issued by the Dubai Multi Commodities Centre (DMCC) last October.
Asked why he chose the UAE as a base for his business, James said: “Dubai is the world’s third largest trading hub for diamonds.… You have all of the big diamond wholesales allocated… it is very easy to get diamonds from anywhere in the world shipped to here.”
Male and millennial shoppers
The 1.5 million dirham funding news was announced in a press release issued by the company earlier on Sunday. The press release said the website is eyeing “male shoppers” and “the millennial generation shifting from traditional ‘brick and mortar’ offerings in favour of online retailers”.
The e-commerce market is growing at a fast pace in the GCC - a region with a mainly young and tech-savvy population. It is forecasted to grow to $24 billion by the end of the decade up from $15 billion this year, according to a report issued by A.T. Kearney consultancy firm.
James said that 70 to 80 percent of his customers are males.
“We are not only targeting males. But I think it is a product of the fact that most guys like to surprise their partners with a proposal. So if they are to surprise their partners, they are not going to get their partners involved in the search … Again it depends on the culture and where people are from, but generally speaking the guys like to keep it (the buying of an engagement rings) a secret.”
Asked about what is special about the millennial shoppers, James said “those are the ones that are going to get married, right? But we target everyone… second marriages too… But the most demanding customer is for sure the millennials, so if you get it right with the millennials, then generally everything else falls into place.”
(Writing by Yasmine Saleh; Editing by Shane McGinley)
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