How to Start an E-commerce Business in Dubai, UAE

March 11, 2022
E-commerce Business in Dubai

Many entrepreneurs and investors flock to the UAE to start the business of their dreams. Due to the ease of business setup in Sharjah as well as its lucrative market filled with high spenders, the country shows active encouragement for those who wish to start a business of their own. Even in the online sphere, the country stands out amongst the rest. With an E-commerce market valuation of over US $10 billion, the UAE is a leader within the MENA region, which is astounding considering its population. Over 81% of the UAE’s adult population engages in online shopping, purchasing products through various online platforms. 

However, as a new or aspiring entrepreneur, there may exist a few misconceptions regarding setting up an e-commerce store that are completely different from reality. In this article, we will break down the 5 biggest myths surrounding e-commerce business in Dubai, UAE

Myth 1: Setting up an online store is inexpensive

The biggest myth surrounding the e-commerce business in Dubai, UAE space is that starting one is inexpensive. This, however, is far from the true scenario. E-commerce businesses may be cheaper than your average brick-and-mortar store, but they are by no means ‘cheap’. Underestimating how much you will need to start your online business is the first pitfall that can ruin everything before it can even begin. Assess the costs that your business will need to incur, from one-time investments to minor everyday items. A budget can give you an idea of how much it will cost on average to start and maintain your online business.

Myth 2: Starting an online business is easy

Though you may not have to go down the more traditional means of starting a business, the effort to start and maintain a successful e-commerce business in Dubai, UAE should not be downplayed. Lack of insight and expertise in the field can make your business blend in with the hundreds of stores that exist online. Continuously creating strategies to garner user attention and lead conversions is part and parcel of the online business process and can enable your business to stand out amongst the rest.

Myth 3: A great website is the key to business success

An intuitive website with sleek design should not be the end goal of an online business, but rather a starting point to convince the user that the business provides great offerings. Focusing solely on web design can backfire on your business, since users will leave as soon as they realize that there is no actual substantial content on the website. Creating a website that is interactive and aesthetic while prioritizing the content, products, and services the business offers is a great balance that can boost your business’ reputation and revenue. This is a key area to keep in mind while starting an e-commerce business in Dubai, UAE

Myth 4: Low prices can boost sales

The trend with most e-commerce giants like Amazon show that online sales and low prices are what makes e-commerce a successful mode of business. This low-cost model is not viable for most businesses. Underselling your products for long periods of time can mean decreased profits and can position your business as a store that always provides low-cost items in the minds of the consumers, making it difficult to maintain proper pricing strategies. Setting effective pricing strategies with the occasional sale held a couple of times a year can create a realistic and long-term model that your business can follow and thrive off of.

Myth 5: Modes of payment aren’t important

Many new online entrepreneurs neglect payment modes and how online payments function on their e-store. Overlooking this aspect can mean losing customers over something that is completely avoidable. Creating effective modes of payment, whether that be through debit/credit cards, Apple/Samsung pay, or cash on delivery, can boost your business’ reach effectively. Moreover, for those who prefer online payment, creating a safe and secure payment gateway is crucial in making sure that your customer has a great shopping experience from beginning to end.

Now that you are aware of the myths and realities of setting up an e-commerce business in Dubai, UAE, here are the steps involved in setting up your ecommerce business:

How to set up an e-commerce business in Dubai, UAE:

1. Choose your line of business and business license

Once you’ve decided to start your business online, it’s time to decide what services or products you’d like to sell. It can be anything from pottery to electronics, the sky is the limit. Based on your choice of economic activity, you can begin to decide your license type. Some business activities may require more than one license or a different license altogether, but most firms opt for an E-commerce license to start their operations. This license covers most business activities across various online platforms and allows for the trading of goods and services through the medium of the internet.

2. Choose the correct jurisdiction and acquire a trade license

Choosing between a Free Zone and the mainland can entirely rely on the character of your online business. A mainland provides you the liberty to trade or sell your product and services on to the native market whereas a Free Zone license would force you to figure with an area distributor. In this case, consider the influences from which your business can profit more in terms of market reach and scalability.

3. Develop, build, and launch your website

The most vital side of your e-commerce business is your website. It may take time to test & build your website, however, it’s worth the time and energy because it can function as your platform to showcase your product or services, a platform to achieve and gain customers, and your primary tool for creating profits. Therefore, to build a profit-generating website you have got to keep the following things in check – its user-friendliness, net maintenance, secure hosting, and mobile usability among different things.

4. Include online payment gateways

As an e-commerce business in Dubai, UAE, it’s necessary to give customers different payment choices. Integrated secure payment gateways that embrace MasterCard payments and postpaid card systems are the foremost convenient ways. Another payment choice is cash-on-delivery (COD), which comes in handy during other times.

5. Secure supply, storage, and delivery

If your online business involves a physical product to sell or trade, it’s obligatory to possess correct warehousing to store your product. This issue is equally vital while deciding the jurisdiction to set up your company. Once you secure a warehouse and workplace house, a subsequent issue on your list is to ascertain a reliable supply system to make sure that the products are delivered efficiently to your shoppers. You can go for a third-party supplier or build your own.

6. Market your product or services

Once your business is prepared to roll into the market with everything in check, everything still boils right down to your selling strategy. The most effective way is by targeting the correct market for your product and services. Consequently, make an effective marketing plan that aligns your product and services to the requirements and needs of your target shoppers.
These are some of the steps you would like to contemplate before beginning an e-commerce business within the UAE.

Why set up your e-commerce business in Dubai, UAE in a free zone?

Setting up an ecommerce business in a free zone in the UAE can provide several benefits, such as:

  1. 100% foreign ownership: In free zones, foreigners can own 100% of the business, unlike mainland companies in the UAE where a local sponsor is required.
  2. Tax exemption: Free zones offer financial incentives such as no customs duty.
  3. Easy company setup: Setting up a business in a free zone is relatively quick and easy, with streamlined procedures for licensing, registration, and visa processing.
  4. Access to a large market: The UAE is a hub for international trade, making it an ideal location to access markets in the Middle East, Africa, and Asia.
  5. Infrastructure: Free zones offer state-of-the-art infrastructure and facilities, such as high-speed internet, modern offices, and warehouses, which are essential for running an ecommerce business.
  6. Regulatory framework: Free zones have their own regulatory framework, which is designed to facilitate business operations and provide a favorable business environment.
  7. Security and stability: The UAE is known for its stable political and economic environment, making it a secure location to do business.

Overall, setting up an ecommerce business in a free zone in the UAE can provide numerous advantages, making it an attractive option for entrepreneurs and investors looking to establish a business in the region.

Why choose SPCFZ?

Setting up a business is exhilarating and it’s getting quicker, easier and cheaper all the time, which is great for YOU, the entrepreneur. At SPC Free Zone, we will support you to understand your circumstances relating to your UAE residency situation and requirements (which can affect how you set up your business); what you are wanting to sell online, and whether those products are apt for the UAE, and understand who your target markets are, e.g., individuals, government or private sector businesses. All of these pieces of information can and will affect the type of e-commerce license that you will need.

To get started with setting up your own e-commerce business contact us now at 800 SPCFZ (77239)

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15 Replies to “How to Start an E-commerce Business in Dubai, UAE”

  1. Considering e-commerce in Dubai? Ayushi’s article is a valuable guide. The insights about the UAE’s market and the debunking of myths are commendable.

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