97% of Trade Experts Believe That Dubai's Logistics is Capable of Making It a Market Leader in e-Commerce

If logistics companies in Dubai were able to fully utilize the logistics capabilities and infrastructure available in the region, then nothing would stop Dubai from becoming a market leader in e-Commerce. This is not the result of a speculation or intent driven estimation. The claim is being made by over 97% of attendees Jafza Associates Forum 2013, where they affirmed that Dubai is already equipped with such infrastructure that can make the city an e-commerce hub of the Middle east

Key Challenges

You must be wondering that if Dubai is so capable of becoming an e-commerce hub, then why it hasn't already achieved this status. The problem lies in regulations, standards and Internet penetration. All of this needs to be improved from their current levels for making an impact. Now, the improvements not only need to be reflected in Dubai itself, but across the GCC. Without a widespread improvement and strategic implementation, there is limited scope of the city becoming a leader in e-commerce logistics services.
Banks and other financial institutions are also important components of the entire framework where they need to improve upon turnaround times, process quality, and cost effective solutions. These factors are crucial for attracting businesses to set up merchant accounts that are required for maintaining an e-commerce network. Without a merchant account, a retail business does not qualify for selling its wares online. In order to enhance the e-commerce capabilities, it is important for banks to improve the quality of their services for increasing the number of businesses opening merchant accounts in their facility.

Current Modes of Payment

Cash and cheque are the most commonly used modes of payment in Dubai, even though more than 47% of the population is in possession of payment cards. Of all the consumers who use online shopping services, around 80% of them prefer cash on delivery. The reason behind using cash on delivery is the lack of faith in online payment options. People are not convinced about the security of the transactions conducted using online payment gateways. This is also the reason behind businesses not opting for merchant accounts as the majority of their sales revenue comes from cash on delivery payment mode.

The Road to Success

Success can only truly be achieved if the appropriate corrective measures were applied in time and in the right manner. For example, if banks improved their service quality and encouraged businesses to create merchant accounts, then they also need to communicate the safety of the transactions in order to make customers use online payment services along with cash on delivery mode. Dubai already has the infrastructure and the internet framework to allow the establishment of a highly effective e-commerce network. Minor improvements to the regulations, standards and financial institutions would bring about a lot of difference in the potential of Dubai's ecommerce logistics capabilities.