Good reasons to Start a Fashion eCommerce Business in Dubai

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Fashion, eCommerce and Dubai - mix them and something already begins to foretell that it is going to work. Of course, gut predicting is not how business is done. So, we will have to delve a bit deeper.

Nature of Demand in Fashion

Fashion is something that is subject to frequent change for many reasons. People, especially the younger generation or the younger working-class, get bored with their old clothes, old shoes, or old watches and they begin to seek newer products, embrace what is trending, or simply seek replacement due to the wear and tear of the old products. With every passing year, more and more people enter the working age group giving them greater financial independence to choose their fashion. The supply side can quickly and easily adapt and fine tune based on demand. Fashion designers or fashion brands can afford to experiment with product designs. All of these keeps a fashion market active and on its toes all the time just by the nature of its demand alone.

The win-win edge with online Fashion Shopping

Online fashion shopping proves to be advantageous over traditional fashion stores on many grounds. Firstly, customers get access to a wider number of brands and their offerings. For retailers, there is no necessity for them to manage a storefront with limited space for a limited set of offerings at one time. Secondly, even a handkerchief could get home-delivered to customers at a little or no charge. It becomes feasible for online retailers when they have volume sales to such locations or going through online marketplace services. Thirdly, customers could place orders from the comfort of their homes. Retailers simply need to maintain a good IT platform.

The ‘Dubai’ Factor

With a population of 10 million and GDP per capita of over USD 40,000, the UAE is the second-largest economy in the Arab world. With high scores on internet penetration, smartphone usage, and online shopping, the UAE is leading the eCommerce race in the MENA region. And Dubai is the epicentre from where most of the developments in the field of retail and eCommerce initiate in the region.

And now when we consider fashion, eCommerce, and Dubai in one platter, we begin to see the immense potential for fashion eCommerce business in Dubai. But let us also get there with specific reasons.

Why start a Fashion eCommerce Business in Dubai

A unique aspect of Dubai’s fashion market is its ability to embrace fashion with grace and elegance. Fashion enthusiasts get to see here the co-existence of the fashion aesthetics of both the Arab world and the West. The cosmopolitan fabric of the city opens up multiple market segments and space for creative fashion.

Fashion sales volume in Dubai goes up to as much as three-fold times during ‘End of Season’ sales. This is partly driven by demand from domestic customers and partly because of shopping tourism. Dubai Shopping Festival is a prime example here. Revenue in the fashion segment is anticipated to grow at a CAGR of close to 12% per annum.

Dubai’s unique geographic location also puts it in a favourable spot between the East and the West. Renowned, international fashion brands see Dubai as a market entry point for the MENA region.

Documentation and paperwork often slow down the order fulfilment process. But in Dubai, the documentation time involved in the process of goods transfer from freezones to the mainland is very less. Within a span of two or three days, the orders can be delivered to the customers.

DAFZA, JAFZA and DWC are considered the three best freezones in Dubai. And for eCommerce, DWC remains the favourite among eCommerce retailers where brands like IKEA/LANDMARK have distribution centres. In DWC, the customs duty and Bill of Entry (BoE) are exempted if the order value is below AED 1,000. For order value above AED 1,000, the applicable customs duty is AED 270. And there is no Bill of Entry and only customs duty is applicable for order value ranging between AED 1000 and AED 3000. The proximity to the Jebel Ali Port and JAFZA Freezone also adds a feather of advantage to the DWC Freezone.

With rising educational and training facilities in the field of fashion designing, it will become increasingly easier for domestic and foreign companies to build a strong local team to handle local business operations in Dubai.

The high smartphone usage and internet penetration rate in Dubai is a big plus point for fashion retailers interested in cross border eCommerce. A good market analysis, insightful understanding of consumer behaviour and customer experience journey, and identifying the right UVP and brand positioning strategy immediately puts a fashion retailer on the forefront to develop a great eCommerce website/app, carve an effective digital marketing strategy, and use analytics to further improve acquisition and conversion.

Dubai is the land of big fashion brands. As fashion eCommerce business consultants for Dubai, we have observed that eCommerce is a great medium to compete effectively against the big boys of the industry. In brick and mortar shopping, when we pay premium prices for branded fashion apparels and accessories, we are also paying for the brand’s advertising costs, rentals for presence in the big malls, etc. Fashion eCommerce retailers can save on these costs and pass on the benefits to their customers in the form of better products and services.

Dubai offers a promising fashion market for promising entrepreneurs and businessmen. There are plenty of good reasons to start an online fashion business in Dubai. But that is also the reason why Dubai is a fiercely competitive market. For startup MSMEs, who are not convergent with Dubai’s fashion retail market, some lead assistance from fashion business consultants for Dubai should give them a decent head-start because there is no easy answer to how to start an online fashion business in Dubai.