Discusses the state of direct marketing and what channels are available for companies to use direct marketing.
Although the UAE is known for offering a variety of luxury stores and big malls, e-commerce practices have seen rapid growth in the last five years. Traditionally, direct selling in the UAE has existed for many years, primarily catering to the remote and desert areas, where water and other necessary items were directly supplied to consumers. In recent years, however, the financial sector and insurance companies have seen a boom in direct marketing for their services. Moreover, the one-on-one contact selling sector has grown exponentially since the 2008-9 financial crisis, especially with stay-at-home mothers joining the direct selling team.
In prior years, direct marketing in the UAE largely occurred through one-on-one engagements and other personal contact arrangements. However, with the rapid adoption of internet and mobile technologies in the UAE, computer-aided retailing and home-shopping have become increasingly popular. Also, with increased push for multimarket models, direct marketing companies are slowly seeing increased group engagements and/or a “peer/buddy support”.
In order to cater to the many shoppers who prefer online shopping, major UAE retail groups, such as, Carrefour, IKEA, Landmark, Lulu, and Sharaf DG have strengthened their connections with targeted consumers via direct marketing, using mobile messaging, promotional emails, interactive consumer websites, and online advertising for increased consumer awareness and retention.
The Department of Economic Development (DED) consented to the formation of the Direct Selling Association in UAE, an official member of the World Federation of Direct Selling Associations, in order to promote transparency and to regulate the sector. The Direct Selling Association represents 14 direct selling companies operating in the region and held the inaugural Middle East Direct Selling Forum in Dubai in 2017. To further improve accountability and intellectual property protection, the DED recently announced that to conduct business activities on social networking sites, local companies must be owned by Emirati or GCC citizens and must be at least 18 years old to receive an “e-Trader” license.
There are over 25 e-commerce sites, such as, https://ae.awok.com/, www.brandsbay.com, www.cobone.com, www.groupon.com, www.kingsouq.com, www.letstango.com, https://en-ae.namshi.com/, www.noon.com, www.ounass.ae, www.souq.com, www.thedubaibazaar.com, www.wojooh.com etc., in the UAE, that cater to busy shoppers who prefer online shopping. Amazon launched its services in the UAE in May of 2019 and launched its Amazon Prime services in June 2019. The UAE e-commerce sector grew by 50 percent in 2018 and is forecast to be worth $27.1 billion by 2022.
Moreover, online classifieds have seen rapid growth in the UAE, further enhancing customer-to-customer sales, with sites such as www.dubizzle.com, ae.fridaymarket.com, www.uaeclass.com, www.uaeclassifieds.com, ae.opensooq.com and many others drawing hundreds of thousands of buyers and sellers to their platforms. Dubizzle lists 97,409 announcements in the classifieds section of Dubai alone, for example, and the massive surge in internet user penetration (forecasted at 80.2 percent of the population in 2019) makes digital direct marketing a vital element of reaching consumers in the UAE.
Free zone companies in Dubai, such as, Citruss TV, market directly through online and media advertisements. Such companies, however, are governed by respective free zone regulations and must comply with local municipality requirements, including not selling any prohibited products.
Foreign companies are expected to conduct direct transactions only with importers and agents who are already established in the UAE market. Direct marketing by international companies is not encouraged by the UAE government even though many companies tend to lure UAE consumers through direct marketing from overseas. Such activities are not common and are mostly restricted to well reputed brands from verified sources. It is worth mentioning that such activities may be subject to UAE import levies and customs regulations. Also, in many cases, products imported from non-verified outside sources have resulted in unscrupulous suppliers with little or no control over product quality and uncertain service warranties.