How to start an e-commerce business in UAE

Starting an e-commerce business in the UAE is a great idea because the country is a growing centre for online shopping. 

Many people in the UAE are buying things online, and the market is getting bigger every year.

The UAE’s e-commerce sector is expected to skyrocket, with sales projected to increase from $2.6 billion in 2019 to $9.2 billion by 2026. 

According to the National  Globally, the e-commerce market is also growing rapidly. By 2027, it’s expected to be worth $55.6 trillion, up from $13 trillion in 2021. 

This means the global market is growing at an annual rate of about 27.4%, according to data from a US research firm called Imarc Group.

Why the UAE is Ideal for E-commerce

The UAE is a great place to start an e-commerce business for many reasons:

Low Taxes: In the UAE, there are no income taxes on personal wages or salaries. Businesses pay only 9% in corporate tax, and a small 5% VAT applies only if the business’s annual profit is more than AED 375,000 (about $100,000).

Full Business Ownership: Entrepreneurs can fully own their e-commerce businesses in the UAE without needing a local partner or sponsor. This makes it easier for foreign business owners to set up shop.

No Minimum Capital Needed: Unlike many other places, the UAE does not require a minimum amount of money to start an e-commerce business. This means you can start with a small investment.

Great Location: The UAE is centrally located, making it easy to connect to global markets. This is perfect for shipping and distributing products worldwide.

Top-Notch Infrastructure: The UAE has excellent infrastructure, including advanced logistics networks and high-quality technology, which are essential for running a successful e-commerce business.

Supportive Business Environment: The UAE government is continuously improving its regulations to support e-commerce growth. This makes the process of starting and running a business smoother.

A survey has shown that about 70% of people in the UAE shop online regularly, indicating a strong market for e-commerce businesses.

 

 

The Process of Starting an E-commerce Company

Starting an e-commerce company might seem complicated, but if you follow some simple steps, it becomes much easier. Here’s a breakdown that a class 10 student can easily understand.

1. Choosing the Right Place to Set Up Your Business

First, you need to decide where you want to set up your e-commerce business. There are two main options: a free zone or the mainland. Each has its own advantages:

• Visas: If you set up in a free zone, getting visas for employees is more expensive, and you can get only a few (like 1 to 4). If you don’t need many visas, a free zone is a good choice.
• Office Space: Free zones offer flexible office options, like shared desks. But if you want an office outside the free zone, you need special permission (called an NOC).
• Cost: Free zones are usually cheaper for setting up a business. You can start with an e-commerce license for as little as AED 5,555.
• Business Activities: Mainland companies have fewer restrictions. This means they can sell directly within the UAE, which is easier for reaching local customers.

2. Setting Up Your E-commerce Company

Next, you need to set up your online store. Here’s how you can do it:

• Choose a Platform: Decide which platform to use for your online store. Some popular options are Shopify, WooCommerce, Magento, and Bagisto. You can also have a custom-built solution if you want something specific.
• Design and Development: Make sure your website is easy to use and looks good on mobile devices. Important features include a product search, secure payment options, and simple navigation.
• Localization: Since you’re in the UAE, it’s a good idea to have your website in both Arabic and English language. This helps you reach more customers.

3. Setting Up Logistics for Your E-commerce Business

Logistics is about how you will deliver your products to customers. If you’re in a free zone, you cannot directly ship products to customers within the UAE. Here’s what you can do instead:

• Logistics Partner: Partner with a logistics company to handle your orders. This way, you can still manage your brand and customer experience.
• Existing Marketplaces: You can sell your products on popular platforms like Amazon and Noon. While these platforms might charge higher fees, they make shipping and logistics much easier.
• Warehousing Solutions: Consider storing your products in warehouses within free zones or through logistics partners. This helps you manage your inventory efficiently and ensures products are delivered on time.

By following these steps, you can start your e-commerce company smoothly and reach your customers effectively

 

Solution Provide by Bagsito for UAE Region– 

Bagisto is an open-source e-commerce platform, that offers a flexible foundation to build an e-commerce platform.

If you want to build the marketplace you can also use our Bagisto Multivendor Marketplace module.

We can also do integration and customisation services and make an ideal e-commerce platform for you. 

Anekke is a UAE-based handbag company that specializes in manufacturing and selling bags and purses which showcase vibrant patterns and designs which is using the Bagisto. 

 

Conclusion – 

Now you can start an eCommerce business in UAE with the help of Bagisto which will underline all the requirements of an eCommerce website of a Middle East region.