In my very first post for Wamda one year ago, I spoke about shipping concerns as one of the five major infrastructure needs for regional e-commerce businesses. Since then, innovations in international shipping solutions from companies like Aramex and SwipeZoom have filled gaps. However, seamless end-to-end home delivery remained an issue – until now.
A few weeks earlier, the UAE’s Emirates Post quietly announced a door-to-door home delivery service. With the launch of a new system that may integrate with GPS and GIS technology, this exciting revelation could have a significant impact on e-commerce in the UAE. As we all know, e-commerce has three primary advantages over traditional retail: lower costs, more choice, and convenience. Yet until now, convenience was still sometimes a stumbling block, due to a variety of factors, making the online-to-offline model a very appealing (and successful) alternative to delivery.
Broader support for home delivery may help existing solutions improve, but skeptics may argue that home delivery is actually counterproductive for regional e-commerce for two reasons. Firstly, courier delivery enables the popular cash-on-delivery payment method, which causes retailers to pay shipment costs upfront. Second, delivery to P.O. boxes complies with cultural barriers that exist in certain countries (e.g., home delivery to a woman in KSA can be tricky if she is the only one at home).
In more developed e-commerce regions, shipping is used as a
competitive advantage for online sites. For instance, in the
U.S., same-day shipping became a hot trend this holiday season,
appealing to last-minute shoppers. In addition, many international
websites offer free shipping with a minimum purchase order. Not
only does this drive sales for the merchant, it forces shipping
companies to provide innovative, cost-effective solutions.
This trend is spreading in the UAE; one example is electronics retailer JadoPado, which has built a name a name for itself by offering same-day delivery with its own fleet of trucks. And retailers’ ability to guarantee fast delivery times may still demand an in-house solution, depending how reliable Emirates Post ends up being.
I still remain a huge fan of the online-to-offline model for the region, including newer model driving digital traffic into retail stores, and continue to check emails for daily deal treasures. Moreover, newer models driving digital traffic into retail stores are fascinating as well. For example, social gifting is a new global trend that has seen early provides appear in the region. Admittedly, I am a little excited to receive my first purchase in this little mailbox seen late last year in my building’s garage. It will be interesting to see how much this e-commerce infrastructure enhancement grows the sector in the UAE; now the question is whether other countries will follow suit.