How niche e-commerce site HobbyGulf doubled its orders in four months

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The Gulf aviation industry has been the envy of the world over the last decade with lower costs and an ideal, centralized location that have propelled it above the global competition.

But for enthusiasts of its scaled-down counterpart – radio-controlled (RC) airplanes – it has been a different story, with sky-high shipping costs and slow delivery times making it a pain for flyers in the region to get the right aircrafts and parts.

This was a problem shared by RC hobbyist Ronald Sayegh, but for him it was also an opportunity. Sayegh, CEO and co-founder of HobbyGulf.com, saw a gap in the market to improve the supply of these niche products to flyers in the Gulf and the wider Arab region.

Beirut-based Sayegh and his co-founders Elias Kai and Walid Khaled started work on the e-commerce site in October 2013 and launched the business on 7 February 2014.

“The whole idea came from our own experience,” says Sayegh, who flew his first RC plane (a Twinny balsa biplane) at the age of 16. “When we ordered it took a lot of time and sometimes we needed to send things back, which makes it a long process,” given the region’s notoriously slow shipping times.

“We identified this need for faster shipping in the region and I did some research, talked to some clubs about what they wanted and we felt like it was a good opportunity to start something,” the founder says.

HobbyGulf is not Sayegh’s first e-commerce business – he started with Lebanon ski holiday booking site SkiLeb.com in 1997 – but this is his first time stocking and distributing physical products.

The RC plane market has been rapidly developing since the middle of the last decade, when new products using lithium-polymer batteries started to replace planes with engines requiring fuel. Multi-copters – self-stabilizing helicopters with mountable cameras – are likely to see a surge in popularity in the Gulf over the coming years, the founder predicts.

The partners set up a warehouse in the Al-Quoz industrial area of Dubai to handle the storage and shipping of planes and parts ordered on the website. Shipping out of the region’s main logistics hub has cut the delivery time for RC products to Gulf customers from an average of about 20 days to a timeframe of 24-72 hours, using Jordan-headquartered logistics company Aramex.

“It used to take more time since alternative online shops were all located in the U.S. or Far East,” he added.

HobbyGulf also claims to have the lowest shipping fees for RC products to any country in the Gulf region and Middle East. The site ships to a total of 38 countries, going as far afield as Singapore, Tanzania, and the Czech Republic.

“The major challenge when you come to work with tangible goods is the expansion… [the period] when you start stocking and re-stocking,” says Sayegh. “We started with 2-3 orders a day and it’s been growing since then. We have already gone out of stock with some items… so we have already replenished once and now there is a second shipment on the way.”

Sayegh said that the site is now receiving 6-10 orders a day, exceeding the founders’ expectations, but that it was too early to reveal any sales figures while the businesses is still expanding to its full range of RC products. Sayegh attributes the increase in orders to heightened awareness of the website as it establishes itself in the hobbyist community.

“In addition to cheaper shipping costs, the prices are also very competitive,” adds the CEO. “If you compare it to a [brick and mortar] RC shop, with its employees and its rent, [the distributor saves money working online and with a warehouse, and] these savings provide very attractive rates for customers. These flyers are very savvy… they spend hours and hours looking at options on the internet before making a purchase,” Sayegh says.

The popularity of RC vehicles increases in the Gulf along with the region’s insatiable appetite for new technology, but it is always likely to remain a niche, relatively expensive hobby.

However, unlike buying a holiday or a car, those who get into RC tend to buy products throughout the year, which means satisfied HobbyGulf customers return, sometimes within weeks, to purchase more parts and more advanced planes.

“We see a lot of repeat customers… it is an addictive hobby… it is like a drug. You cannot buy one and stop. You are either hooked or you’re not,” says Sayegh.

To take advantage of this trend, the co-founders have introduced a loyalty program. For every dollar spent, a customer receives a loyalty point worth five cents to contribute to the next purchase, which expires after 15 days.

The HobbyGulf founders have used several avenues to increase the presence of their website including promotion through social networking and communicating with hobby groups in the region.

“Surprisingly, Instagram has huge amounts of enthusiasts. I don’t know why but they are much more active there than on Facebook and other networks,” says Sayegh. “We are using all of [the social networks] to optimize the position of the website for search engine optimization and we have taken some Google AdWords.”

“One of my partners is specialized in SEO so we are using all of his expertise. It is well optimized in English and Arabic and we are soon going into five additional languages,” the CEO added.

HobbyGulf has almost 3,000 followers on Instagram, where it regularly posts photos and videos of planes in action. The founders also appear to have heavily promoted the site on RC message boards and forums in different countries and on video sites such as YouTube and Vimeo, generating some discussion from enthusiasts.

It has always been the HobbyGulf’s plan to cover all RC lines of products but Sayegh decided to start with the core market of planes to get the business off the ground.

Next, HobbyGulf is planning to expand the warehouse space by five times as it increases the range of products available on the site, adding new planes along with cars, boats, and multi-copters along with all their associated parts.

Before long, the sight of these futuristic helicopters whirring about the Gulf skies could become as common as an Emirates jet flying overhead.

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