December 1, 2010, 12:00 AM

A Wider World

(Page 2 of 2)

United Arab Emirates: Big spenders, few online retailers. Many retailers’ forays into the Middle East start with the United Arab Emirate—and with good reason. The World Bank rates the UAE as the third wealthiest country in the world in terms of gross domestic product per capita; the overwhelming majority of Emiratis speak English.

Online penetration is close to 60% and is topped in the region only by Israel. A 2007 MasterCard report put credit card penetration in the country at almost 60%. Yet e-commerce is still at the early stages in the UAE, largely because the traditional retail infrastructure is highly developed and shopping remains a popular leisure activity among locals and tourists alike, a phenomenon seen in other markets in the Gulf like Qatar as well as in Hong Kong. Those consumers who do shop online tend to shop cross-border given the dearth of local players in the market. Even online giants like Apple and Dell do not operate e-commerce sites for the UAE, instead directing users to resellers.

Today’s online retailer is looking increasingly to international markets for growth, with countries beyond those in North America and Europe becoming more popular target markets. Indeed, the less developed supply side and rapid online growth rates in some of these areas can make them more attractive to online retailers than countries on the more traditional global expansion path.

For those retailers that are willing to put in the time and effort to tailor their offerings to different audiences and market to online users around the globe, the opportunity can be substantial.

Zia Daniell Wigder is a senior analyst at Forrester Research Inc., serving e-business and channel strategy professionals. She specializes in web globalization with a focus on both B2C and B2B e-business. Her blog is at blogs.forrester.com/zia_daniell_wigder.

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