Local businesses benefit as consumers shop online

Several local, home-grown businesses have clocked healthy growth, especially over the past four months, as an increased number of consumers shopped online. In the GCC, the UAE and Saudi Arabia have seen a significant spike in e-commerce transactions.

According to RedSeer Consulting, the online retail market in the UAE rose 55% since the onset of COVID-19, as the number of online orders per day increased by 37% since February 2020, touching nearly 200,000 orders per day during the lockdown period. While in the Kingdom of Saudi Arabia (KSA), online retail increased by over 33% since the onset of COVID-19, as the number of online orders per day increased by 14% since February 2020.

As such amidst the on-going pandemic, e-commerce has opened up massive opportunities for home-grown brands and entrepreneurs.

Pandemic accelerates Kibsons’ scalability

UAE-based online grocery platform, Kibsons is now planning to launch a wider and more comprehensive range of pantry, baby, home, personal, health & beauty items in addition to its main categories of fruits, vegetables and meat.

“Our goal is to be able to provide a full range of grocery essentials and become a one-stop-shop for all grocery needs. We always knew that e-commerce was the way forward. What this pandemic has done is accelerated the growth we were expecting by next year,” says Halima Jumani, co-founder and director of operations, Kibsons International.

Since the launch of its e-commerce site in 2017, Kibsons has recorded steady growth in sales and customer base, driven by high-quality products and the convenience of free same-day/next-day delivery. During the recent lockdown, more people were keen to try out Kibsons, even though the delivery timeline was longer at five-seven days.

“This willingness to try our platform led to an almost 35% increase in our customer base. The average basket has increased by almost AED100, mainly because customers were ordering in bulk and stocking up,” Jumani shares. “Even after the ease of restrictions, we have not really seen a decline in orders; rather our sales and orders have stabilised. Our customer retention stands at over 80%.”

Due to a significant increase in demand, Kibsons has created over 400 new jobs since March 2020 and are still adding more people, while increasing pay for its existing employees with a 40% bonus alongside benefits for overtime. What’s more, Kibsons is back to its same-day/next-day delivery commitment, making its last-mile more efficient to handle higher daily deliveries.

“At the outset of the pandemic, we made a proactive decision to invest in the required infrastructure. Temperature controlled vans with carefully selected and swiftly trained drivers, particularly for the busy routes, was definitely a key element in making our last-mile much more efficient. During the lockdown, our customers had to schedule their deliveries up to five-six days in advance. However, due to several on-going advancements in our operational capacity, we are now able to deliver orders on the same day with no extra delivery charges,” Jumani states.

The Saffron Souk records two-fold growth

Home-grown e-commerce marketplace with over 400 creative sellers, The Saffron Souk has seen two-fold growth in sales and daily deliveries over the past four months. “We have been growing very fast in any case since 2019, when we launched The Saffron Souk. But the past few months have been record-breaking; we have registered a significant increase in sales,” says founder, Shaan Qasim.

Face masks made of fabrics are selling very well on The Saffron Souk, since that’s the need of the hour. But the platform has also seen some pleasant surprises in several other product categories. “One of our sellers, Melanie Gissing Design, makes beautiful kimono-style abayas, which are selling very well,” Qasim shares. “Reports suggest and general perception would be that people aren’t spending on fashion and accessories, but we have been pleasantly surprised as we saw a significant uptick in these categories during Ramadan and Eid. Overall, for us, jewellery, clothing, children’s products are still the top categories, while face masks are new and growing.”

“Most sellers on The Saffron Souk are home-based artisans and we were determined to find a way to support them,” she continues. “To our surprise, most of our sellers have been incredibly savvy, in their ability to quickly pivot in order to stay relevant. For example, most of our sellers aren’t doing local pop-up markets anymore, with The Saffron Souk becoming their focus area. On our part, we have been even more proactive in supporting them with marketing initiatives to ensure exposure, such as participating in Instagram’s campaign to support small businesses. In addition, since our delivery partner is FedEx, we are able to support our sellers in their last-mile journey quite effectively.”

When asked if doorstep deliveries were disrupted during the crisis, Qasim says, “Not at all! That’s why, right from the beginning I wanted to partner with a world-class logistics provider. FedEx has been efficiently delivering even amidst the current movement restriction in Abu Dhabi.”

The Saffron Souk is also focused on expanding presence as a regional business, which only got accelerated during the pandemic. As such, The Saffron Souk is getting ready to launch a revamped site this week. “It should have launched earlier but got delayed owing to the current situation. We are a UAE-based business but we understand the kind of potential that a country like Saudi Arabia holds in terms of local businesses there that currently have limited or no digital presence. We are keen to bring such small businesses onboard The Saffron Souk. Our revamped, bilingual platform will facilitate this process,” Qasim states.

As opposed to impacting growth for The Saffron Souk, the pandemic has actually convinced the brand that it’s on the right track. “The COVID-19 pandemic has accelerated the acceptance of online shopping, albeit not under the ideal circumstances. But there is a real possibility of people sticking to their online buying behaviour,” she observes.

Holly Holistic leverages social media

UAE-born holistic brand specialising in eco-friendly therapeutic products, Holly Holistic began offering a more personalised and shopper assisted virtual shopping experience to customers using its WhatsApp platform. Part of the Dubai SME programme, Holly Holistic has gradually grown from an e-commerce store to a tiny showroom and then a full-fledged retail store. But, amidst temporary store closure, the brand had to react quickly.

“We are always trying to serve the needs of our customers. That’s why we aren’t only an e-commerce platform; we also created a showroom of our products. But due to the current situation, we have been working a lot with our customers directly on WhatsApp and Instagram to let them have a personalised virtual shopping experience,” explains founder, Holly Aldhebaiei. “This helped us to not only engage with our audience, but also clock sales.”

The brand – which has been able to clock 100% growth every year for the past three years – began allowing customers to purchase items online that were previously only available in its store, not on the e-commerce site. This probably helped Holly Holistic in preventing sales decline in the past three months, compared to the same period in 2019.

In this context, Aldhebaiei says, “Our store sales have obviously been impacted by COVID-19, amidst temporary closure, and most of our customers prefer to shop in the store. We had to find ways to step up our e-commerce sales by giving 100% attention to our customers and delivering a great shopping experience online by leveraging social media.” As businesses began reopening in the UAE, Holly Holistic has opened its store, but decided to follow an appointment-based customer visit for the time being.

In summation, when asked how she is managing cash flow and budgeting for sustained operations, Aldhebaiei says, “We monitor our cash flow monthly and budget for the restocking of items that are more frequently purchased. Thankfully, we haven’t faced any issue with cash flow during the past few months.”

 

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