Quality & safety are crucial as UAE e-comm market is set to touch $9.2-bn by 2026

The UAE e-commerce market is expected to touch $9.2 billion in 2026, estimated the Dubai Chamber of Commerce based on data from Euromonitor International. As several factors are boosting online sales in the UAE, there is need for quality assurance and safety to sustain this robust growth path.

Coming as a significant step aimed to elevate the quality and safety of products sold online, 11 of the UAE’s leading e-commerce retailers and platforms have joined forces with the Ministry of Industry and Advanced Technology (MoIAT) by signing the first-ever Compliance Pledge. Names include Amazon, Al-Futtaim Group (IKEA, Ace Hardware, Watsons, Toys ‘R’ Us, Marks & Spencer), Al Ghandi Electronics, Al Yousuf Electronics, Eros Group, Jacky’s Retail, Lulu Group International, Nikai Group, noon, Sharaf DG and Samsung.

The Compliance Pledge will ensure that products available on these platforms adhere to the UAE’s stringent standards and technical regulations, thereby reinforcing consumer trust by ensuring a safer shopping experience.

Compliance Pledge to “level up the playing field”

In an exclusive interview with IMAGES RetailME, Ashish Panjabi, COO, Jacky’s Retail said, “The Pledge will help to level up the playing field for retail businesses like us, online players and marketplaces. Such initiatives are very encouraging as they elevate quality assurance within the retail ecosystem through continuous audits, scoring and benchmarking. The UAE, particularly Dubai, ranks high among the global shopping hubs and the Compliance Pledge will ensure that as a city we don’t fall behind.”

On the other hand, a Pledge of this nature will also help to ease the mind of consumers as they realise that reputed channels online are seriously working to ensure that products being sold by them are genuine, official and come with the right warranty. It, therefore, helps in alleviating any kind of anxiety that a consumer may have while making online purchases, Panjab added.

Amazon is also a founding signatory of the UAE Compliance Pledge and sharing his thoughts Stefano Martinelli, VP, Amazon Retail GCC said, “We strive to be the earth’s most customer-centric company, where every product available for sale is safe. This is both the right thing to do for customers, and it is critical to ensuring the trustworthiness of our store. We are continuously innovating new ways to keep customers safe, and engaging with various industry and government stakeholders who share our desire to work collaboratively to protect consumers. Working closely with MoIAT to launch this pledge, we are demonstrating our commitment to close cooperation with policymakers so that together we can continue our efforts to protect customers.”

Is returns a growing concern?

While every retailer aims to be customer-centric they are faced with the growing concerns of returns. For perspective, according to Shopify, the average return rate for e-commerce purchases globally ranges between 20% and 30%. In fact, the National Retail Federation (NRF) estimated that in the US alone, the cost of returns could amount to $101 billion​.

Is returns a growing concern for the UAE retail industry too? Is it prompting businesses to invest in technologies and processes that aim to minimise returns and improve efficiency?

Commenting on the perils of returns, Panjabi shared, “Returns are a part of life. It happens for a few reasons – if the consumer isn’t fully aware or aren’t sure about what they are buying online. So, the better we can demonstrate what we’re selling online through cataloguing it will ease things out.”

Then there are people who want to buy and try, in which case offering a solution is tricky, he pointed out. “Overall, by offering a return policy we are giving consumers the confidence to buy from us.”

As per some industry estimates, retailers in the UAE spend 5-10% of their revenue on an average to process returns. Asked if this estimate holds true for Jacky’s Retail, Panjabi said, “Its far less in our case. Having that said, from our own online channels, returns are lower as compared to sales via marketplaces.”

While consumer protection is crucial, what can retailers do to protect against scams?

Understanding the importance of consumer protection, MoIAT encourages not just e-commerce players but also traditional retailers to comply with all laws, specifications and technical regulations. From time-to-time, the Ministry also organises monitoring and awareness campaigns in cooperation with regulatory authorities at both federal and local levels.

Commenting on this, Nilesh Khalkho, CEO of Sharaf DG said, “Sharaf DG is committed to complying with the UAE’s Safety Compliance regulations. We are fully equipped to take specific actions to further the consumer protection initiatives in the country and ensure sale of efficient products, both online and in-stores. We are dedicated to mitigating the effects of non-compliant products by taking all necessary steps and cooperating closely with MoIAT.”

While retailers are committed to elevating the landscape, sometimes they become victims of scams and fraudulent activities. A quick look at data from NRF indicates that in the US, retailers expected $24.5 billion worth of holiday returns (in the beginning of 2024) to be fraudulent.

Albeit much less, such scams happen in the region too. Panjabi shared an example, “A consumer raises a request to return a mobile phone, mostly bought via online marketplaces. When we receive the perfectly sealed box there is a power bank in it instead of a mobile phone. We’ve put in place measures to deal with such cases along with the online marketplaces and individually. In some cases, we also turn to government agencies for help and guidance.”

“This isn’t just a UAE problem; it’s happening globally. Hopefully, in the future the algorithms will learn to filter out information correctly to prevent such scams,” he concluded.