Overview

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Overview:

The United Arab Emirates is paving the way for other nations in the Middle East to undertake electronic commerce initiatives. Since the early 1990s, the UAE has been pushing to diversify into non-oil business sectors. The fruition of its goals will best be seen with the role that e-commerce is playing, and will play, in its society. Currently, there are no regulatory hindrances to the growth of e-commerce.

Dubai's third free zone was created to encourage the growth of the e-commerce. As far as the UAE is concerned, it is not a sub-sector of the information technology revolution sweeping the nation, rather it is the standard to which the country must adhere. Without question, the nation is fully undertaking every opportunity available to market itself as the ideal location for foreign and domestic companies to undertake e-commerce ventures to include business-to-business, business-to-consumer, government-to-business, and government-to-consumer. However, in order for it to be as successful and mainstream as intended the UAE must privatize the state-owned telecommunications company ETISALAT and allow additional Internet Service Providers to enter the market.

General:

E-commerce in the UAE refers to transactions between different businesses, business-to-consumer, business-to-government, government-to-government, and government-to-consumer. Each of the actors is being targeted as potential beneficiaries and users of e-commerce. A study performed by the Emirates Bank Group in late 2000 revealed that almost 14 percent of firms in the UAE have e-commerce operations and another 42 percent revealed they conduct business over the Internet. (Author's note: This study only included 100 firms in the UAE so the statistics compiled most likely have a large margin of error. Furthermore, it is unknown whether the study included an adequate cross-section of industries). Considering the high number of users of the Internet in the UAE this presents a prime opportunity for business development for local companies. For a company in the UAE to not consider e-commerce as a possible means of doing business it could be financial suicide

A survey by the DIT Group estimated the total value of electronic commerce in the Middle East at between $9 million and $11.5 million in 1997. A more recent statistic is not available. However, there is no doubt that e-commerce revenues in the UAE have grown significantly. This same survey revealed that Arab software companies expected that up to a third of their transactions would take place through the Internet in the next two to three years. Although the UAE is leading the Gulf nations in pursuit of e-commerce objectives, other nations in the region have undertaken similar initiatives. For example, in Egypt, a number of commercial firms are already offering services through the Internet. In fact, the Cairo supermarket has established a World Wide Web site where consumers can order their groceries on-line for home delivery.

The UAE has been host to many international conferences on the future of e-commerce. The nation is trying to be a major player in the international market and henceforth established numerous mechanisms to attract e-commerce to the country. For example, the UAE hosted the DATAMATIX Conference on E-Government and E-Customers in the fall of 2000. An additional conference and exhibition was also held in early 2000. The participants in such seminars have typically included businesses and organizations, both domestic and foreign. The following companies have had a regular presence in fora regarding e-commerce in the UAE: Al Yousuf Universal, ETISALAT, Aramex, Federal Express, Compaq, Microsoft, Oracle, Visa International, and Citibank