Guide to E-commerce Expansion in the UAE with Speedcommerce
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Expanding your eCommerce business to the United Arab Emirates (UAE) is easy with Speed Commerce. Today’s eCommerce company has the opportunity to penetrate many markets and the eCommerce market has been steadily expanding in the UAE.
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There are basically two ways to approach addressing eCommerce order fulfillment for your UAE customer. If your business is significant enough to handle a presence in UAE, then partnering with a local 3PL is the best course of action. Your biggest obstacle is capital resources as carrying the additional inventory in another country will require additional capital.
The second and most common way, especially for most eCommerce companies is to partner with a U.S. based 3PL provider that can support both your U.S. and UAE based customers. Shipping items from the United States to UAE involves several steps and considerations, including choosing the right shipping method, handling customs requirements, and ensuring your items arrive safely.
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Introduction to the E-commerce Landscape in the UAE
The e-commerce market in the United Arab Emirates (UAE) has seen significant growth in recent years. The UAE is the leader in e-commerce among Gulf Cooperation Council (GCC) states. Largely due to the pandemic in 2020, the market jumped by 53% with a record of $3.9 billion in e-commerce sales, which constituted 10% of total retail sales.
The UAE is the 27th largest market for e-commerce with a predicted revenue of US$10,205.5 million in 2023. The revenue is expected to show a compound annual growth rate (CAGR) of 7.7%, resulting in a projected market volume of US$13,708.9 million by 2027. The value of the UAE e-commerce market is expected to reach $9.2 billion in 2026, and the sector’s share of total retail sales in the UAE is projected to reach 12.6 percent by the same year.
The online share refers to the proportion of the retail volume that is transacted via the Internet. It includes purchases via desktop PC, tablet or smartphone, both via website or app. In the UAE retail market, the online share is 13.8% and will increase by an average of 3.9% to 16.1% by 2027.
The Imperative of International Shipping Solutions
International shipping solutions are critical for the UAE due to several reasons:
1. The UAE is one of the key maritime countries regionally and globally. It has played an active role in developing the maritime industry by formulating strategies and policies, setting standards regulating the work of the maritime sector, and strengthening maritime legislation and regulations to serve the shipping sector and international trade.
2. The UAE has been commended for its role in facilitating maritime trade worldwide, especially during the Covid-19 pandemic. It has introduced fundamental amendments to many decisions that have developed and improved the work system to keep pace with global developments.
3. International shipping plays a significant role in supporting global trade. Around 80% of international trade is carried out by the international shipping industry, which is crucial for a trading hub like the UAE.
4. The outbreak has demonstrated the importance eCommerce and digitalization and reducing papers in the shipping industry, as well as in ports, perpetuating the need for electronic documentation standards and synchronization.
5. When it comes to international shipping, working with reliable companies is very important. This ensures that goods are delivered on time and in good condition, which is crucial for businesses.
6. One of the most important people you will work with in the export process is your freight forwarder, who usually arranges the transport of your goods with a carrier and helps ensure you’ve taken care of all the details.
Overview of Shipping Options with Speedcommerce
Generally shipping from the U.S. to the UAE should be handled by either USPS, UPS, DHL, or FedEx. These are all major international carriers that ship from the US to Dubai and are trustworthy. Shipping from the U.S. to the UAE is expensive and typically cost prohibitive for most eCommerce models. As example, here is a list of shipping options from these carriers for a 2 lbs. package as of March 2022:
USPS GXG Envelopes: $123.85, 1-3 business days
USPS Priority Mail International: $61.50, 6-10 business days
USPS Priority Mail Express International: $77.30, 3-5 business days
UPS Worldwide Expedited: $157.34, 5 business days
UPS Worldwide Saver: $133.57, 3-4 business days
FedEx International Economy: $161.01, 5 business days
FedEx International Priority: $175.69, 3 business days
DHL Express Worldwide: $122.15, 5 business days
These are samples of general pricing and options for consumers’ shipping orders and the actual costs may differ and would be lower working with a 3PL. However, the examples provide guidance to the higher cost and longer transit times involved that would need to be considered when doing business from the U.S. to the UAE.
What We Do
Receiving
The inbound shipping team with Speed Commerce is ready to receive, inspect, enter into inventory, and place your products on the shelves, ready for the warehouse team to pick products for your orders.
Picking & Packing
Accurate assembly of ecommerce orders can make or break your business. Our team goes the extra mile to ensure orders are assembled correctly, packed with care, accurately labeled, and sent to shipping on time.
Shipping
Because of our shipping volume to and from our facilities, we have established relationships with major carriers and negotiated favorable rates. Ensuring your orders are received by the carrier as expected is our top priority.
Inventory Management
Making sure you have enough stock on hand (but not too much) takes expertise in ecommerce retail trends. We work closely with our clients and their Speed Commerce client success manager to anticipate spikes or dips in demand. Our team also manages monthly inventory reporting and takes measures to avoid shrinkage.
Cross-Docking
Need to expedite order fulfillment to meet unexpected high-demand? We’re experts in cross-docking. Our team is agile and can quickly receive (and complete their inbound checklist) on the dock, then our pick-pack team will quickly assemble orders and prepare for shipment. We don’t waste time putting items on the shelves; instead we get them out the door!
Returns Management
Get your reverse logistics under control. We manage the full end-to-end process of returned product, including refreshing and reviving! Reducing shrinkage and get your product back out the door generating profit with our returns management service.
Long-Term Storage
Store your inventory in our safe and secure warehouse and gain flexibility you need in your operations. We have space for your long-term storage needs. Centrally located, our warehouses are ideally situated to give you access to your inventory in a secured location. We offer transparent pricing, quick start, and flexible terms.
Managed Services
We remove the headaches in managing your ecommerce fulfillment and warehousing operation. We work with you to learn what’s important to you and craft our agreements to match your expectations. You’ll meet with your client account manager regularly to review our performance and make adjustments.
Speed
Your customers want their orders delivered quickly. In ecommerce, fast order fulfillment is a must! We live up to our name and ensure speed in everything we do. Same-day fulfillment gets your orders packed and shipped shortly after your customer makes their purchase.
Assessing International Shipping Carriers: A Quick Look
USPS (United States Postal Service) is often the most cost-effective choice for shipping smaller packages to the UAE, Options like USPS Priority Mail International and USPS Priority Mail Express International offer reasonable transit times. While USPS may have competitive rates, it may not provide the same level of tracking and insurance options as private carriers.
United Parcel Service (UPS) offers international shipping services to the UAE, including UPS Worldwide Express and UPS Worldwide Expedited. They provide reliable tracking and insurance options. FedEx offers a range of international shipping services, including FedEx International Economy and FedEx International Priority, which provide reliable options for shipping to the UAE. They offer tracking and insurance options for added security. Both UPS and FedEx have an extensive network, providing good coverage across the UAE.
DHL is known for its fast and efficient international shipping services. DHL Express offers express delivery options to the UAE, including DHL Express Worldwide, which provides fast transit times. DHL has a strong presence in the UAE, making it a reliable choice for shipping to various destinations within the country.
Getting Acquainted with Duties and Taxes for Dubai Shipments
When shipping a package internationally from the United States to the United Arab Emirates (UAE), your shipment may be subject to a custom duty and import tax. The import tax charged on a shipment will be 5% on the full value of your items. For example, if the declared value of your items is 100 AED, an additional amount of 5.00 AED in taxes will be required to be paid to the UAE government.
Customs duties are another charge which will be required to be paid. These vary by the category of products. When it comes to importing goods, some documentation containing details of the shipment is required, and it varies by courier and destination country. The Gulf Cooperation Council (GCC) Customs Union equalizes duties paid upon the entry of an import to any member state of the GCC — UAE, Saudi Arabia, Kuwait, Bahrain, Qatar and Oman — no matter the destination country within the GCC. Duties for most items are based on the Cost, Insurance and Freight (CIF) value at the rate of 5 percent.
Please note that tariffs and duties are revised frequently, so it’s recommended to confirm these before exporting.
Navigating Customs Formalities in Dubai
When navigating customs formalities in the United Arab Emirates (UAE) consider several steps:
Import-Export Code (IEC): This is a unique code that is required for importing or exporting goods.
ATA Carnet: This is an international customs document that allows duty-free and tax-free temporary import of goods for up to one year.
FTA-TRN Linking: This involves linking the Federal Tax Authority (FTA) Tax Registration Number (TRN) with the customs code.
Import-Export Procedures: These are the procedures that need to be followed when importing or exporting goods.
Clearance Documentation Pre-Requisites: These are the documents that need to be prepared and submitted for customs clearance. To import goods into the UAE, companies must have the correct trade license from the
Department of Economic Development (DED) from the emirate: The UAE-based company (consignee/agent) should get a delivery order from the shipping agent and submit the following original standard trade documentation: Commercial invoice from the exporting company addressed to the importer with details about quantity, goods description, and total value of each imported item. Certificate of origin, stating the country of origin and approved by the Chamber of Commerce in the country of origin. Detailed packing list including weight, method of packing, and HS code for each item. Import permit from the competent agencies in case of importing restricted goods or duty-exempted goods. Bill of entry or airway bill.
Customs Laws: It’s important to be aware of and comply with all relevant customs laws in Dubai & Rest of UAE.
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The Advantage of Partnering with Speedcommerce for International Logistics
Leveraging Speed Commerce as your eCommerce 3PL (Third-Party Logistics) provider can be a strategic move to streamline your supply chain, fulfillment operations, and expand your eCommerce business. Here’s how you can effectively use Speed Commerce as your 3PL provider:
1. Understand your business’s specific needs and requirements. Consider factors like the volume of orders, types of products, target markets, and desired service level.
2. Initiate the onboarding process with Speed Commerce. This typically involves integrating your eCommerce platform with their system to facilitate order processing and inventory management.
3. Upload your product inventory to Speed Commerce’s system, ensuring accurate product listings, stock levels, and SKU management. Utilize their inventory management tools to monitor stock levels and receive alerts for reordering.
4. Integrate your eCommerce store with Speed Commerce’s order processing system to automate the flow of orders. Ensure that order information is transferred accurately and in real-time to facilitate quick order fulfillment.
5. Define your shipping requirements, including shipping methods, packaging preferences, and shipping cost calculations. Speed Commerce will pick, pack, and ship orders on your behalf, ensuring timely and accurate deliveries to your customers.
6. If you plan to expand internationally, work with Speed Commerce to ensure they have the capabilities to handle international shipping, customs compliance, and multi-currency transactions.
7. Establish a clear and efficient returns management process with Speed Commerce to handle customer returns, refunds, and exchanges.
8. Collaborate with Speed Commerce to provide customer support, including order inquiries, tracking updates, and issue resolution. Speed Commerce has both a U.S. based and International Contact Center that can support all of your customer’s questions, improve sales, reduce returns, and improve your customer satisfaction ratings.
9. Leverage Speed Commerce’s analytics and reporting tools to gain insights into your eCommerce operations. Monitor key performance metrics like order fulfillment times, shipping costs, and customer satisfaction.
10. As your eCommerce business grows, work with Speed Commerce to scale your operations seamlessly. Ensure they have the capacity to handle increased order volumes during peak seasons.
11. It’s important to understand the cost structure of using Speed Commerce as your 3PL provider and to ensure that the partnership is working for all concerned parties.
By effectively leveraging Speed Commerce as your eCommerce 3PL provider and maintaining a strong partnership with them, you can enhance the efficiency of your supply chain, reduce operational complexities, and focus on growing your eCommerce business. Regular communication and collaboration with Speed Commerce is essential to ensure a seamless and successful fulfillment process.
