The Gulf’s e-commerce portals still have a fight on their hands — a significant share of the region’s online-driven sales continue to be sourced from the US. And by the look of it, this could well be the status quo for some time to come.
In categories such as apparel, cosmetics and even electronics, online shoppers here — or at least a good number of them — feel the need to have the latest fashion or gadget in their hands at the earliest rather than wait for them to arrive in local brick-and-mortar shops or their online counterparts here. If that means sourcing from the US or any other overseas territory, then so be it.
This is the demand gap that logistics service providers want to keep plugging into.
“The Gulf economies peg to the dollar ensures that there will be a certain high demand for online sourcing from the US,” said Ramesh Bulusu, CEO of MyUS.com, which has seen its shipments to the Gulf territory grow by 40 per cent in the last 24 months.
And of the $125 million (Dh458.8 million) in orders it clocked so far this year, nearly half of it was to this region.
It’s unlikely that the roll-out of VAT will alter the demand curve much — “There are regions such as Latin America which operate on significantly higher tax structures and that never led to a drop in volumes from the US,” said Bulusu.
The way businesses like MyUS.com operate is quite straight-forward. They offer Middle East consumers a US address to shop with. The orders are then sent to the address during checkout and thereafter forwarded to the MyUS.com distribution facility in Florida.
When the shopper believes he has reached optimum weight on the shipment, it is then shipped out.
“We actually charge on the actual weight of the shipment and not based on the volumetric concept, which also includes the space the package takes up on the aircraft during the shipping process,” said Bulusu, whose company launched a mobile app earlier this year, while it’s portal is also Arabic enabled.