Time has certainly made the way we go about business better, hasn’t it? If you spare a moment to think about the era before the dawn of eCommerce, one had to physically tour retail stores to sample or view industrial equipment, for example. You’d do the leg work, quite literally, in order to get the goods you want. Now, online successes and less communion marketplaces such as Industbay have meant you can simply get what you from the convenience of your location. Be that construction machinery parts or even something as sophisticated as a CNC milling machine, digital experiences have meant greater convenience than ever before. But that’s just one way the UAE business landscape has changed in the aftermath. Let’s discuss some more.
Elimination of middle persons for direct buyer-seller relationships
Is eCommerce replacing traditional retailing? Not quite. One 2018 poll revealed that 44% of US citizens would rather shop online than in-person, with 56% preferring it the other way around. While the place of retailers remains assured even in 2023, that of the traditional middle person is fading into thin air.
The retailer is the connection between the wholesaler and the market or customer. On the other hand, the middle person we are referring to sneaks in between retailers and the end user of the product or the consumer.
Less commission online marketplaces are throwing them out of the equation, serving as the new bridge between consumers and retailers, and sometimes even connecting wholesalers directly to their market. The result has been a new business landscape in the UAE where direct buyer-seller relationships are thriving. You need not look any further than Industbay, a platform that links industrial equipment sellers and buyers, for proof of this in action.
Expanding the UAE market beyond its boundaries
If you think about how traditional retailers did business, you’ll find that the market was initially very localized or constricted to a specific geographic region. Retailers would rarely serve international markets, and when they did, the process was usually long, costly, and inconvenient.
The emergence of online marketplace places for industrial machinery, for example, has allowed manufacturers and suppliers to open their doors to the world. For instance, a hand tools distributor in the UAE doesn’t have to just sell products in this region. They can offer their equipment to companies in America, or wherever else that demand arises.
Consequently, online marketplaces have allowed businesses in the UAE to tap into an international market base which has meant:
- Less domestic competition, allowing all types of businesses to thrive
- Higher revenue potential due to 24/7 access to a bigger market
- Easier diversification for businesses in terms of product offering
- Access to foreign investment opportunities
- Diversification for UAE businesses in terms of markets. The reduction of reliance on a single market has meant greater stability for companies
It will get bigger and better for businesses as the eCommerce model strengthens and consumer preference for online shopping across borders continues to grow.
Doing business without the need for physical inventories
Do you need inventory for eCommerce? Only if you want to or are a traditional retailer, but otherwise, many businesses can do without it. Going back to the Industbay example. This online platform provides a means for buyers and sellers to interact, serving as the go-between. However, they do not store these industrial equipment or spare parts themselves. If they had to, the amount of floor space -and the associated utility expenses- they’d have to pay for would be astronomical.
By eliminating overheads such as a warehouse, these marketplaces have been able to take less commission out of the seller’s pocket, who in turn reap higher profit margins and can offer better deals to their consumers.
This inventory-less manner of going about businesses has benefited buyers as well who have enjoyed more competitive prices. It has also given rise to a more conducive business environment, where entrepreneurs need very little capital to set up a business from the ground up.
Buying patterns in the UAE are shifting too
This has been especially true for businesses that operate via a business-to-business model. Previously, B2B models largely relied on salespersons to provide product guidance, demos, and general brand education wherever it was required.
However, that has all changed with the adoption of online marketplaces. Now, such companies have to turn to influencer and digital marketing at large to market their products or services and attract/qualify leads.
Today, before sellers purchase anything online, they consider the company’s digital presence in terms of:
- Market or content authority
- Quality of email marketing campaigns
- Reviews and testimonials
- Third-party online endorsements, etc.
While business has become digitalized, brands have still pretty much maintained a human face, so to speak, as the need to personalize services and connect with buyers has become key to addressing specific consumer needs.
Traditional retailers are now transitioning online
If you can’t beat them, join them. Time has proven this phrase true over and over again. With the benefits of online spaces apparent for buyers as well as suppliers, brick-and-mortar businesses also want a piece of the pie. It’s a matter of adopting change or perishing.
Due to this transition, retailers are also creating a digital presence online to complement their physical existence. The result has been the creation of new hybrid business models in the UAE that operate both in the digital and physical realms.
For example, some retailers and wholesalers are partnering with low-commission online marketplaces, which are serving as somewhat of an online subsidiary or extension of the retailer. This works much the same way a company can set up a new branch in one location, but instead clears its own corner of real estate on the vast digital highway.
Constant Change
Online marketplaces have been a revolution over the past couple of years. While some see them as alternatives to traditional retail, I feel that they complement each other, like the yin-and-yang concept. Nonetheless, their rise in popularity has sent change reverberating across the UAE business landscape. The effects have been more direct buyer-seller connections, changes in buyer patterns, and more conducive environments for all types of businesses regardless of size. Keep a better eye on the UAE industrial business scene by following the Industbay blog.
