It’s no secret that the future of digital retail is hugely exciting. So, who could blame you for wanting to launch an online business in Dubai?
The world has fallen in love with the convenience and abundance of shopping online. In fact, ecommerce rode a tidal wave of growth during 2020. While many brick and mortar businesses over the past couple of years have experienced a significant contraction, others flourished to expand their businesses online.
The pandemic catalysed a huge shift toward the digital marketplace, and many small business owners are now jumping on board. It can be a good way to earn money, with plenty of opportunities for passive income as well.
This was the case across the globe and it was certainly no different here in Dubai. If you are interested in starting an online business, you’ve come to the right place. Your online business idea could become a reality, faster than you think.
We’ve prepared the ultimate guide to starting a successful online business in Dubai. We’ll walk you through all of steps you’ll need to launch and operate your e-commerce store successfully.
Why start an online business in Dubai?
Starting an online business offers a range of benefits for established companies and aspiring entrepreneurs alike. As many local businesses have found, starting an online business in Dubai is not as difficult as you might think.
Whether you are opening up your existing business for transactions made via a website or app, or starting a new e-commerce-driven venture, the path to online success remains the same. Truthfully, anyone wishing to start an online business with the willingness to work hard can quickly see their online business ideas earn big money.
While there are definitely challenges to anyone wanting to create a profitable eCommerce site, it’s not an impossible task.
The Benefits of Online Business
Online shopping is now one of the most popular activities globally. In 2020, retail e-commerce sales worldwide amounted to USD 4.28 trillion. Of those,18% of retail sales have been attributed to e-commerce.
In the UAE, the e-commerce market saw a huge leap in 2020, recording a USD 3.9 billion market value and a 53% year-on-year increase. And by 2025, experts foresee that e-commerce in the UAE will reach USD 8 billion.
In a recent study on the digital transformation in MENA and Pakistan, 53% of MENA consumers say they are doing more of their shopping online now compared with before the pandemic started.
The lifestyle perks of initiating an online business in Dubai are incredibly appealing. Firstly, you’re really your own boss. Once you set up the important business essentials like writing a business plan (if required), creating your own website, setting up an eCommerce store and building a social media presence – you’re ready to hit the ground running.
You can work online, establish your own schedule and enjoy your free time. With a reliable and regular customer base, you’ll be amazed at how extremely easy it is to maintain a passive income – all without the need for a brick and mortar store!
Best Online Business Ideas
So, let’s brainstorm together.
Here are a few questions to ask yourself before you really invest the time and effort into starting your own online business:
- Will you use social media marketing to build an audience that trusts you and your brand?
- Do you have a passion for fashion and want to sell t shirts and apparel online?
- How do you ensure you get paid and is this type of venture fiscally worthwhile?
- Do you want to dabble in the podcast industry?
- Do you want to start a YouTube channel and make YouTube videos?
- What will they be teaching your audience?
- How will this offering generate an income so you can develop a lucrative business?
What about online courses?
If you have a particular skillset or are a trained professional in an interesting field (ie – fitness, creative writing, cooking), then there’s likely a market for your specific talents! It’s truly one of the best online business ideas around.
Developing an online course or a series of online courses is a fantastic way to make money online. Similarly, writing and selling ebooks presenting digital products to your clients is a great business idea.
Ebooks, audio courses, digital downloads and printable guides are all great offerings to showcase your creative skills online. It can also generate revenue in the background, targeting a broad audience within a worldwide customer-base.
Deciding What To Sell Online
According to Shopify, there are a few things that can help when it comes to refining a good online business idea and deciding on a service or products to sell:
- Solve a customer pain point – What are the challenges that your potential customers are currently facing? Consider what ways you can help them and make their life easier.
- Appeal to enthusiastic hobbyists – Is there a specific niche market that you understand really well?
- Go with your passion – Sometimes, your passion could be an excellent source of inspiration for a product or service.
- Consider your professional experience – What are you good at? You may have certain technical skills that can be marketable.
- Capitalise on trends – Stay on top of what is new and exciting in the market.
- Read customer reviews on existing products and look for insights into how their needs could be met in a better way
- Browse what’s trending on online marketplaces through this list
- Research products with higher profit margins.
Start your search with related products – You can always offer a product or service that can improve an existing product in the market. As an example, when wearing face masks became mandatory and high in demand, several individuals have started selling face mask holders, strings, beads, and other accessories.
Does it cost money to start an online business?
One question many people have is – can you start an online business with no capital investment? Well, the answer here is yes. Strictly speaking starting a business online certainly starts out for free. As there’s no physical brick and mortar business to accomodate, starting an online business has fewer overheads with just a handful of startup costs to consider.
Everything happens in the digital space, which could include organising your social media sites and paying for eCommerce and website construction. Some people find the process of forming an online business to be a steep learning curve, however, you don’t need to be that tech savvy to get started.
Online business models
There are many different types of online business models that you could adopt, depending on the nature of your business. They are all common in Dubai and the UAE, although B2C is undoubtedly the most popular model due to its low barriers of entry.
The B2C model is the most popular online business model, it encompasses a wide range of options, including:
- Direct selling – The most widely-adopted B2C model, in which people buy goods from online retailers.
- Online intermediaries – These are liaisons or go-betweens who don’t actually own products or services that put buyers and sellers together.
- Advertising-based B2C – This model uses content marketing to build an audience used to sell advertising to.
- Community-based – Sites like Facebook and Instagram, which build online communities based on shared interests, help marketers and advertisers promote their products directly to their users.
- Subscription – Direct-to-consumer services (Netflix and Spotify) charge a fee so consumers can access their content.
A business sells its product or service to another business in a B2B business model. Most of the time the buyer resells to the consumer. These transactions have longer sales cycles, but greater order values and recurring purchases.
The C2B model caters to freelancers and independent contractors that do compensated activities for a business or organisation. In this e-commerce model, a website may allow clients to post work they need done and have businesses compete for the job – Think Upwork or Fiver. Affiliate marketing services are also classified as C2B.
A consumer-to-consumer (C2C) online business in Dubai is also often known as an online marketplace. It connects customers in order to exchange goods and services and generates money by charging transaction or listing fees. This might include a business built on Amazon or eBay for example.
A dropshipping business is a unique way to operate a small business and start selling online.
Dropshipping is a fulfilment technique in which a shop does not stock the items it sells. Instead, it buys items from third-party vendors who deliver the products directly to buyers. As a result, the seller is relieved of direct product handling. Dropshippers essentially act as middlemen by connecting buyers directly to manufacturers.
Dropshipping is so popular due its low operational costs compared to the standard retail model. You don’t need a physical location, staff, utilities or even inventory! All you really need is a website and the ability to drive and convert traffic.
The steps to start an online business in Dubai
So, ready to take the plunge into the world of ecommerce online business? Discover everything from honing a business niche, rolling out a website, how to attract clients, making money from instagram and start selling online.
Whether you have a great online business idea in mind, or you want to turn your side hustle into a profitable business and get paid – here’s the way to get started.
Following are the steps you’ll need to take to get yourself set up for online business success.
1. Choose a product or find a gap in the market
Keep in mind, that this first step is sometimes the biggest challenge that many aspiring entrepreneurs face. It’s also possibly the hardest step of all. You want to find profitable, trendy products with good margins. They may be either single products or a comprehensive product line that fills a market niche.
Due to the costs involved in e-commerce, including SaaS fees, shipping fees, advertising costs and labour, it is important to choose products that have profit margins of at least 50%. In order to absorb the price of customer acquisition, finding a suitable product or range is the essential first step.
Sourcing your product or manufacturing
Now that you have a great product in mind (shhh, don’t tell anyone yet), you need to think about how you are going to source it.
A good place to start is by researching online. Websites such as Yellow Pages, Abraa and Alibaba are excellent sources of information. Reaching out to local manufacturers and suppliers as well as to your network should also be a logical first step when hunting for a vendor.
Online competition is fierce and every e-commerce business strives to provide high-quality products that meet increasing consumer expectations. As ecommerce becomes more customer-centric, product quality becomes critical for success. Make sure that you source products that encourage loyalty and positive brand associations.
The best-quality product is useless if you can’t easily purchase it and bring it to market so look for suppliers in locations with strong infrastructure and convenient transit.
2. Choose a company or brand name for your online business
If you’re trying to come up with a name for your online business in Dubai, you’ll be happy to learn that there aren’t many limits on what you can call it. The rules are simple:
- Your business name should not contradict your company’s activity. It is highly recommended that your business name should reflect your activity.
- Your company name should not already have been reserved or protected by copyright by a similar business in UAE. As such, it is best that you use Google to search your preferred name to make sure it does not belong to others.
- The name should not contain obscene or indecent words, and must not be offensive to the general public, even if it is a person’s name.
- The name should not indicate God’s names or his divine attributes neither in Arabic nor in English e.g., Al Qader, Al Aleem, Al Razzaq, etc.
If you are uncertain about whether or not your business name is legal, check in with one of our business setup experts.
3. Buy a domain and social handles
Domain names and social media handles are a huge part of any online business. The next step is to secure a domain name and (hopefully matching) social media handles. A domain name is an address at which your e-commerce shop will live. Social media handles are your name as displayed on your social profiles.
If possible, it’s really beneficial to have both the domain name and social tag to be congruent. If the ones you want aren’t available, you may need to get a bit creative to find one that works well with your business name. For an online business in Dubai, the most common domains are either top-level domains such as .com or country-specific domains such as .ae.
Some of the most popular places to buy a domain are:
4. Get an eCommerce license
Next, you’ll need to determine if you are required to get an e-commerce license.
Certain online business laws in the UAE stipulate whether a large or small business can sell services versus products. If your business sells physical products in the UAE via online platforms, then you will need to get an e-commerce licence.
If you are an online fitness trainer or a life coach offering online classes, then you don’t need an e-commerce licence. Instead, you’ll need a professional licence, which allows you to offer your professional services to your clients.
Another example of when you do not need an e-commerce licence is if you sell digital products, even if you do have payment gateways and online transactions. Your business will be categorised as “online services” since there are no physical goods being delivered to customers.
If you’re not sure, then it’s best to check with a company formation specialist as they will be able to inform you about the best licence and activities to apply for your online business.
5. Choose an eCommerce platform
What is an e-commerce platform?
An e-commerce platform is an all-in-one solution for running an online business.
It’s an essential aspect of your online business interface, which ensures excellent customer service to potential buyers. This platform is a piece of software that handles all aspects of both the vendor-side and customer-side of a transaction.
What are the best e-commerce platforms?
Many e-commerce platforms exist to assist in the creation of an online store that is simple, cost-effective, and quick to set up. Here, we will take a look at the most popular e-commerce platforms and break down the advantages they offer online businesses.
Shopify has quickly become the world’s most popular, fully-managed ecommerce platform since its launch in 2004. It is used by over 1 million retailers around the world with more and more companies choosing to migrate over from existing platforms.
Its popularity is, to a large extent, due to its simple and easy-to-use interface and excellent app marketplace. Unlike Magento, Shopify is a software as a service (SaaS) monthly membership service and includes website hosting, domain hosting and mail hosting.
There are many great themes for your store, both paid and free, with almost any feature you might want to use to sell your product. You should understand that Shopify is developed in a proprietary coding language called “Liquid.” If you need something very customised for your brand, you will need to hire a Shopify developer to modify or write the template code for you. That said, if you are happy to use a theme without requiring deep customisations, you can create a stunning website and online business brand using Shopify.
WooCommerce is a WordPress plug-in that easily converts your WordPress site into an online store. Despite the fact that it is a plug-in, WooCommerce is an exceptional online platform. It comes with virtually all of the features that every other known platform possesses. WooCommerce is one of the most popular e-commerce platforms in the world, with 3.8 million online businesses using it.
WooCommerce is a free and open-source e-commerce platform. To utilise it, all you need is a WordPress site. The platform is great for small- to medium-sized enterprises but it does introduce limitations at the enterprise-level.
Keep in mind that, unlike Shopify, WooCommerce is not an out-of-the-box solution that you can set up in one day. WooCommerce might take you more time to get up and running and it is more “hands-on”, in the same way that WordPress is.
As one of the most dependable and effective e-commerce systems, Magento is widely regarded among online retailers. In fact, Magento is popular for large businesses and enterprises looking toward growth. Magento excels at scalability and performance, which is why it accounts for over a quarter of the e-commerce market. This platform is used by companies such as Burger King, Huawei and Liverpool Football Club.
For enterprise-level online shops, Magento is regarded as the most suitable ecommerce platform. Because Magento is geared toward enterprise-level companies, it’s not an easy platform to navigate. As such, you’ll likely need the help of developers to build and run a Magento-based online business in Dubai.
BigCommerce now has over 55,000 online stores and is the closest rival to Shopify for features and ease-of-use.
A comparison between the Basic Shopify plan and BigCommerce Standard plan pricing will reveal the features inclusions available in each. These are the respective “entry-level” plans and have their own choice of inclusions and exclusions.
How to Choose The Right Platform For Your Online Business
Chances are that if you are reading this guide, you don’t run an enterprise-level online store. So, we can probably rule out Magento in the beginning.
When creating a new online business, the deciding factor is your aptitude for technical work and “doing-it-yourself”. If a low-cost platform is important and you don’t mind getting your hands dirty, WooCommerce is the way to go
On the other hand, if you are like most online entrepreneurs and favour ease-of-use, functionality and a self-managed solution, we recommend that you choose between Shopify and BigCommerce.
While they are both great, our favourite is definitely Shopify. The intuitive UI, great documentation, community support, app marketplace and amazing themes make it the superior choice for most people starting an online business.
6. Get your brand designed
Whether you’re a large-scale enterprise or a small online business, having a professional and streamlined brand design is key to your success. A great business brand helps prospective clients recognise and remember you and your services. It can be carried throughout any online platform, including social media accounts, web design and logos and products.
Now, unless you have graphic design skills, we advise you not to look for shortcuts when it comes to your branding. In fact, we can’t understate how important it is to develop a great brand. In 2022 and beyond, it’s everything. Even Google says so!
Your brand represents your business’s ‘personality’, values and philosophy. It is a social construct that communicates, both visually and with tone of voice, who you are and who your people are! You want your online business to feel like somewhere shoppers want to be. You get a very short time span to create the right impression online. Therefore, your brand is the answer to maintaining shoppers’ attention spans long enough to convert them into customers.
7. Build a beautiful website
An important component of all profitable online businesses is the presence of a professional website. The web design should reflect your brand, tone and be consistent across all online platforms.
Once you have a good brand design, it’s time to build a website on the ecommerce platform you have chosen! Depending on what platform you have chosen, this may be something you can achieve yourself. However, we will stress again that, unless you know what you are doing, it is almost always best to hire professionals.
There is a lot that goes into designing a professional, modern website and it’s very easy to create a poor user experience. You’ll want to understand:
- Website speed
- Image optimisation
- User flows
If you can’t afford a custom build, we recommend that you buy a premade theme. Expect to spend a few hundred AED on a good theme. If you choose wisely, it will pay you back many times over in the flexibility it offers.
8. Digital Marketing
Drive visitors to your online business in Dubai
So you now have an online business in Dubai! What’s next? Customers would be nice!
So, how do you get customers? Well, the answer is Digital Marketing and it can be the make-or-break of your online success.
Creating high-quality content is an essential part of your marketing strategy if you want to sell online.
In all honesty, it’s very difficult, nigh impossible to drive organic traffic with poor, sparse content. It just won’t happen!
Think about it from your customer’s perspective: they want to know why they should buy from you. It’s your job to explain exactly why.
So, content marketing is how we communicate this message.
Good content plays several crucial roles when growing an online store:
- It attracts potential customers to your site
- It demonstrates you as the authority on the subject matter.
- It builds trust within your target audience
- It helps any search engine, such as Google to better understand your site and the keywords it should rank for.
Make sure you post content that is relevant to your target audience and through the right channel, in order to keep your community engaged. After all, content marketing is about building a relationship with your audience and creating an accessible avenue of communication. This helps to build loyalty and trust among your target customers.
Ultimately, this will help provide useful market research data, which will help your online business expand in the long term. Knowing who you need to market to and what makes them tick will increase profits and provide plenty of opportunities for growth in the future.
Web content includes any of the following information that you intentionally create for your visitors:
It is crucial that your content is unique and not copied from somewhere else. You can receive a penalty from search engines if you duplicate other sites’ content.
Spend some time making your content actually valuable. Accurately describe your products, describe their quality and take professional photos and even videos to demonstrate their benefits.
Surveys show that 97% of consumers find bad content negatively affecting their trust in brands. Building trust is everything online. Without a physical presence to help sell your brand, your content is all that customers have when choosing whether to buy from you.
SEO stands for Search Engine Optimization. It is the collection of practices that help search engines to discover, assess and rank your content higher than your competitors.
SEO is often considered to be mysterious and complex. However, in reality, it can be thought of as nothing more than the art of making the best possible website that your customers want to use. If your website answers a customer’s question better than other websites do, and if Google’s bots (software that crawls and analyses your site) discover a healthy codebase and site architecture, you will do well in SEO.
Most companies these days choose to enlist the support of an expert SEO consultant. SEO and content marketing go hand in hand. As your content starts to cover a range of topics, you will naturally begin to rise in SERPS (Search Engine Result Pages). As your site grows in authority, so do your rankings.
SEO can become one of the highest-ROI (return-on-investment) activities that you can do for your online business in Dubai.
For businesses wanting to scale quickly, advertising is a must in 2022 and beyond. SEO is very reliable over the long run. However, it takes at least 6 months for it to kick in and start producing tangible results. So what do you do about getting traffic, customers, product reviews and revenue now?
Your answer is advertising, both in the form of PPC (Pay Per Click) and paid social. Advertising is particularly important in the beginning to get your business quickly off the ground. While ad costs are going up and up, you will likely want to factor them into your margins as an investment in your long term success.
In most cases, using Google Local Service Ads is a viable option for many online businesses, especially those just starting out. The reason why Google ads are a great idea initially is because they can be utilised on your site irrespective of the amount of visitor traffic your online business receives.
Now, affiliate marketing works in a somewhat seamless way for many online businesses. You can embed links to products that you’re promoting as an affiliate. Each time a customer visits your site and buys the product, you get a commission.
Social Media Marketing
Social media is a highly prevalent aspect of most online businesses these days. In fact, plenty of modern businesses hire a social media marketing specialist to look after all the content on these platforms.
Given that 71% of adults are on social media, the odds are promising that you’ll be able to contact your target market. Facebook, Twitter, YouTube, or other social media platforms are goldmines for a potential customer base.
Social networking is such a powerful way to spread the news about your brand, events and promotions. Because of this, it’s one of the most highly-suggested e-commerce website marketing techniques.
Social media is inexpensive and high impact if you understand how to use the channels correctly. Furthermore, you can streamline your content creation to let people know about your products and services and why they’re unique.
While social media is convenient to use, it’s not a platform that you as a business owner have much control over. As such, you can be bound by their rules of engagement, which may mean as algorithms change, so too does your direct visibility.
In this way, collecting email addresses is a surefire way to stay in contact with your customers at all times.
It’s a highly coveted position for any small business to find itself in. That is, to possess a reliable customer email list.
Email marketing is a wonderful way to engage directly with your audience, keeping them in the loop of your business activities. You can instantly and efficiently communicate your latest updates, products, and offers and link to your socials and website. It’s also a great way to conduct market research to get to know your target market better. Email marketing is an ideal way to develop an ongoing relationship with your customer base.
Creating a shoppable environment through targeted, personalised newsletters is incredibly valuable. Also, it’s a great way to ensure that your audience feels valued by your brand. This is also a great opportunity for feedback.
Things to know before setting up an e-commerce business in Dubai
1. Choose the right business structure
Determining the structure of your company is a critical step in setting up a new business in Dubai. Deciding on a company structure primarily depends on your activities and preferences. For example, if you want 100% ownership or prefer having a local sponsor or partner.
In the case of e-commerce businesses, the ideal company structure would be a Limited Liability Company (LLC) and a Free Zone Company. Getting advice from a business setup consultant can help you determine the right structure for your e-commerce company.
2. Set up your online business in the right jurisdiction
You can register your company in a free zone or in the mainland, but it will depend on the nature of your e-commerce business.
A mainland licence gives you the freedom to trade or sell your products and services directly to the local market, while registering your company in a free zone will require you to work with a local distributor.
Furthermore, there are more than 30 free zones in Dubai. And each one offers complete foreign ownership and the ability to trade internationally.
In choosing a jurisdiction, consider the factors that will benefit your business more in terms of building market share and scalability.
3. Open a business bank account
Once you’ve successfully applied for your e-commerce licence and established your business, you should set up your business bank account to manage and keep track of your finances.
You may be tempted to use your personal bank account for convenience and to avoid additional fees. However, revenue from your business can be much more difficult to track when combined with your personal finances.
It can also create confusion when determining the tax liabilities and cash flow of your business, leading to inaccurate bookkeeping.
Now that you have a better idea of establishing an eCommerce business in Dubai, you’re ready for the next step. Get everything prepared to start operating your online business. Enlist the help of a reputed business setup partner, like Virtuzone, today.
Build your online business in Dubai with Virtuzone
Considering starting an online business in Dubai?
Since 2009, Virtuzone has assisted over 45,000 entrepreneurs and small business owners in establishing their companies in the UAE. We are the most trusted company formation specialists in Dubai and the UAE, with in-depth knowledge of the complete business setup process.
We have more than a decade of experience setting up all types of businesses in the country, including free zone and mainland companies, as well as providing business support services that help our clients succeed – from branding, PRO and mail management, to IT support, accounting, VAT and payroll.
If you are interested in business setup in Dubai or anywhere in the UAE, please fill out the form below and our team will contact you shortly.