Price comparison sites can boost e-commerce market
Consumers suffer due to soaring price differentials of goods
UAE residents are not realising the full benefits of e-commerce due to soaring price differentials on consumer goods, according to the founder of pricena.com.
The UAE-based website, a price comparison portal, has found that prices for consumer goods in the UAE can differ up to 30 per cent between varying locations, leaving many customers across the emirate unlucky due to a lack of transparency in the market around pricing.
“The price differentials in the UAE are among the highest in the world, putting some consumers at a disadvantage if they don’t have information about lower prices elsewhere,” pricena.com founder Haneen Dabain told Khaleej Times on Saturday.
Referring to an example, Dabain said a customer may go to the mall in Dubai and find a new Sony Xperia Z2 for Dh2,715, however the same product could be found for Dh2,099 online.
“So the customer could save more than Dh600 if only he or she had more information,” said Dabain, who recently earned a masters at York University in Toronto in software engineering before coming to Dubai to found pricena.com.
The market for price comparison is not developed in the UAE, with pricena.com one of a small handful of players. Pricena.com, which was established in July 2013, attracts 180,000 visitors a month and includes 40 stores and 100,000 products in its database. The site works by indexing prices similar to the way in which Google searches for content.
The overall e-commerce market in the UAE is expected to be valued at $10 billion by 2018, up four times from today’s level, according to a report from research firm Frost & Sullivan. But this massive growth in e-commerce has not yet translated into significant benefits for consumers in the UAE in terms of lower prices, Dabain said.
According to Visa International, the GCC e-commerce market, which is currently valued at $8 billion, is estimated to grow 35 per cent year-on-year to $15 billion by next year, making it the world’s fastest-growing market for e-commerce. Internet World Stats said there are over 90 million Internet users across the Middle East and North Africa region. Over the last few years, the number of online retailers has steadily climbed in the region, with the UAE making up the biggest share of the region’s e-eommerce market, followed by Saudi Arabia.
Price comparison sites, bringing greater transparency in pricing, are most beneficial to consumers in markets where there are multiple e-commerce players and none are established as clearly the cheapest. The market for price comparison has also proved lucrative. In the US, price comparison site shopping.com was acquired by eBay in 2005 for $620 million, while Shopzilla was sold to EW Scripts Company for $525 million in 2005.
“We’ve really seen that average customers have benefited from the growth in e-commerce in Canada or the US,” said Dabain, “But in the UAE, people can’t easily compare prices, and so until now, we haven’t seen the average person feeling the benefit of e-commerce as much as elsewhere.”
Price comparison sites can also help small- and medium-sized companies to compete in the marketplace by instantly giving them greater visibility. Many small offline retailers have been seeking to have their prices listed on pricena.com as they open their online presence.
“Price comparisons can help transform the retail landscape,” Dabain said. “Small players can become known and can grow, which ultimately leads to greater benefit for the consumer.”
Imad Rashid, 28, a Dubai resident who recently bought an iPad Air from a small UAE-based website called Zeetelecom, said he saved Dh250 through price comparison.
“Normally I would have bought the products from one of the big-box retailers at one of the big malls,” Rashid said. “But through pricena.com, I was able to find this small company that I hadn’t previously heard of that beat the prices of the bigger stores by 20 per cent.”
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