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Surfing through compliance waves

Nisthula Nagarajan
Filed on June 24, 2021

The 'new normal' brings enormous new opportunities for e-commerce businesses. MBG's ECIC makes it easier for you to ride through it


Covid-19 was a catalyst and accelerator for e-commerce in the region. Its lockdowns, social distancing and work from home norms drove a fundamental change in consumer attitudes and behaviour, making online shopping everyday behaviour across society. 

The GCC e-commerce market will double to $50 billion between 2020-25, an annual growth of 16 per cent per annum. One-third of that, or 5 per cent per annum, is incremental growth due to the pandemic. The UAE leads in absolute and per capita market size as well as in penetration, while Saudi Arabia is a close second on market size and growing faster than the former. 

High internet penetration, strong infrastructure, a young population, and government initiatives in the region, and improved online security and new payment formats globally, meant e-commerce grew rapidly in the pre-pandemic years too. Now, the market has expanded in breadth. For example, sales growth in traditionally brick-and-mortar categories like groceries, or in card and other non-cash on delivery payments.  

The ecosystem now comprises large pure-play marketplaces, omnichannel click-and-mortar e-stores, specialist niche e-tailers, delivery aggregators, and manufacturers' Direct to Consumer (D2C) plays. Startups continue to mushroom. And e-commerce still attracts investors' attention and funding. GCC governments have supported the sector through many enablers and incentives. 

Surfing through compliance waves (KT29289623.PNG)

Naresh Manchanda, Partner
MBG Corporate Services

Naresh Manchanda, Partner, MBG Corporate Services says, "Cyber risk has more than quadrupled since 2002 and tripled since 2013. Cyber Insecurity can be prevented proactively through integrated compliance."

The new normal also means new challenges 

However, it is not easy for individual businesses. This is a rapidly crowding space dominated by one or two giants with deep pockets. Thin margins, high operating costs of fulfilment, marketing, etc., are driven by ever-inflating customer expectations. Adequate CapEx and working capital flows are essential. Strategic and operational excellence is therefore imperative but hard to sustain. Plus, there are the challenges of setting up, legal and tax, risk management, and so on. 

Given the pressures of rapid changes in technology, consumer behaviour and regulatory environment, these challenges are heightened for e-commerce.  

Help is at hand: Enter ECIC, MBG's e-commerce offering

MBG's E-Commerce Integrated Compliance (ECIC)  has risk advisory, cybersecurity, intelligent automation, legal, tax, unified In-Country Value and audit solutions for both new and existing businesses. Its unique strength derives from a mix of best-in-class technology and regulatory services, the perfect intersection for your e-commerce business, peopled by domain expert leaders.

Key ECIC services include the following: 

Risk Advisory: Comprehensive risk advisory and strategic counsel across the entire operational value chain, specifically enterprise risk management, governance framework, standard operating procedures, Internal audit services including tech audits, merchant onboarding, platform management, brand management and customer experience, logistics (inbound, outbound, and reverse), inventory and warehouse management, order processing and settlements.

Cybersecurity: Cyber defence by tech experts including technology vulnerability audit, gap assessment aligned with Payment Card Industry Data Security Standard (PCI DSS) and International Organization for Standardization (ISO) standards, data security, tech security implementation, third party risk management, business continuity management and stakeholder training.

Intelligent Automation: Tech advisory on cutting edge automation across customer experience, vendor management, catalogue creation, supply chain and other operational processes designed to optimise workforce, improve efficiency, and reduce costs.

Legal: Advice and execution across 'Portal', 'E-Commerce', and 'Commercial' license types. ECIC also facilitates business set-up across both mainland and free zone jurisdictions, advising on the best legal structure. It is a one-stop-shop company formation service that not only undertakes all regulatory procedures but also helps operationally, for example, with introducing logistics providers.

Tax: End-to-end advice and support on tax compliance and risk mitigation. VAT, excise, customs are the services under the domestic indirect tax umbrella. Critically for e-commerce businesses, ECIC offers a strong suite of international tax advisories on Permanent Establishment (PE), Royalty and Fee for Technical Services (FTS), Transfer Pricing, and Withholding Tax (WTH), etc.

In-Country Value: As a government accredited ICV certifying body, MBG helps e-commerce businesses get certified and advise on continual ICV improvement.

Audit Plus: Audit framework consistent with International Standards on Auditing (ISA) with a focus on ethics, confidentiality, training, and documentation.

If you are looking to navigate this exciting but complex landscape, help is just a click away.

Get in touch at uae@mbgcorp.com and +971-52-6406240.





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