e-Commerce industry has had a lot of mixed messages for the region over the last few years. Many players entered the market while a few took the exit door. We have been running a series of interviews with existing e-Commerce players in the region asking them how do they manage their business and what challenges do they face. This interview is part of a series called e-Commerce Entrepreneurs in the Middle East.
Today we have interviewed Julien Pascual one of the founders of EmiratesAvenue.com, which is one of the first e-Commerce websites established in the region selling electronic items online. The EmiratesAvenue group was formed in 2008 which manages EmiratesAvenue.com for electronics and Dubai-Pet-Products.com for pet food, toys and accessories. Its associates are French, Indian and an Emirati.
What motivated you to start EmiratesAvenue.com?
I was in Dubai for a holiday with my wife and while searching Google, I couldn’t find any online electronics stores. Coming from Europe where online shopping is common, this was a surprise for me and also a potential business opportunity. Back then I was working part time as an SEO consultant and I knew that either there were no online stores and if there were any, they must be pretty bad in SEO. Luckily, we were the first purely electronic store back then and now more than 38 electronics online stores are active in the UAE.
Most outstanding factor of EmiratesAvenue.com that distinguishes you from the competition?
We do not fight on prices; we offer the best price we can, keeping in mind that we offer a warranty and that we are here for the long run. We are online since 2008, many have come and gone, we are still here and here for good and this is what reassures people the most. Lots of clients had a bad experience when some online stores were shut recently as they were left without support/warranties on the products bought. We want to ensure that our clients don’t go through a similar experience and that’s why we ensure long term operations, and 24×7 free delivery (during working days).
How important is mobile commerce for you?
As of now, we don’t see a huge impact on mobile commerce; we are working on an app that will let people check prices and updates / tips on products.
Can we get an insight to EmiratesAvenue.com’s sales volume and net profit for last year?
We sold 30% more in 2012 than 2011
What’s the average margin you expect to get as an e-Commerce retailer?
The average margin on purely electronics products is 3 to 5 %, something that most customers do not realise. I often see people saying on forums that online stores make so much money when an iPhone or a Blackberry comes out, we don’t! When we sell an iPhone at AED 4000 the 1st week of release, it means that we buy it for 3900 (only AED 100 profit, less than 3%). The issue is always the same, supply and demand; right now we have a good supply of iPhone 5 and iPad mini since their launch. This helps us in providing great prices for the products (AED 2477 for an iPhone 5, AED 1830 for an iPad mini)
How have factors such as SEO, user experience, site design, those less visible but very important aspects of having web presence, been contributors to your success in addition to more publicly visible things such as stories and social media?
We work hard to make our website look decent and professional but not too fancy; studies have shown that if you look expensive, people will think your products are more expensive. For example, the leading e-commerce store in France, cdiscount.com could potentially hurt your eyes if you spend too much time on it and it doesn’t look very nice, black and white or super trendy but it sells the most. SEO is very important; it brings 50-70% of our traffic, the rest being word of mouth. I think that we have spent a total of AED 700 on Adwords and Facebook since 2008, we only get business from happy customers and their friends/relatives which is why our number 1 priority is customer service and to deliver what we promise. Instead of investing in advertising, we invest in good partnerships (suppliers and logistics), and in people who will do an awesome job.
Any plans to start a retail store?
Not at all, our strategy was always to keep low over heads and this is one of the reasons we are still here and still making money while offering great prices.
Your biggest challenge in the region for your e-commerce start up?
When we started, the challenge was to get people aware that online stores were available, people didn’t look online for a phone, they were going to the mall, we got lucky with delays in retail store to feature the iPhone 4 and later the 1st iPad which made people search for it on Google, and we were there to deliver. Now the biggest challenge is to stay calm when you see a 40th website doing the exact same thing as you, killing prices to try to get some market shares when you know that they will disappear very soon and will have made you lose some money for no good reason.
What do you think will happen to the e-Commerce industry in 5 years in the region?
I guess and hope, that there will be much more sense and that the number of players will reduce, keeping the best ones in the game, there will probably be some fusion between top stores in order to become bigger and more stable. UAE is a small market, with only a few million people able to buy online, there can’t be room for so many electronics stores and now even deal websites who also want to sell electronics.
Your biggest competitor?
Anyone who sells iPhones, iPads, Blackberry and Samsung products, being online or offline. We are proud to have a huge number of clients returning to us. We have a particular client who buys 12 items of any new Apple products to give it to his family, he just texts me to confirm which model and we are done so I guess that our biggest competitor might be us in the end, the team, where we have to maintain our high quality of service, and we will, because if we keep doing what we do today, we do not fear any competitor.