Logistics Tariffs Stifling E-Commerce In The Middle East

Aramex warns high tariffs are holding back online retail business in the region.



E-commerce in the Middle East is being held back by the high cost of logistics tariffs, the CEO of Dubai-based logistics firm Aramex warned today.

“If you want to create jobs, if you want to have a flourishing e-commerce industry, you need to open up the market,” said Fadi Ghandour, founder and CEO of Aramex.

“In some countries tariffs are so high it is easier to buy from New York than your neighbours,” he added.

Ghandour’s comments were made at the launch of EZStore.me, an initiative backed by Aramex, Google, Paypal and ShopGo to help SMEs bring their business online and expand their sales channels through the web.

The initiative will cost SMEs $650 to sign up for the first year, and focuses on education and support, with each company providing a different part of the offering.

Aramex will handle the shipping and delivery, while also offering SMEs that sign up to the scheme $100 credit on their business account.

Google will help with advertising and marketing, providing $300 worth of AdWords credit and 13 weeks of support.

Online payment processor Paypal is one of several transaction options available under the scheme and will offer three months of free transactions to companies that sign up.

E-commerce firm ShopGo will create and manage the company’s website and is offering a 50 per cent discount.

An estimated 110 million of the Middle East’s 350 million population is online. Of these, 27 per cent shop online occasionally and six per cent regularly, according to Paypal data.

In 2013 the e-commerce industry is estimated to be worth $11.2 billion in 2013 and is set to rise to $15 billion in 2015, said Paypal.

The executives present at the announcement declined to comment on how many customers they expected in the first year but Hassan Mikail, global director e-commerce at Aramex, admitted he would like it if several hundred came forward.

The initiative is for now limited to the UAE but is set to be expanded to other countries in the future.