With faster internet speed, a high mobile penetration rate, and access to credit and debit card facilities. The dubai is one of the world’s spearheads digital and online retail space. Today, the e-commerce UAE market accounted for $ 10 billion annual sales, set amongst the top regions in digital retail. A survey by Hootsuite and Social We reveals a significant percentage of UAE internet users now shop online. The survey results showed that 62% of internet users in UAEs now shop online and spend an average of $ 332 per purchase, making the UAE the biggest market for Middle-East online shopping.
With more than 90% of the population has internet access, e-commerce setup has become the most sought after solutions for entrepreneurs in the UAE. Furthermore, in the UAE’s efforts to diversify the economy, the government has introduced licensing of different e-traders, setting the sound stage for foreign investors to build their e-commerce setup.
Why Should You Start an Apparel Business In UAE?
If you ever walk around one of the famous malls in UAE, you will know precisely how much appetite for high fashion in parts of the world. Many famous names in the industry – from Balenciaga and Chanel to Gucci, Prada, and Versace – have opened stores in Dubai, keen to tap into this demand for quality clothing and accessories.
A business center and the Middle East’s fashion capital, Dubai has continuously proven fertile ground for entrepreneurs of the fashion apparel industry. Of ethnic and traditional, for casual and business wear, Dubai is home to one of the world’s largest consumer markets for apparel and accessories. While the conventional shopping mode as a brick and mortar store is still growing, online shopping has enabled companies to maximize their income clothing by expanding their products to the UAE growing number of online shoppers.
Entering the market is occupied by big names listed above may seem pointless – after all, there is no land SMEs can compete with Gucci or Prada when it comes to branding, marketing spends, or anything else for that matter. Conversely, the fact that these brands occupy this space in the UAE shows how great the demand is for high-quality clothing and apparel. And this presents a tremendous opportunity for smaller brands that can offer something that the big players can not – home-grown fashion boutiques.
Starting an online clothing store is a great way to debut a legitimate business setup in Dubai, which involved no rent, no utility bills, minimal staff, integrated marketing, and fail-proof security spending. As a business in the UAE, e-commerce stores also require licensing trade register and operate as a legal entity. Here is a complete guide on setting up an e-commerce store in Dubai.
What Are The Factors to Be considered Before Starting a clothing business in Dubai, UAE?
Understand The Dubai Fashion and Clothing Business
How well do you know the local fashion and apparel industry? And more importantly, whether you have experience or understanding of local fashion trends of UAE? The best way is to dominate the fashion merchandise through communities like Dubai Design District (d3) or work in the same store to which you want to open in one of the city’s countless shopping malls.
UAE clothing sales prospects are expected to improve over the next ten years. As economic conditions become more suitable, and consumer confidence arises. Despite the dominance of store-based fashion, online retail sales are witnessing steady growth. Many established brands to explore multi-channel retailing, either through a third party, their digital storefront, or both.
Menswear is expected to register an annual growth rate of about 3.8 percent between 2020 and 2023. Womenswear is expected to see the level of 4.9 percent compounded annual growth in sales over the same period, mainly driven by a steady footfall and increased spending mode. This data is from the pre-COVID-19; Therefore, there may be significant changes in these figures.
Target Audience Survey
Creating an apparel company without a target audience in mind is like going on a road trip without a destination. When determining your audience, it is essential to have an exact target audience in mind. Customers will help identify your target market demographics and psychographics.
What are your ideal client habits and personality? How can you position your brand to help your clients connect with the lifestyle he was looking through your product?
Strong branding is closely related to knowing your audience well. Be aware of what your target audience regularly do, or what social media networks they spend their time at the most can help a lot in creating a marketing effort that attracted them to your apparel business.
Source for the Material
The benefit of living in the UAE is that you are close to some of the world’s largest apparel manufacturing hubs, places like Ethiopia. Bangladesh, Pakistan, India, etc.
When looking for a material supplier, it pays to educate yourself about the materials used in clothing. It will allow you to make wise selections about the design and pricing without relying only on your suppliers’ recommendations. Final quality will significantly impact whether you can position your product as a premium or discount items.
You also have the option to obtain local supplies. Dubai is home to many traders who buy in bulk from Asia and sell to markets worldwide.
Market your Business for a Good Amount Of Growth
Having strong online visibility for your brand will not only help you market your products but will create a bond with your customers. Your client can provide valuable insight and share your latest offerings with their friends and family.
Customer service and word-of-mouth marketing are essential in the clothing sector. If you do not give good customer service, word will spread fast enough, damaging your brand. Make it easy for your buyer to do things like the product’s return and ensure that staff who are proficient in Arabic and English. If you cater to tourists, you might want to have staff who speak Chinese, Russian, and Hindi. For your website, consider adding features such as chatbots to make it easier to manage demand.
What Is The Process Of Starting Apparel Business in Dubai, UAE?
Apply for Business/ Trade License To Start Business in Dubai
To start an apparel business in Dubai, legitimize it. Dubai offers a wide range of e-commerce licenses in various jurisdictions from the mainland to the free zone’s location. I am choosing a permit depending on available capital and legal structure applicable to confident investors. A business license will allow the business to perform in the region that have access to government facilities legally, and other special incentives zone has the offer.
Decide Location for Business
Depending on your company’s type, you can establish the UAE fashion brands either on land or at free zones. If you are looking to open a retail outlet, the mainland, which was established in one of the malls UAE, tend to be the best choice.
If you set up a fashion brand e-commerce, it is possible to build your business in the free zone and benefit from the many benefits. They offer corporate tax and personal 0%, 100% ownership of the company, 100% repatriation of capital and profits, and 100% import and export tax exemption. You can even set up in free zones such as Fujairah Creative City without the need to take the office space.
Each stage of the e-commerce trade licensing process requires specific documents to secure approval from the UAE government.
The documents include-
- Filled and proven online application form
- Passport copy investor
- Proof of residential address in the country of residence
- a business plan for an online clothing store
- lease agreement for office space in DMCC
Add Online Payment Solutions
Adding an online payment solution allows merchants to enable next-generation electronics sales from the online store. It requires two accounts, commercial bank accounts and a merchant bank account.
Commercial bank accounts belong to businesses while merchant accounts are owned by the investor. Thus, it will process all online transactions from debit card buyer, credit cards, or pre-paid card system such as PayPal.
Well-developed infrastructure, a vast network of superhighways, and access to international markets. It all makes Dubai an excellent location for almost all types of businesses. As part of the brand’s logistics strategy, it is essential to partner with a reliable shipping company. The company that can deliver the goods they buy safely at the time to the buyer’s address. Shipping Companies in Dubai offers various packages companies to store e-commerce based on the brand’s specific needs.
Open a Corporate Bank Account in Dubai
Once you have successfully applied for your license and your business is established, you will be able to organize your company’s bank account. The application process is fast and straightforward. If you are doing business within the free zone, the staff can advise about the best bank. They will follow your requirements and even arrange a meeting at the branch for you. On the mainland, the establishment of a specialist can also provide the same service. Alternatively, you are welcome to approach local or international banks on your own.
However, the fashion industry in the UAE presents an opportunity that is truly unique to entrepreneurs with the required skills. Here we have a multi-million dollar industry, home to some of the biggest names in the business.