Regulations stifle e-commerce

Regulations and a lack of choice are stifling Dubai’s ability to participate effectively in e-commerce, according to a study by the Dubai Chamber of Commerce and Industry.

The study showed that, despite the high internet penetrations witnessed in UAE, which stood at 40% in 2006, a large proportion of companies still do not currently use the internet for business purposes.

Safety and security were cited as major reasons for businesses' reluctance to utilise e-commerce, with one quarter of respondents stating they have faced legal and security problems.

The study said part of the reason for the slow take-up of e-commerce could be because of the lack of internet provider choice.

There are currently only two internet service providers (ISPs) operating in the UAE, Etisalat and Du.One-quarter of respondents cited poor service provision from the two providers as a problem, while a fifth of electronic traders said regulations in the emirate were a major problem facing trade.

One in eight respondents also claimed that they had experienced problems with the specification and quality of products and slow processing of electronic orders that caused challenges and barriers to electronic trade.

E-commerce is a $6.8 trillion global industry that has grown 935% since 2004. Within the UAE the e-commerce industry was estimated at $ 1.16 billion last year, according to a report by the Arab Advisors Group.