His Highness Sheikh Maktoum Bin Mohammed Al Maktoum leads delegation at groundbreaking ceremony of Dubai CommerCity
Dubai, United Arab Emirates, March 7, 2019: His Highness Sheikh Maktoum bin Mohammed Al Maktoum, Deputy Ruler of Dubai, led a delegation at the official groundbreaking of Dubai CommerCity, the first e-commerce free zone in the MENA region.
The project – a joint venture between Dubai Airport Freezone Authority (DAFZA) and the Wasl Asset Management Group – is set to boost the development of the booming e-commerce sector in the region.
His Highness Sheikh Maktoum bin Mohammed Al Maktoum was accompanied at the milestone event held in Dubai’s Umm Ramool area by His Excellency Dr. Mohammed Al Zarooni, Director General of DAFZA, His Excellency Hesham Abdulla Al Qassim, CEO of Wasl Asset Management Group, and senior dignitaries.
His Highness Sheikh Maktoum bin Mohammed Al Maktoum confirmed that Dubai CommerCity is being developed in line with the vision of HH Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, to cement economic growth and diversification. It also aligns with the national objectives to develop a globally competitive knowledge- and innovation-based economy, led by Emiratis, to promote the participation of non-oil sectors in Dubai’s GDP.
His Highness Sheikh Maktoum bin Mohammed Al Maktoum pointed that Dubai CommerCity is one of the strategic projects to elevate Dubai’s position as a leading hub for e-commerce, and lay the foundation of economic diversification strategies and smart transformation. His Highness said that the Project aligns well with the UAE’s regional leadership in the aviation, logistics, free zones industries and with the Dubai Plan 2021, to become the global leader in ease of business and a preferred investment destination.
His Highness Sheikh Ahmed Bin Saeed Al Maktoum, Chairman of Dubai Airport Freezone Authority, commented: “Dubai CommerCity has received global attention from leading brands in the e-commerce sector. It is one of the most dynamic industries in the Middle East and particularly the UAE, which is the fastest growing market for e-commerce around the world. The e-commerce sector in the UAE is expected to reach US $26 billion by 2022.
“Dubai CommerCity will shape the future in Dubai, and become a regional hub for the industry by providing unique services that add value to customers in the MENA region.”
Dr. Mohammed Al Zarooni, Director-General of DAFZA, said: “Dubai CommerCity provides an ideal opportunity for major international and regional manufacturers, distributors and electronic retailers as well as companies operating within the e-commerce eco-system such as e-payments platforms, IoT, service providers and many more, to set up their businesses and provide their services for GCC, MENA and east Asia regions.
“Dubai CommerCity will have state-of-the-art technologies and modern designs to help improve the quality of customer experience in the region. In cooperation with our strategic partners in the Government of Dubai and the private sector, it will provide an encouraging and stimulating environment for the growth, as well as a range of investment advantages.”
HE Hesham Abdulla Al Qassim, CEO of Wasl Asset Management Group
Strategic Location, Comprehensive Services
Dubai CommerCity is executed in two phases in Umm Rumool region in Dubai with an area of 2.1 million square feet, with a budget of AED 3.2 billion. It is divided into three main complexes which are: the Business Complex, the Logistics Complex and the Social Complex. The project will be the first-of-its-kind e-commerce free zone in the MENA region, providing infrastructure, services and facilities. It will present the ideal gateway for Dubai and the UAE in general, to enter this fast-growing sector, with competitive advantages to attract Foreign Direct Investments (FDIs), as well as global leaders in e-commerce, and address present and future needs of the industry’s growth.
The strategic location of the free zone which is located near Dubai International Airport, in addition to the infrastructure, services and facilities provided by Dubai CommerCity will attract companies to the region. The industry requires a comprehensive infrastructure to support the operations of such companies, including swift order fulfillment and an advanced electronic and digital eco-system, to cater the large increasing demand on goods and the services related to it, which is what DAFZA and Wasl Asset Management Group are aiming to provide within the free zone.
The strategically located free zone will allow e-commerce companies access to the MENASA region, as well as the highway network in Dubai and the UAE. Dubai CommerCity also provides competitive advantages, including shipping solutions, high-level logistics, and a comprehensive and advanced infrastructure to ensure providing fast and efficient distribution and delivery services, which are considered the backbone of the e-commerce industry.
Advanced complexes to meet the requirements of the sector
The Dubai CommerCity project includes three main complexes that provides an integrated and interactive environment for companies operating within the free zone. The Business Park includes 12 modern office buildings, with a total leasing space of 175,000 sqm. The Park includes indoor and outdoor green landscapes, to encourage a healthy, modern professional lifestyle with a youthful spirit. The Park was built in compliance with LEED standards.
The Logistics Park will include 84 logistics unit, with a total leasing space of 53,000 sqm, provided with the latest technologies to address the needs of logistics providers and customers. The units will be equipped with solar panels to generate clean energy.
The Social Park will include a total leasing space of 5,000 sqm, and will be at the heart of Dubai Commercity, with its galleries, cafes, and fine dining venues, as well as the vital facilities which will necessary for global e-commerce companies seeking to establish a regional presence in Dubai, and enhance the experiences of their employees and customers.
Dubai CommerCity is fully committed to support the nation direction to 25% reduction in carbon footprint by 2030, by adopting the highest international standards in sustainability and green economy. The project is also committed to reduce power consumption by using the latest solar energy technologies and a 40% reduction in water waste by treating drain water and collecting and re-using rain water. The Project aims to reduce pollution by adopting the best international practices, in building light industrial units, using eco-friendly and recycled materials.
Future Growth
Recently, Dubai CommerCity launched MENASA e-commerce landscape report (B2C Products Edition). The report assists global companies and startups in evaluating the opportunities within the regional e-commerce market and highlights the high growth in the MENASA region.
The report estimates that there was $51 billion of e-commerce sales across MENASA in 2017. While this accounts for only 3% of the global e-commerce sales, the regions e-commerce sector is growing aggressively at 24.6% CAGR growth through to 2020. This is faster than any region in the world, as the global projected growth during the same period is at 20.6% with a declining growth trajectory.
According to the report, South Asia represents the biggest market in size, GCC represents the fastest growing and highest spending market in the region. India stands out as the biggest, most mature e-commerce market with $39 billion in estimated e-commerce sales in 2017. The UAE represents the biggest spending per online shoppers at $1,648 with the third highest growth projected through 2020 at 29.6%.
The report, which will be issued annually in Arabic and English, provides a comprehensive and global overview of the e-commerce sector alongside the role of technology and how it will shape this sector over the next 20 years. The report offers a regional view on 22 countries of the opportunities available in this sector, current and future trends, and the expected developments over the next ten years. The report sheds light on factors that have strategic impact on the region’s e-commerce, including free zones and the logistics sector.
The report, which can be downloaded online through DAFZA’s website, represents a road map for international companies, entrepreneurs, and investors and show expectations around future growth levels in light of the initiatives and projects launched. The report reflects investment opportunities and prospects, emphasizing Dubai’s role as a regional center for e-commerce.
The report has identified seven key growth drivers that include: huge latent demand; high internet/ mobile adoption; a young/ internet savvy population; high social media usage; cross-border e-commerce; entrepreneurship and growing government support.
The report presents a global and regional overview of this sector, evaluating its growth and future opportunities, taking future trends into consideration alongside the ongoing technological advancements that promote this growth. It will guide government entities and industry bodies in the region to drive key structural improvements to facilitate e-commerce success for the benefit of the region and other markets.
The report highlights the key challenges that can be attributed to limited e-commerce penetration when compared to the rest of the world. These include a lack of consumer awareness, limited payment solutions / behavior, logistic challenges, customs duties and taxation and limited product coverage.
