05 Apr 2017

Distribution & Retail Sector

Authored by: Hadef & Partners, Sector Groups

Distribution & Retail Sector

Commercial Compliance and Consumer Protection Department increases inspections

With Ramadan fast approaching, the UAE authorities’ campaigns to protect consumer rights through ensuring that retail outlets offer food products at reasonable and consistent prices, are likely to pick up pace. The Commercial Compliance and Consumer Protection Division of the Department of Economic Development (CPD) is tasked with conducting field visits to enhance awareness of consumer protection among consumers and merchants alike. During Ramadan, the subject of availability and the pricing of some 5,000 basic food items, such as rice, flour, oil, juice and milk, becomes the hot topic for the CPD. Prices of staple foods are set by the Ministry of Economy for Ramadan, and compliance often requires retailers to drop their prices, sometimes by up to 70%. Past reports have suggested that some outlets have historically failed to drop their prices for these foods, however increased inspections by the CPD are expected in the run up to, and during, Ramadan, to ensure that the expected higher demand for certain consumables is not exploited. Although the Ministry of Economy has not specified the penalty for food prices above those it sets, reports in previous years put potential fines for retailers at up to Dh20,000 for price violations.

Think e-commerce for a piece of a AED36 billion pie

According to Forbes, in 2016 online sales in MENA topped $2 billion, with the UAE among the most booming e-commerce markets. The total value of e-commerce in the UAE is expected to reach $10 billion in 2018.

More and more businesses in the UAE are getting in on the Internet act and taking their businesses online. Regional shoppers are becoming more tuned towards buying online. Click-and-collect is for some big name retailers being seen as another way to win over consumers, but it is perhaps also a gateway to ‘full blown’ online shopping becoming mainstream in the UAE market [see more on this here http://gulfnews.com/business/sectors/retail/click-and-collect-to-make-presence-felt-in-uae-retail-1.1996961]

On the Internet, your 24 hours a day, year round shop is just a click away from prospective customers from all over the world, with your Internet storefront attracting more buyers than you could ever manage with a brick and mortar shop. What’s more, new technologies that include supply chain management, billing, shipping and procurement allow you to take virtually any part of your business online. Any business can enjoy the effects of considerably cutting costs in almost every aspect of its operations, through streamlining these processes through online systems.

To help guide you through the legal considerations for the addition of an online arm to your business, please get in touch with a member of our Corporate or Commercial teams.