The value of e-commerce in the Middle East increased following the governments’ mandated lockdowns and social distancing regulations to prevent the spread of COVID-19. Governments responded to e-commerce trends by making it easier to get licenses. This was done to encourage new enterprises to invest in logistics and other sectors that may help the industry. Nevertheless, stepping into this market looks like riding a rollercoaster as it has its own hindrances.
Challenge: Customs Complexity
Customs charges are made up of duty, which is a tax given to imported products that are generally a proportion of the value. VAT is imposed at the value but includes delivery charges, resulting in a taxable import. Additional charges may apply if the products require inspection, handling, or storage fees, and even X-ray fees if the goods must be properly scrutinized. In the UAE, for example, each Emirate has its own customs compliance, which is overseen by the federal customs administration. This conformity reflects the UAE both within and outside the nation. The seven Emirates of the United Arab Emirates (UAE) include Abu Dhabi, Dubai, Sharjah, Ajman, Umm Al Khaimah, and Fujairah, and each develops, initiates, and regulates its own customs regulations.
> Solution: IOR, Customs Clearance & Documentation Support
Not only does the UAE represent quite sophisticated and complex customs procedures but so does the whole MEA region. Each country, having its own regulations for import, VAT, customs clearance, etc, is most likely to be inaccessible to international markets. Fulfillment Bridge’s local solution redeems this issue as it allocates a workforce of knowledgeable agents to facilitate customs clearance and reduce paperwork for its partners. As such, offering transparent landed costs is a top priority for this 3PL partner to avoid inflicting any hidden additional costs.
Challenge: Meeting Consumer’s Expectations
Maintaining an excellent order lead time is a challenging task when operating in the Middle East
Minding the long distance between continents, one of the pitfalls that e-Commerce merchants fall victim to is their inability to maintain regular and frequent flights to the Middle East, especially at peak seasons or during times of flight shortages, such as COVID times. Consumers on the other hand seem to be more demanding and they require their parcels to be delivered timely.
Lead time is obviously not only air freight but rather a 3-part dilemma, air freight duration, customs clearance duration, and last-mile delivery duration. In the Middle East, customs clearance and last mile are just as important as air freight due to the nature of various customs regulations, lack of standardized delivery address structure, cultural restrictions, and the presence of some remote areas, especially in Egypt and Saudi Arabia.
> Solution 1: Choosing a 3PL that Offers Recurrent International B2C Flights and guarantees Parcel Insurance
As part of the roadmap it has set for 2022, Fulfillment Bridge has allocated direct and special full-mile lines from China and Hong Kong to Middle Eastern countries. It has regular flights from these Asian countries to UAE, KSA, Egypt, Bahrain, Kuwait, Qatar, and Morocco. Backboned by an optimal lead time that takes up to 7 days only, this solution enables international e-sellers to maximize their reach, increase profitability, and leverage their businesses by targeting such e-commerce hubs. To ensure last-mile delivery in these countries, Fulfillment Bridge partnered with key stakeholders whose expertise plays a major role in maintaining customer satisfaction.
Not only does Fulfillment Bridge support different categories of e-commerce merchandise (clothing, cosmetics, furniture) but so does it maintain regular flights for battery and non-battery products. This way, Chinese e-sellers are able to revolutionize e-commerce in the Middle East. The cherry on the top is that Fulfillment Bridge offers a free pick-up from suppliers in the Guangdong area as a measure to help these businesses thrive and reduce shipping costs.
To thrive in the Middle East, you must have a thorough awareness of the language, culture, customs, and proper etiquette. Religion pervades many aspects of Arab life. The line between the professional and personal spheres is rather blurred, so you must be aware of Muslims’ everyday activities. Middle Eastern consumers find more ease communicating in Arabic, rather than English. Besides, gender roles are delicate, which explains why correct etiquette must be maintained to avoid disrespect and offense.
Following up on the status of parcels is a very crucial step within supply chain management. Your 3PL partner is the stakeholder to handle this phase as it is an undetachable player in the process. Fulfillment Bridge’s consumer success teams encompass a group of multilingual agents with a deep local understanding of the Middle Eastern market construed throughout their on-field experiences. As they use multi-channel communications to be able to hover between the increasing demands of consumers, Fulfillment Bridge offers a 24/24H and 7/7J client service to answer consumers’ inquiries in the best way possible. Their deep understanding of the Middle Eastern culture and Arabic language is an asset to managing your consumer services there.
Due to the vastness of the territory and the density of requests from certain zones, dividing areas among delivery executives is a time-consuming process. Furthermore, in order to be effective in last-mile logistics in the Middle East, one must not only know the routes but also comprehend people’s everyday lives. Businesses in the Kingdom of Saudi Arabia, for example, are totally closed during Salat. As a result, it is only practical not to schedule any transactions during those hours.
To top it all off, the Middle Eastern address system is known for its unpredictability owing to the lack of a universal addressing system, which has a direct influence on delivery rates. In Dubai, for instance, there are no street addresses for residential or business premises; instead, P.O boxes are used as references. This presents a significant hindrance for any e-commerce attempting to distribute items as it renders the use of GPS for product delivery obsolete, which is why only a few courier firms are successful in the region.
> Solution: Maximized Coverage of Urban and Remote Areas
The Middle Eastern territory is known for its complex geography especially since it encompasses Saharian areas. In fact, there are city-based areas, suburban, rural and even areas considered remote, categorized as isolated or unreachable zones. Having this in mind, Fulfillment Bridge’s last-mile delivery service in the region has always maintained a high level of delivery rate by being able to put into action its regional expertise and access cut-off areas. To avoid any misunderstandings in terms of addresses, this 3PL partner opts for one of the smartest geocoding engines that translates the most baffling addresses to precise geographical localization, making last-mile deliveries a smooth process that will never let customers and consumers down.
Challenge: High Rate of Returns
According to research, up to 30% of online orders done through e-commerce merchants are returned. Customers do expect to be able to return and receive a refund for their goods, which presents a dilemma for e-commerce businesses. As a result, there is an urgent need to focus on strengthening reverse logistics channels, handling returned inventory at fulfillment centers(s)/warehouses, providing quick replacements, and so on, as these are the essentials that e-commerce firms cannot exist without.
> Solution: Integrate Both Forward & Reverse Logistics
While facing rising demand and handling a stretched staff, your 3PL platform should ideally assist you in managing both deliveries and returns under one single web portal. A dispatch overview will help you visualize plans on screen and change them to achieve guaranteed KPIs. As a matter of fact, Fulfillment Bridge has a state-of-art fulfillment solution on a cloud-based software architecture that provides the highest level of flexibility, integration, and security to help you manage your orders and returns.
Fulfillment Bridge: Your Pillar to Succeed in the Middle East
The Middle Eastern market is a large blue ocean, in which merchants go through ebbs and flows which explains why the presence of a reliable 3PL like Fulfillment Bridge is so crucial. In a market wherein e-commerce players are reigning over the region, early starters need to spot their flaws and provide solutions or services that fill these gaps. Fulfillment Bridge, in a similar context, helps e-sellers with leveraging on their games and disruptively grow in the Middle East.
