Facts

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Facts and Figures:

Internet Service Providers 1

Companies with Internet Access 88 percent

Companies with own Website 60 percent

Companies with E-Commerce Operations 14 percent

Compaines Intending to Begin E-Commerce Operations 42 percent

Companies with no Intentions to Begin E-Commerce Operations 12 percent

E-Commerce Market (1997) $11.5 million*

*This number has grown significantly since 1997.

Potential Problems:

Thus far, the UAE has been quite successful in establishing the necessary infrastructure to allow e-commerce to flourish. However, the ETISALAT monopoly has the potential to hinder growth. The government needs to increase the number of ISPs in order to allow for competition and encourage rapid technologic advancement. Dubai Internet City is considering the applications of two additional ISPs that would operate only in Dubai Internet City. Further information on Dubai Internet City is available in IT Geographics. Furthermore, access speed could become an inhibitor to the growth of e-commerce (28).

Dubai Internet City:

Dubai Internet City (DIC) is the third free trade zone in Dubai. It was established as an area specifically for e-commerce. For a full analysis and explanation of Dubai Internet City and free trade zones please refer to IT Geographics.

Security:

ETISALAT launched Comtrust in mid-January 2000 as a means by which on-line transactions can be completed securely. It uses a digital certification service that is based on predefined authentication and verification criteria. Furthermore, it is supposed to "propel the UAE to the forefront of virtual commerce in the Middle East and Southeast Asia" by being the first end-to-end e-commerce infrastructure in the region. Security is very important to instilling confidence in the system to encourage on-line purchases (28).

Instigators:

The government of the UAE has been the biggest instigator of mainstreaming e-commerce into society. As previously noted, the government financed the entire infrastructure of DIC and has hosted conferences on e-commerce. Academia has also been a staunch supporter. For example, the Higher Colleges of Technology invited applications from faculty in Business and Information Technology to teach Electronic Commerce at the University. The schools are apparently trying to introduce a full-time curriculum into their program offerings.

The new search engine, ARAB VISTA, is also supposed to bolster e-commerce. ARAB VISTA allows Internet searches in Arabic and English, as well as other languages. It operates on a COMPAQ UNIX platform. Although English is a widely understood language in the UAE there is still a large population that does not speak English and has thus far had limited access to the Internet. The rationale behind ARAB VISTA is that it will open up a new subscriber base for UAE Internet services, which means an increased audience for e-commerce (30).

E-Government:

In order to encourage and stimulate the growth of information technology in the UAE many of the individual emirates have established IT-related departments. For example, in Dubai, the Chamber of Commerce set up a department to handle electronic commerce related issues and to encourage the development of on-line business (31).

The UAE government also intends to begin offering basic services over the Internet. Sheikh Khaled bin Zayed bin Saqr Al Nahyan, businessman and Chairman of the Bin Zayed Group, describes the new e-government system as: "Government offices will still remain open to the public, but simple transactions like bill paying, queries and license renewals and applications will ultimately be done from the consumer's home." The government is using the Internet as a means of cutting down on paperwork and lowering labor costs by automating the system. Considering the Emirians are not intimidated by technology or the Internet this will probably be a very successful service (32).

Another interesting development in terms of e-government is the use of e-commerce solutions by the Dubai Ports and Customs. On 27 June 2000, the Dubai Ports and Customs launched E-Mirsal. It is the first e-government, e-commerce solution that allows agents, shippers, transport companies, and other cargo businesses to process customs clearing documents and payments via the Internet. This is just another example of the UAE embracing emerging technologies (33).

Business-to-Business:

On 20 June 2000, a major business-to-business portal was established by the UAE government-Tejari.com. This service is for all business-to-business (B2B) e-commerce transactions in the UAE. It is owned and operated completely by the Government of Dubai and is an Oracle-based system. The Dubai government has said that it intends to make all future purchases through it. Tejari has quickly become the premier digital marketplace in the Middle East.

Tejari is open for service to all businesses and industries globally. It is not limited to only Emirian businessmen. One of the primary attractions to using this system for B2B is that it does not require proprietary hardware or software like many similar programs. In fact, in order to encourage multiple users from multiple disciplines Tejari uses the common Internet standard Hyper Text Transfer Protocol (HTTP). Transactions are encrypted using a 128-bit Secure Sockets Layer. Because of the high level of security Tejari has become very popular in a short amount of time. Exact figures on the number of users and size of market is not available. A small subscriber fee is required to become a member of the Tejari network.

Business-to-Consumer:

By far, the retail sector is the biggest e-commerce user in the UAE. A survey conducted by the Emirates Bank Group in early 2000 revealed that more than 14 percent of companies are conducting business, in some capacity, over the Internet. The same study suggested that almost 42 percent of companies intend to have fully functional e-commerce capability by 2001. Although recent statistics are not available the author believes that the estimates are accurate and that by early next year (2001) somewhere between 30 and 40 percent of companies will have e-commerce capabilities.