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Dropshipping has become an increasingly popular way to sell goods. And the United Arab Emirates (UAE) market is no exception. In this article, we explore the current state of dropshipping in the UAE, the legal aspects, the pros and cons of starting a dropshipping ecommerce business, and introduce some popular dropshipping vendors in the region.
Dropshipping is a model of selling goods straight from the supplier’s warehouse. The retailer, between a supplier and a buyer, controls all ordering and support parts. In contrast, the supplier is only responsible for shipping the goods straight to the buyer when the retailer requests them. All parties of such a flow win: the supplier doesn't have to search for new clients and manage ordering and support, the buyer gets their goods quickly while getting full support from a retailer, while the retailer gets its margin from selling third parties' products without the need to manage warehouse and logistics.
At the beginning of 2022, Internet use in the UAE came to 99% of the whole population. In 2023, almost everyone in UAE uses the Internet. 96% of buyers prefer online shopping (compared to 73% in 2020). The total ecommerce revenue is going to reach US$11,782.3 million by the end of 2023. The number of users grew from 73% to almost 100% in only three years: 73% in 2020, 89% in 2021, 96% in 2022, and almost 100% in 2023, accordingly.
The number of UAE Internet users in 2020-2023
According to the International Trade Administration, eCommerce sales will reach $8 billion in 2025, and dropshipping is one of the most popular models. All these numbers show a promising future for dropshipping in the UAE, which means the model is definitely worth trying.
Like any other country, the UAE has its requirements and legal specifics to consider. Here, we look into some of them and offer the first steps you definitely have to take when deciding to work in the UAE. Besides these mandatory things, there might be some specific requirements depending on the kind of business, the country of origin, and more. This is why consulting with a legal advisory could be a great idea after you have prepared everything mentioned in this article.
Many people wonder: can I do dropshipping in UAE? The answer is definitely yes. You can do dropshipping in the UAE: the government doesn't forbid any business. Instead, the business in UAE is deeply supported by authorities. All you have to do is ensure you have all the proper documentation like visas, passports (all your family included), entrepreneurship papers, etc., and then get a specific license for dropshipping companies.
Having a license to start dropshipping in the UAE is a must. Out of three possible business permission types (commercial, industrial, and professional), you are going to need a commercial trade license.
A general trading license enables you to conduct all the necessary ecommerce activities like import, export, rental, etc. Here is what you need to request a license:
The list of documents required to set up your dropshipping business in the UAE is pretty simple:
The UAE tax policy is pretty flexible. Running a business there doesn’t require any complicated tax math. All you have to care about is VAT (around 5% for online sales) and a 9% corporate tax at the beginning of the financial year (effective as of July 1, 2023).
Usually, businesses choose between launching independently or using dropshipping. Therefore, it is important to clearly understand the pros and cons of this launch model. Here, we outline some advantages and disadvantages from the perspective of both the business and the seller.
When starting to dropship in UAE, you can get a great boost to your business, as the country gives great capabilities:
While dropshipping in the UAE has many advantages, there are also some challenges that businesses may face:
While having to beat off these potential challenges, most businesses find it easy to start dropshipping in UAE. To dive deeper, we have analyzed the whole process and split it into simple steps.
To develop a business idea, identify what is demanded and what you can do with it. Then, research potential niches that align with them validate your idea, develop a business plan, and launch and iterate based on feedback. Here are some ideas on how to choose your perfect niche:
The most popular niche in the UAE is fashion, apparel, and clothes. This niche makes up to 38.7% of the whole ecommerce revenue in the UAE. However, other niches like Electronics & Media or Food look really promising as well.
The list of the most popular products for drop shipping (UAE)
It is important to analyze the niche, determine which products are popular among consumers, identify competitors, and figure out what you can do to achieve success quickly.
Starting with products that have the highest demand will skyrocket your sales from the very beginning. Later, you can move on to selling more niche products.
Try to analyze your competitors' experience, find out the shortcomings, and organize your company's work the way you can outrun your competitors.
Before getting a license and starting your business, analyze your project to ensure everything is ready:
The average dropshipping profit margin is between 15%–20%. However, dropshipping in the UAE provides more opportunities to use it. As the country is located in the middle of many other countries, sometimes margins can be higher if you find a cheaper supplier and sell to the market with a higher buying capacity.
While having your office in the UAE, finding a supplier who can provide the best dropshipping products in UAE exactlu is not obligatory. As a dropshipper, you can select any supplier from around the globe. Here are some ways to find ecommerce suppliers:
Choosing potential suppliers, it is important to research them before partnering. Check their reputation, reviews, and credentials to ensure they are reliable and trustworthy. Below, we will tell you more about some trusted dropshipping suppliers.
Starting your ecommerce business in the UAE doesn’t require many special skills; the flow is, basically, the same as for other countries. Here are some steps to take before your business is set up:
Building your own dropshipping marketplace, mind such regulations as consumer protection laws, data privacy laws, and electronic transaction laws. Besides that, ensure your marketplace will be a convenient place for your future customers to use. We offer three main options on how you can build a marketplace that will bring you benefits:
You can start with a simple website or a small marketplace if you have one already. However, B2B dropshipping business in the UAE can grow rapidly, and you will have to scale: add several more suppliers, sell in more regions, etc.
In this case, you are going to need a flexible ecommerce platform with capabilities to adapt to any changes your business needs. If you are starting a B2B dropshipping business, consider modern API-based platforms like Virto Commerce.
When you use this model, you “rent” a storefront from a bigger ecommerce integrator: for example, use dropshipping in Amazon (UAE), Noon, Souq, and Dubizzle. The marketplace operator provides the platform and infrastructure, while the vendors handle product listings, pricing, and order fulfillment.
This model has become increasingly popular in the UAE as it offers a wide selection of products, competitive prices, and a streamlined shopping experience. Later, we will provide some examples of popular marketplace-based storefronts in the UAE.
Basically, this is a separate space in the social network linked to the main seller account. The buyer clicks the “See the shop” on and finds the list of products with a detailed descriptions and prices. Social media platforms like Instagram and Facebook are popular channels for online shopping in the region, and many businesses are taking advantage of this trend by creating their own social media storefronts. Overall, a social media storefront can be a cost-effective and efficient way to sell products online in the UAE.
Payment acceptance can be integrated directly into the platform on which you sell, or payment gateway providers can be connected directly. Here are some of the most popular payment gateways for the UAE ecommerce platforms:
Payment options mostly depend on the capabilities of the ecommerce platform. For example, Virto Commerce offers a seamless integration with any of the chosen vendors.
To make the process of establishing your dropshipping business in UAE, we have selected the best suppliers (UAE) and examples of dropshipping companies in UAE that can help you make it work in 2024:
AliExpress is an online retail marketplace owned by Alibaba Group that offers a wide range of products at competitive prices, including electronics, clothing, home goods, and more.
Pros:
Cons:
Overall, AliExpress can be suitable for both small and big businesses, depending on their needs and preferences. Small businesses can take advantage of the low startup costs and access to a large customer base, while big businesses can benefit from the wide selection of products and competitive prices.
DHgate is a Chinese e-commerce platform that connects buyers and sellers. It specializes in providing a wide range of products at competitive prices, including electronics, fashion, and home goods.
Pros:
Cons:
Not the best option for businesses that prioritize quick shipping times or require high-quality, authentic products, but is popular as it offers dropshipping options.
The supplier has a large selection of products ranging from electronics, fashion, home and garden, beauty, and toys, among others.
Pros:
Cons:
They offer dropshipping services, which makes them an attractive option for e-commerce businesses.
This is an online retail company that specializes in providing apparel, electronics, home and garden, and more.
Pros:
Cons:
It can be good for small businesses who plan drop shipping in UAE as it offers affordable prices.
Geekbuying is an online electronics retailer that offers products from various categories, such as smartphones, computers, home appliances, audio and video, and gaming.
Pros:
Cons:
Geekbuying can be suitable for both small and big businesses, depending on their needs and budget.
SaleHoo is an online directory of wholesalers, manufacturers, and dropshippers that connects online retailers with product suppliers.
Pros:
Cons:
Particularly popular among small businesses and entrepreneurs who may not have the resources to conduct extensive research and find suppliers on their own.
Provides a directory of certified wholesalers and dropshippers for online retailers. They offer a database of over 16 million products from about 8,000 suppliers.
Pros:
Cons:
It fits all kinds of businesses; however, it can be expensive for the smaller ones.
Megagoods is a US-based dropshipping supplier that provides access to over 2,000,000 products in various categories, including electronics, apparel, home goods, and more.
Pros:
Cons:
Suitable for both small and enterprise-level drop shipping in UAE. However, it makes more sense to use it for international North America – targeted businesses.
Doba is a US-based dropshipping platform that offers over two million products from a variety of industries, including electronics, fashion, home and garden, and sports and recreation.
Pros:
Cons:
Fits all but might be expensive for small businesses.
This is an online B2B (business-to-business) fashion marketplace that provides a platform for retailers and wholesalers to purchase high-end luxury fashion items in bulk at discounted prices. Offers drop shipping in Dubai, United Arab Emirates, and has warehouses in Europe and the United States.
Pros:
Cons:
Fits both small and enterprise-level businesses.
As dropshipping becomes more popular in the UAE and competition remains low, companies looking to tap into this market need to learn more about the regulations, requirements and limitations in order to build their own successful dropshipping business.