In alignment with Dubai’s ecommerce strategy objectives aiming to position the emirate as a global logistics hub for cross-border e-commerce operations, Dubai Customs has signed cooperation framework agreements on the sidelines of Gitex Technology Week with Dubai Airport Freezone (DAFZA), Dubai CommerCity, and Dubai South to leverage their e-commerce capabilities and boost the growth of this business sector in Dubai. Under these agreements, the partner entities will be able to use and integrate various Dubai Customs services and benefits available on its cross border e commerce platform.
The Dubai Customs’ recently launched Cross-Border E-Commerce Platform uses blockchain technology to integrate and automate operations between customs, free zones, logistics, and courier companies. It is the first of its kind in the region, and aims to help the emirate become a global hub for e commerce, and encourage e commerce companies to set up business operations in Dubai.
The government’s plan is to raise Dubai based companies’ domestic and regional distribution share of e commerce trade in the emirate to about AED24 billion by 2022, through a 20% reduction in e commerce operational costs. The platform services will help reduce expenses and increase returns on e-commerce investment. E-commerce is expected to contribute AED12 billion to the emirate’s GDP by 2023.
The two agreements were signed from Dubai Customs by Abdullah Al Khaja, Executive Director of Customer Management Division, and Amna Rashid Lootah, DAFZA’s Assistant Director General, and Mohsen Ahmed, CEO of Dubai South Logistics District.
Commenting on the cooperation agreement, HE Ahmed Mahboob Musabih, CEO of Ports, Customs and Free Zone Corporation, Director General of Dubai Customs, said: “We are very happy to join forces with Dubai South in our efforts to transform Dubai into a global e-commerce hub, capitalizing on the sector’s growth momentum following the spread of the Covid-19 pandemic – the crisis that saw e-commerce sales jumping globally by around 20% in first half of 2020, with a 4% rise in average e-commerce spending per online shopper per visit.
Dubai Customs continues transforming its services providing smart platforms that help drive a thriving online business in the UAE. The country has kept pace with the booming global e-commerce industry, marking a remarkable increase in e-commerce sales from USD5 billion in 2015 to USD19.7 billion in 2020. The volume is expected to reach about USD27 billion (AED100 billion) in 2022.”
The E-Commerce Platform is one of Dubai Customs’ innovative projects highlighted at Expo 2020 as we look forward to onboard more and more business partners into the platform, including key free zones, logistics and e-commerce players to maximize their benefits from the customs services and facilities offered by the platform, explained Musabih. This will help e-commerce companies in Dubai to easily access global markets, and hence consolidate Dubai’s position as a global hub for trade and business.
HE Dr. Mohammed Al Zarooni, Director General of Dubai Airport Free Zone, said: "Through this agreement with Dubai Customs, we continue to develop the comprehensive ecosystem of logistics solutions, facilities and world-class services that we provide to e-commerce companies based in Dubai Airport Freezone and Dubai CommerCity, in order to strengthen the emirate’s status as a regional and global hub for e-commerce, and a catalyst for the growth of this industry locally and regionally. This agreement comes at a crucial time as the MENA’s e-commerce market value is projected to exceed USD50 billion by 2022, which opens up many opportunities for companies operating in this sector for more growth and expansion. These businesses are therefore looking for an ideal system that would enable them to make best use of such growth by having access to customs services, facilities and procedures capable of helping them meet that goal.”
He added: "We are witnessing an increasing number of companies that seek to take advantage of the system that we provide, especially within Dubai CommerCity, which is the first dedicated e-commerce free zone in the Middle East, Africa and South Asia and a joint venture between Dubai Airport Free Zone and Wasl Properties. It primarily aims to support sustainable growth and economic diversification through e-commerce development by providing a range of exceptional services and facilities and sophisticated infrastructure. Simplified and smooth customs procedures in cooperation with our partners in Dubai Customs are among the main competitive advantages that the free zone provides to its customers and businesses of all sizes and backgrounds. This agreement adds a new dimension to these advantages and benefits by offering exceptional 'cross-border e-commerce platform' services to the free zone's service portfolio.”
For his part, HE Khalifa Al Zaffin, Executive Chairman, Dubai Aviation City Corporation and Dubai South, said: “We are happy with the cooperative relationship that links us to Dubai Customs. With this agreement we will work towards translating Dubai’s e-commerce strategy. This will benefit the existing investors in EZ Dubai at Dubai South by enhancing our capabilities to provide them with exemplary services. The agreement will also help us attract more new investors from businesses looking to have presence in Dubai, so that they can effectively serve their markets and customers throughout the region.”
He further noted: "The new cooperation relationship reflects our commitment to the directives of our leadership, specifically with respect to strengthening continuous coordination between various local entities in the emirate to provide the finest services to customers, so that we all contribute to promoting Dubai’s bright image globally as one of the best destinations for investment, work and living, and consolidating its stature as a world-class e-commerce platform.”
The partners in the signed cooperation agreements seek to attract more investment and economic growth opportunities to the emirate of Dubai by encouraging e-commerce players to have distribution facilities in Dubai free zones as suitable areas to set up e-commerce business and increasing the competitiveness of the free zones by reducing the cost of doing business for e-commerce and logistics companies that operate in free zones, as well as implementing integrated and uniform Gate-pass process to facilitate faster goods movement through the free zones’ gates.