With reporting from Chantelle D’mello and Heba Fahmy
Shopping online and receiving packages from Qatar merchants at home is expected to become easier once a new strategy aimed at increasing e-commerce in the nation takes effect.
The policy, announced today, involves permitting private courier companies to compete against state-owned Qatar Post to deliver parcels within the country.
Currently, major companies such as DHL, FedEx and Aramex are permitted to deliver goods to Qatar residents from outside the country, but cannot legally deliver from one Qatar address to another.
This makes it difficult for startups and entrepreneurs in Qatar to reach their customers. Some work around the present restrictions by using private drivers whose primary business in transporting passengers.
Others use Qatar Post, but officials say the services offered by the company are currently unaffordable for some small businesses who do not ship large volumes of merchandise.
Speaking at Qatar’s e-Commerce Forum this morning, Dr. Hessa Al-Jaber – the country’s minister of information and communications technology – said adding more delivery options will help spur more e-commerce businesses:
“We will liberate the postal market and open it to competition,” she said during her speech. She did not mention a timeline for the implementation of the policy.
In addition to providing shoppers and merchants with more professional delivery service options, it’s hoped that opening the courier market up to more competition will also reduce costs.
This is one of the challenges facing some local entrepreneurs, such as Buthaina Al Zaman, the founder of apparel firm Bothayna Designs.
She told Doha News that she often uses private drivers who typically charge QR30 to QR40 for a delivery within Doha. But if one of her customers lives outside the city, the delivery charge can run up to QR70 – almost as much as the cost of the clothing itself.
“That’s a lot to pay,” she said. “A lot of people are complaining about the prices.”
Qatar’s e-commerce consumer market is already valued at US$1.02 billion, some 40 percent of which comes from airline tickets and electronics, according to ictQatar.
The average resident spends $3,453 annually, which is the highest in the MENA region, the ministry added.
However, the government said the sector remains underdeveloped. It added that shopping online is a way to give consumers more flexibility and choice in the marketplace while enabling businesses to more efficiently bring goods to customers.
In addition to the hurdles currently involved in shipping physical goods, ictQatar said it wants to make it easier for consumers to pay for their purchases electronically and wean residents off their preference for in-person payments.
“Most people prefer using cash,” Al-Jaber said. She added that another stumbling block is that there are currently restrictions on using debit cards online.
Two years ago, Qatar Central Bank (QCB) closed a loophole in the country’s online shopping rules by reminding financial institutions that all transactions requires customers to enter a PIN code. This effectively banned the use debit cards for online shopping, but did not affect credit card transactions.
As an alternative, merchants who want to accept online debit card payments can enroll in QCB’s payment gateway, QPAY, which has a feature that allows customers to enter their PIN through an encrypted platform.
However, in its roadmap document, ictQatar said setting up an e-payment system remains a “costly and complex process.”
IctQatar wants new legislation to be introduced to regulate e-payments, with the goal of simplifying regulatory requirements and reducing fees.
Small business ‘gray-market’
There is also recognition that Qatar’s current business registration rules are impractical for many digital entrepreneurs who, for example, lack the formal office space or large financial reserves that are technically required to start a new business.
“Qatar hosts a significant number of ‘gray-market’ e-commerce enterprises that predominately use social media platforms such as Instagram and Pinterest to market their products. These enterprises are typically home-based and do not have a company registration, and thus operate outside the country’s legal, commerce context,” the Qatar National E-Commerce Roadmap 2015 said.
IctQatar did not offer any specific examples of how it would reduce the regulatory burden on e-commerce companies, but an official from Qatar’s Ministry of Economy and Commerce suggested the department is working to reduce paperwork requirements and cut red tape.
Speaking at the forum today, Yahya bin Saeed Al Nuaimi, assistant undersecretary for the MEC’s Commerce Affairs, said it now takes about an hour to register a new business in Qatar.