Webinar Transcription Felipe Cusnir (CITC): Hello, everyone. Good morning, good afternoon, or good evening, depending on the part of the world that you’re at. Felipe Cusnir here with the California International Trade Center (www.cainternationaltrade.org) Really happy and excited with the conversation that we’re going to have today about the conversations from the field. What is happening in the United Arab Emirates and in the Middle East and North Africa region. We have a panel with three very good speakers, they’re experts in what they do and we’re going to be discussing a lot about what is the current economic outlook for the region, but we’re also going to touch upon in more detail what is happening with the supply chain, what is happening with the consumer behavior, what are the market trends, and with the focus on ecommerce because again, the goal here is really to showcase not only the opportunities to doing business with the UAE, but how can that trickle up to being an opportunity to do business with the entire region and how well positioned not only the UAE is but how positioned our partners here are to actually help companies get access to that market. So, thank you again everyone for joining. If you have questions, please use the Q&A, the questions tab on your control panel and we will reserve some time at the end of the panel, or the end of the webinar to address those questions. The agenda is fairly simple, we’re going to have Mr. Mohsen Ahmad, who is the CEO of the Dubai South Logistics District providing his remarks. Then we’re going to turn it over to Ben McLean who is head of key accounts for sales and ecommerce for DHL Express UAE. And then we’re going to have Ritesh Tilani share his thoughts and experience also not only as a venture capital but also as an owner and founder of a number of different ecommerce platforms and marketplaces. So again, we have a very robust panel to go through today. You’re not here to listen from me, but I really do want to thank you for joining us this morning, afternoon or evening and without further ado, I just want to say I’m very thankful and very happy to have everyone here with us today, and I really look forward to this conversation. With that I’d like to turn it over to Mohsen Ahmad, CEO of Dubai South Logistics District for his remarks. Thank you, Mohsen. Mohsen Ahmad (Dubai South Logistics District): Thank you Felipe, thank you. Good evening everybody or good morning, whichever part of the world. Sorry. This is my first time doing such a webinar so apologies if there’s any sort of my side. I hope everybody’s keeping safe wherever you are and hope you and your families are well taken care of. I’m just going to basically; I think going and reiterating on one of the things that you mentioned about the ecommerce in our region. I’m just going to elaborate reasons of things that are happening in the region here in the Middle East for folks in North America to have an understanding of what’s happening here and things that we’ve been doing. And I would like to thank Felipe for CITC for giving us this opportunity to present. If you allow, I will share my screen and put up the slide. All right. Okay, you did introduce me as the Dubai South, I’m mainly EZDubai, which is a sort of a hub where we are specializing in to our ecommerce as a platform that we have invested, or created at Dubai South. Just to give you a sort of broader view of the Middle East, I think when you look at ecommerce, the three countries that stand out in the region is UAE (United Arab Emirates), Saudi Arabia and Egypt when it comes to Middle East and North Africa, and the reason obviously because, in particularly Saudi Arabia and the UAE, the GDP per capita is obviously quite high. Egypt is not as high as them but I think Egypt, their population covers up for that number as opposed to their GDP per capita. I think what has happened right now with even Saudi Arabia has seen a sort of ease of doing business. They have jumped quite a lot over the last, just in a matter of couple of years. They jumped 72 points. They are there right now. UAE is still the leader in the region, and then when you look at logistics, still UAE is a lot further than Saudi and Egypt because that I think comes later with the infrastructure. But overall, it’s quite a dynamic thing, what things are happening here in the region. The Middle East Market If we come to the region and particularly about ecommerce, I think in the Middle East, unfortunately the penetration is not good, you’re looking at close to 3% penetration between the Middle East and North Africa. And again, the three countries that are leading, UAE’s the leader there with 4.3%. But comparing that to more developed countries such as U.S. or Europe or even China, you’re looking at about 10% to 15% penetration, which is quite high and that just shows the amount of opportunities that is available here today. I think with today, more and more people are experiencing, which I will elaborate later on in terms of how this could be, with the COVID-19 and everything, but the top reason why now, of course in the Middle East when consumers prefer to shop online obviously, they are very savvy in terms of the price. For 40% they look up the door price, and I think the competition that we see now between international players and regional players, that’s helping quite a lot. Product selection, that’s improving. I’ll cover on that later. And of course, the convenient that we all have. Then when you look at, even though this figure is about UAE 5 sector, you can see quite a lot of focus has gone into the ecommerce side of this sector, being in airlines, professional services. And the government is pushing a lot more. I mean you [silent] paperless government sector by the end of 2021. And that just gives us a lot of push that everything has to be digitized. So, something with this COVID-19, working at home. It helped us out actually to test that system, but I think where we’re still quite a challenge is the payment gateways when it comes, a lot of cash on delivery, where people still believe in cash, but I think that’s some of the behavior with the younger generation coming soon. But one of the challenges we are facing with still quite a large number of the goods that are being consumed or sort of bought coming from abroad, either it does in the region distribution or coming from various locations, and that tends to slow down the delivery that people have. If I go in the sort of a different, again with the Internet, the zone is very good when it comes to Internet penetration, both again, UAE and KSA have a very good percentage. Egypt still could catch up on that. But similarly, with smartphones, and social media penetrations are quite high when it comes to the region. The consumers here tend to research quite a lot about what they want to buy, what sort of products, they do quite review, and they do quite a large extensive research to understand the product. I covered earlier about product ranges, we’re still quite not there. I mean in North America you witnessed a huge number of SKEs when it comes to product. In the Middle East we’re still quite low, but proving the people like Amazon coming into the region, that has improved. Per basket is one of the highest globally, which again goes back to the GDP per capita, but I think where the opportunity lies in the region, the growth is quite steep, and that growth is becoming more and more as we proceed. I mean, especially with the current circumstances where people have experienced a lot more. I wanted to share some of the headlines of newspapers around what’s going on here and their various different stories. I mean, these are an extract of what has happened just in the last month, where the Uber, Careem is a company that was recently bought by Uber. They’re using their vehicles as a delivery service. Then we have Mumzworld, which is another local player and specifically on kids, they had 800% growth for baby product. This is for 0 to teenager as per the CEO. At the same time, you’ve got quite a lot of investments, whereas another grocery store, Nana, out of Saudi Arabia, just raised Series B for its online grocery marketplace just a month ago. And when you look at government also playing a role, Dubai government’s economics department recently managed to build a partnership between a retail outlet Carrefour, the supermarket outlet, and Aramex which is the courier, and also with the Dubai Taxi to do the last month delivery because of the backlog of all the huge deliveries. Further, you look at areas like Libya, which is traditionally a war zone, ecommerce has come to the rescue in there. And if we talk about Saudi Arabia, BinDawood, which is one of the largest retailers there, they had quite a large number there. Their app download was 400% during COVID-19, which gives it, how people’s behavior is changing. And of course, DP World, which many of you are aware, they have gone into launching an online platform at this moment to help the clients both from sourcing things for their logistics. That’s just again a UAE overview. Sorry, maybe my focus has been mainly there because that’s where most of the stuff that’s happening. These are the growth that were year on year and they are quite a lot. And I think these numbers could be going more with the current circumstances. I think where the channel opportunity is the shop, so when you come to the shop, or a lot of young generations, they’re quite digital savvy when it comes to that, and they are coming into the market, and I think I mentioned earlier about the payment, maybe people are relying on cash on delivery, but companies are coming up, adapting new payment methods like Apple Pay, WeChat pay, I mean we still don’t have WhatsApp pay in the region, but more and more payment gateways are coming in and that would definitely help. And most of the retailers are now also catching up, creating their only channels of ecommerce versus traditional retail. I think the people who jumped the curb earlier are being able to sell some of the products of this current circumstance that we are all in. UAE Ecommerce Top Trends in 2020 I just wanted to share the top 9 trends of UAE ecommerce in 2020. Of course, payment options, we talked about, that there is quite an expansion. UAE created a pass, which identification, even digital signatories, that’s legally acceptable. That’s coming on board. Then we’re looking at store behavior, how you behave in the real, physical domain and how do you convert over to the digital domain. I think Ben will cover up quite a lot on the shipping areas of the distribution. I’ll leave that one to Ben. But I mentioned earlier, a lot of young generations are coming on board. It’s quite also a lot of loyalty rewards that those will become because it’s quite diverse, the markets becoming, it could get very confusing, and also loyalty rewards would streamline. And then the last two, brands will, I’ve spoken about that the brands will be using more than just the Facebook and the Google time. They will use other means of going in there. And I think nine is more of a futuristic, delivering in car or garage. People talk about delivering it to your house, but I don’t know if maybe they should be wearing their masks and gloves since it is a high sell these days. This is a quick view of where I’m coming from. EZ Dubai is a project. It will enlarge development in Dubai at the moment, infrastructure. That’s where the future airport is getting developed. EZ Dubai is a dedicated zone, specifically the ecommerce players. We’re looking at purpose-built ecommerce cluster, multimodal logistics hub and looking at that sustainability. Roughly the project is about a million square meters. So that’s 10 million square feet roughly of development. The unique thing about this is that it is taking care of all aspects of the last mile, the DHL Express community, big e-fulfillment center and the repair and return aspect of it. And the key difference between this area and the rest of the areas in Dubai, that you can combine between a bonded reason and a public non-bonded area within one facility. And thanks to Dubai Customs, their regulation that help us out with this. That’s just an overview of the real, of course. These are some of the people that are already part of that community: Amazon, Aramex, DHL, Namshi, SharafDG, Noon, Firstcry. Thanks to them and of course the cooperation we had with the team, we have managed to, where we are. I’ll leave more for the discussions later. But that’s about it from my side, but I look forward to your questions going forward. Felipe Cusnir (CITC): Excellent. Excellent. Thank you so much Mohsen. This is great, and we certainly do have a few items that we’re going to leave for the discussion later on, but this is really helpful. And congratulations for the EZ Dubai initiative, because of course as the UAE being a historic trading hub, of course, migrating that trade hub to become an ecommerce hub as well makes a lot of sense. So, congratulations for that. We’ll turn it over to Ben McLean with DHL Express UAE. Ben, again, you can feel free to also piggyback on some of the comments that Mohsen shared to add to the discussion, but of course, we look forward to hearing from you and your experience developing the ecommerce market in the region for the past couple of years. Ben McLean (DHL Express UAE): Yes, certainly. Thanks, Felipe, for the opportunity and CITC as well for having me. Mohsen, I feel like a comedian that’s going second, you told all my jokes. So, I’ll try and do my best, and don’t tell them what you said, but at least we’re aligned. That’s the most important thing, and I read the Visa report as well. So, look, I think it’s a good place to start. Maybe give you a bit of an overview about the Middle East and how we’re tracking. So, if you look in 2019, again with the fastest-growing region globally. We recorded 22% growth for ecommerce trade which was fantastic. You compare that to North America, it was around 14.9%, so a little bit higher. But what we’re seeing is sustainable growth year on year, working as Mohsen said on a very small base, which, currently if you look at online sales is only around 2% for the Middle East itself. We will look at more mature markets like the UAEs around 4% and Saudi around 3%. So, that presents a tremendous opportunity for the sellers and retailers of the Middle East, but also for international organizations that would like to sell here as well and SMEs. Middle East eCommerce Market If I look at, in terms of the typical consumer, just give you a bit of an idea, just touch what Mohsen mentioned, they’re very tech-savvy, they are digitally natives. I mean, they’ve been online for a long time. We typically are experts. So, if you look across the, especially GCC (Gulf Cooperation Council, www.gcc-sg.org) in particular, it’s a very multicultural environment, so you’ve got a number of different nationalities there, and in terms of the age range, there’s a very high proportion that are younger than me. So, not that old. In terms of just the region itself, just to give you a bit of confidence, from an investment standpoint, the VCs, the mood is very good, and you can see that it’s been a lot of homegrown organizations that have done well. So we touched on Amazon buying Souq (www.souq.com), which was a local hero marketplace. Uber buying Careem, which we spoke about. So, from that perspective we’re seeing a lot of really good businesses grow, which we’re very proud of, from the region. And I think if you look at the governments from also the UAE, Saudi, and Oman, they’re fueling the growth of SMEs, so they’re very innovative and very forward-thinking and they listen to the people of the country, and they act, more importantly. And I can say in terms of the infrastructure, you’ve got the free zone, such as, we mentioned Dubai South and others, and they’re really trying to push Dubai into being this global hub for ecommerce. So that all really bodes well for us, and typically the free zones have been a sort of setup for B2B, as Mohsen was saying, but now we’re seeing that they’re catering for ecommerce as well. And I think if you look at Dubai geographically and the area that we can serve, it’s incredibly well placed, it connects East from West, and if you look in terms of proximity, you can get to a huge percentage of the global population in a very short period of time which is really important for a cross-border ecommerce. The trade conditions, in particular in GCC, are very good. So, in terms of from an ecommerce perspective, if you’re a seller trying to connect to a buyer the de minimis values are reasonably high so you’ve got a thousand dirham locally, which is around US$270. The same is reflected in Saudi. When you see a basket value, typically cross borders are about US$150. It gives you an idea that from a clearance perspective, that works particularly well. We’re very fortunate in the region to have three very large national airlines, three of the biggest, and I would say probably the best globally. Two of those reside here in the UAE. So, from the connectivity perspective for ecommerce, having the infrastructure backed up with world-class airlines is obviously very important and obviously helps you to be able to get to markets very quickly. In terms of from a Marketplace perspective, I mean that’s normally a good indication of the size of the market, and we’ve got two very large ones here as I mentioned. Amazon entered the market a couple of years back buying Souq and we’ve got also Noon, which is a local hero, which is backed up by the Public Investment Company of Saudi, and they’re doing particularly well, and I can see under the stewardship of his Excellence Mohamed Alabbar, he’s building a nice portfolio of businesses for Marketplace. He’s also got Namshi (www.namshi.com) as well, which is a fashion Marketplace as well to name a few. And they’ve also started to invest into companies like Net-a-Porter, who they’ve brought into the Middle East as well. So, there’s a nice make up there and we’re starting to see a lot more experience, a lot more interest from global brands coming into the Middle East. So, in terms of what we’re seeing with that 98% of retail, with the COVID situation, now domestically we’re seeing a void. So, a lot of these customers are now starting to purchase online for the first time, which in some of the smaller countries around the Middle East is fairly new. But the more mature countries, we can see online penetration is very good, but they’re starting to repeat buying more. So, we’re starting to see that they’re buying maybe different commodities or different categories than they would have historically. And I’ll give you a scenario, just for, you know, the people listening in the U.S. Today there’s a big interest in products and brands that are sold from the U.S., and there’s a lot of organizations, you touched and one for example, Mohsen, earlier, which is Aramex (www.aramex.com), who have built solutions around providing products that are not available in the UAE to customers of the Middle East, and how they’ve done that is by providing a location in U.S. So effectively you can go on and buy from that site. If they don’t ship to the Middle East, they will then send it to a central location, it gets fulfilled and then it gets shipped to you. So, DHL will do this. We have a solution called eShop. We do it in Africa which works particularly well where these brands are not available. So, it enables the consumer to be able to go on and make a purchase where they couldn’t normally, and that works particularly well. So, I think this is a really good opportunity, especially with COVID now, and that service not really holding up at the moment. It’s a really good opportunity for the sellers of the U.S. to be able to really focus on the Middle East, especially when we see the tremendous growth rates that I spoke about earlier. UAE Internet Penetration Coming up on things that I want to just sort of touch on to give you an idea about the Middle East and why I think it’s prime for international sellers to really target. If you look at the UAE, in terms of Internet penetration it’s around 90%, Saudi’s just under 74%, and Kuwait is a staggering 98%. So, from a connectivity perspective we’re very well stocked there. Specifically, people are using smartphones, so it’s mobile commerce rather than desktop. And we see the spends, as Mohsen touched on, are pretty high. So, U.S., in U.S. Dollars UAE would be just under US$2,000 per annum with a typical basket value of around a US$150, which is just approximately, just under double what the global average is for mature markets. So from an investment point of view, if you’re going to try and attract a customer, retain a customer, then winning those in the Middle East for any of these sellers who don’t sell here today, it’s very lucrative if you can attract them and retain them because that basket value is considerably higher. In terms of people repeat buying what they purchased online, UAE is around 73%, Saudi’s 50% and Kuwait’s around 36%, so Kuwait’s a little bit lower. But what we find is typically around the luxury segment, Kuwait and Saudi, the basket values are very high in comparison to other parts of the market globally. So, it’s a very attractive place to sell if you’re in that luxury segment. Ecommerce Platforms and Consumer Habits The other thing I really wanted to just touch on as well, which I think is really relevant at this moment in time, is we’re coming into the holy month now, next month, in terms of Ramadan, we start to see consumer habits changing. So if I look typically, statistically last year, we see that online sales will increase by around 35%, mobile commerce in terms of purchases will be in the mid-40s, and if you look at Facebook, which happens to be the social platform of choice, we see an increase of around 14%. Now, we’re on lockdown at the moment like many parts of the world. So, I suspect that, from an ecommerce perspective, those numbers will be a lot bigger this year. If I look at, from Facebook in terms of penetration, UAE’s at around 82%, Saudi’s around 48% and Kuwait’s 67%. So, that’s a really good opportunity for global sellers to be able to talk and connect to their potential customers through social platforms. We see Twitter and Instagram used quite a lot as well. And what we find here, even though the percentage of sales online is still relatively small, the customer journey starts online. Before they make that purchase and go and buy the product, around 50% of them will do their research online. So that’s a really good opportunity to be able to attract that customer to make a purchase before they go to a store. I think in the Middle East, and I think everyone who is on here who’s been to Dubai or has lived in Dubai or anywhere else in the Middle East will testify that we have a mall culture. Everything we do is centered around the mall where everybody’s going to eat, socialize, and where everyone’s going to shop. So, it’s really part of our DNA. But that being said, that still coexists in terms of ecommerce, and I think that’s a whole omni-channel experience that’s really being developed. And what we’re seeing today with a lot of the global brands who are here, they work through distributors. So, as we’ve seen these trends change, they’re having to go online and that’s a little bit more complicated because they’re not necessarily individual brands, they’re part of bigger groups or bigger families who are their local sponsors. So that journey is taking a bit longer, but it’s happened rapidly. And I think the quicker that happens the better ecosystem we’re going to have for the customers, and I think that will help in terms of having local ecommerce here. But this development is happening, it creates a very good opportunity for cross-border from other countries and in particular the U.S. So today, if I look at Saudi, UAE in particular, in terms of the online transaction it’s about 60% of people are making that transaction when they go online and they start that journey. They’re doing their research and they will make that transaction as they feel confident. The big challenge that we see here, which is a little bit different from most mature markets, a little bit similar to maybe sort of Southeast Asia, is that even though credit cards have been around for 50, 60 years, still over 60% of the consumers are still paying on cash on delivery. Now from DHS’s perspective, most of our cross borders coming in from other markets like the U.S. and Europe and we only offer a prepaid option, so we’re not really impacted by that. But what we do see is within the region or inter region, cash on delivery is still the option, the main option for the consumer. Now, you can see it as a challenge or an opportunity, I like to see it as an opportunity, and the reasons I say is because, especially now with post-COVID or in the middle of COVID, we’re seeing that a lot of the big e-retailers are disabling COD. So, it’s not there as a choice any longer. We can see the government here has got a very clear strategy in terms of going paperless. We’re seeing the same in Saudi now under the stewardship of CITC (Communication and Information Technology Commission, www.citic.gov.sa) So it’s sort of forcing consumers to change the way that they buy, and I think that will create a better ecosystem and that’s really what the long-term aim is for us, to be able to educate and help the sellers, and more importantly the buyers to realize there are other options available. So, I think in terms of trends, I think we will see the e-wallet really emerge. I think Noon is leading that in Saudi, and we see the same Careem. So, I think that will become more popular. Something I’m really interested in, very excited about, we’re starting to see postpaid solutions as well. So, I think in the U.S. it’s Affirm (www.affirm.com), I know we’ve got Afterpay in Australia, Klarna (www.klarna.com) in Europe, and I think they’ve also entered in the U.S. So, there’s some local heroes here. Tabby is the really interesting one, who are entering into the markets or for postpaid solution, which I think is really nice. And if anyone’s not familiar with what that basically means is, from a merchant’s perspective, they get paid from the let’s say Tabby, when someone goes online and makes the purchase. So now that debt or credit is being controlled by the middleman, this case it would be from Tabby or Klarna, then effectively they give a credit line to the end consumer, which typically could be, let’s say 14 days. So, from the consumer perspective they’ve got a lot more choice in terms of when they pay and how they pay. And they can pay debit, credit card, bank transfer, kiosks payment. So, they’ve got a number of different options. So, I think that’s really exciting. The other thing which we’re starting to see in the region which will encourage that transformation, is moving to OTP (One Time Password.) So effectively receiving a text and being able to verify that instantly. And I think that plays a really important part. So whichever partner you decide to work with, I would suggest you test it because that transaction could happen anything in terms of real time to maybe 10 seconds. And if it’s too long, you could potentially lose the customer, which is a bit of a challenge. I think in terms of the reasons why we customers go on and buy online, in particular cross border, is because typically what we see is lower prices, and I’ll give you a scenario about that in a second, and also product selection, which Mohsen touched on. So, it’s my son’s birthday, he’s going to be 6 in a couple weeks’ time, and he’s mad on Hot Wheels, and I wanted to find him something that he really likes and we couldn’t find a product here in the UAE. So, we went to the U.S., we made the purchase, it was actually a lot cheaper and we had a wider range to buy. So, from my perspective, being a consumer, I can see being able to tap into other markets and be able to have a wider product range in some cases depends on the conversion of currency rate, having a lower price as well. But I think the main one which we’re starting to see change is in convenience. If you look at UAE today as Mohsen was touching on, you can go and get fuel delivered and put it into your car, you can ring a supermarket and get a delivery at one o’clock in the morning. I’ve got pretty much every single restaurant available to me on an app. So, from a convenience perspective, we’re leading the world. But I think from a delivery perspective on products, we’ve got a little bit of a ways to catch up. So, I think from a convenience point of view we’re very spoiled, but we’re very fortunate in terms of how that sort of set up here, and I expect the same to happen in the delivery world. So, people like DHL are obviously adapting to those changes. Now interesting statistic, 90% of transactions actually happen cross border into the Middle East, whether that’s coming into GCC or into the Middle East. And so, what that tells me today is really when you look at ecommerce, really, it’s global, it’s virtual, so anyone can sail to anywhere anytime and can connect. So I think that creates a very good opportunity when I summarize what I spoke about earlier, the fact that you’ve got a very digital savvy consumer who has got high disposable income, who is looking for products online that are not necessarily available to them today because they’re not able to purchase them from other markets, for example the U.S., and they want to make a purchase, they want to buy. So that creates a high demand for cross-border. Main Categories In terms of the categories that we are seeing today, we’re seeing there’s around four main categories, which is made up of electronics, fashion, beauty and groceries. What we’re now seeing is they’re starting to change. When you look underneath there’s a lot of categories that have gone up and a lot of products and categories that are going down based on COVID-19. So I don’t want to share any bad news in case anyone works in those businesses or owns any businesses who sells those commodities, but I think it’s really important that you do your research, especially if you’re one of the ones impacted, just so you can expand it to new markets, so you can increase your customer base. The last thing I want to touch on around that is just on cross-border. So, I was reading statistics the other day that there’s around normally on any one given day about 260,000 aircrafts up in the air, and since COVID-19 they’re operating now around 80,000 aircrafts. So, I think it’s really important that when you decide, especially if you’re doing cross border ecommerce, that you select the right partner. So, from our point of view at DHL, we’ve invested around US$300 million in terms of infrastructure and around the GCC over the last several years. And the reason we’ve done that is because we want to make sure that we’ve got world-class operations on the ground. And we are operating as DHL, so we’re not subcontracting. It’s DHL throughout the complete supply chain, and we run a full aviation network here across the region. So, typically we have, for the people listening in the U.S. if you’re selling into the Middle East, we would pick up on day zero, connect you on day one and have your order delivered into GCC on day two, and going up to live on day three and into the factory from 3 to 4. So, from a connectivity perspective and service it works very well. So, if you’re not providing those services today, I suggest you enable it, and if you’re able to converse with the local customer in Arabic or be able to sell in the local currency that would increase your conversion ratio as well. Last couple of points for me. I just think they are relevant to share, which is around ecommerce, which I think from the consumer perspective. So, I mentioned it takes two days to get from the U.S. into the Middle East. Statistically now our customers are telling us that two days is not fast enough. So, 50% of the customers do not believe two days is fast. So, if you think about it, we’re delivering that in two days, which is world class and already they want that quicker, and that’s why we’re seeing organization starting to move their inventory into the GCC to be able to supply to new customers. And I think this is where the free zones like Dubai South and others are being developed. The payment side of it, I think is really important that you display the true value of what the customer’s going to pay whether it’s the product value, the freight value and also local taxes and duties. I touched on earlier that it’s very easy to do business here. It’s typically 5% freight value for duty and 5% for VAT. So, it’s very straightforward and easy to calculate. In terms of what I would suggest you do, if you’re setting up your business for the first time or you look into shift to the GCC, I would make sure that you’ve you make the consumer aware that you ship to that country, so when they’re willing on going into your site for the first time make sure you let them know which service provider you are using and let them know which country are your shipping to. And I think that’s it really for my ends. And all I would say is just, living in the Middle East for the last 13 years, it’s a great place to live. I think it’s really in the DNA of the people here to be entrepreneurial and they like to trade at heart. So, from that perspective, it’s a great place to do business if you decide to set up your business here. Felipe Cusnir (CITC): All right, excellent. Ben such a number of items that I think we’re going to go to bring back to the conversation later on. But yeah you what you just mentioned about, you know, adjusting to the language and to the local currency and letting people know that you are actually delivering and participating in that market. It’s really critical so that we create awareness for your consumer or potential consumer, but we’re going to come back to you. I have a few questions and some of the questions are popping up as well. But really good presentation. One question, I don’t know if you have the handy but for the later discussion, you mentioned the categories that are either on the upward swing or the downward strands. And I know you said I don’t want to share or the one of our bad news here, but if you can later on, would be great to just touch one a little bit of those categories because we want the audience to be informed about what you’ve seen in terms of the consumer behavior and the market trends. Ben McLean (DHL Express UAE): Oh, yes. Felipe Cusnir (CITC): So, okay. That’s great. So now let’s go to Ritesh Tilani who is the founder and CEO or founding partner of Enhance and a number of other actually either ecommerce platforms or even marketplaces. As an investor he has been doing this for quite some time as well as a very successful entrepreneur. And so, we take please out of what Mohsen said, what Ben has said and what your experience, what would you like to share in terms of your thoughts and your insights regarding the market and the market access. Ritesh Tilani (ENHANCE): Thanks. First of all, for that overly generous introduction Felipe, and thank you for hosting us and thank you to CITC (www.cainternationaltrade.org) as well. So, most of them Ben are hard act to follow so I’m going to try my best and there will be some repetition, so, I apologize for that in advance. Perhaps for next time we can coordinate our presentation so that we’re not touching on the same stuff. I’d like to maybe give you some perspective from an actual business on the ground that deals with customers day-to-day and actually tries to understand how they think and how they behave. And also, you know what the effects of COVID -19 on the ground are with regards to our customers. So, for that, Felipe if you don’t mind, I am going to share my screen. All right, so I’m as Felipe mentioned, founding partner with ENHANCE, which is a venture builder for MENAPT (Middle East North Africa Pakistan and Turkey.) We started about four and a half years ago. And what we do essentially is, so, we build businesses that are vertical marketplaces and essentially what that means is we don’t we try not to hold any inventory ourselves. So, we’re just a middleman. We work with suppliers and merchants and brands that already have products and services and we connect them with consumers and we do all of that online. So today you have supply, you have demand, much of a transacts offline as Mohsen and Ben have already mentioned, and we want to make that connection more fluid and more transparent and more real time. As Ben has mentioned, we do value convenience as a consumer base in the Middle East. One could describe as a slightly lazy as well. But essentially at the end of the day, we are willing to pay a fee or of some sort for the convenience of being able to transact online and receive the goods at home. Now, the challenge has always been the fact that we have a strong modern culture. So, people like to socialize and they like to meet up with their friends and especially for the younger generation, a lot of that happens around modern environments or entertainment destinations, some sort. So, you see a lot of traffic going to the mall is very concentrated there and you have these Mega malls, you know, The Dubai Mall (www.thedubaimall.com) is one of the biggest in the world if not the biggest, I lost track. Mall of the Emirates (www.malloftheemirates.com) as well, very large, it has an indoor ski slope and penguins in there, you know, because it is Dubai after all and that’s how we grow and you know and so on and so forth. So, there’s all these amazing destinations and these developers have invested a lot of money into building these destinations to continue to drive traffic to these offline environments. So, people still like to transact there because they find themselves invariably in these offline environments quite often. And you have movies and cinemas in there, as well big food courts, all the major brands that you can possibly imagine, you’d be hard-pressed to find any major brand in the world that is not present in Dubai or the UAE. So, you have a lot of those offline. You don’t necessarily have all of them online yet, but that is changing very quickly. Thanks for example to COVID -19, Dubai Mall has gone entirely online on noon.com. So, Noon happens to be owned by founded by Mohamed Alabbar who owns The Dubai Mall. So, when they had to shut down the mall because of the pandemic, one thing they did was, they had all of their tenants who could not transact anymore, take all of their inventory and put it on noon.com so that people can still buy those products. And then, Noon would go and pick up from their warehouses of all these brands or their stores if they have the stock in the store, and deliver it to the consumer. So, a lot of that has been happening now as well. So, you see, a lot of supply is shifting to online very quickly, almost overnight. So anyway, so coming back to what we do as Enhance, we are a vertical Marketplace Builder. We don’t hold any inventory. We just connect supply and demand and what that gives is a lot of visibility into consumer behavior online. So, you know the more brands that we have in our portfolio to be able to sell to consumers, the more business we have, the more money to make. So, in that sense, we get a lot of visibility. MENAPT (Middle East, North Africa, Pakistan and Turkey) Market Now, the MENAPT (Middle East, North Africa, Pakistan and Turkey, 5th market in the world, 630M population) market as a whole is US$ 3.8 trillion, right, and hardly any of that is online. MENAPT countries include: Saudi, UAE, Jordan Bahrain, Oman, Lebanon, Egypt, Kuwait, Qatar, Morocco, Turkey and Pakistan. So, it’s ripe for the taking the UAE itself has made tremendous investments such as easy to buy to get more transactions, to go online and that gives them a lot more visibility into the money that’s flowing around as well. So, it’s in their best interest from that perspective too. And I’ll talk about this announcement a little later as well but wasn’t announcement recently, which also shared the data that with the strategy that’s in place within the next few years by 2023, US$4.5 billion of the UAE economy will come through online sales. That’s a pretty large number and that number was thrown out previous COVID-19. So, I would argue that probably doubling or tripling based on what’s happening now. Regardless moving on so this bit background on me and my partners, were all you know MBAs from some of the top schools, we are ex-management consultants that you’ll probably see from the slides because that’s what we do as a management consultant. We are very good at making slides and we’ve been doing business in the region for a long time. I was born and raised here. My partners have been here for over 10 years. Mohammad Alhokail, our third partner, is actually Saudi born and raised. So, we understand the region. We’d like to thank pretty well and what our information says about the region is that it’s booming and there is a massive opportunity for online service disruption, which is what we’re tackling ourselves as Enhance. So, if anyone of you have been to the Middle East, as you know, it has this very glitzy and glamorous city, but not too long ago. Essentially, just under 30 years ago our biggest highway, which is now eight lanes used to be only one lane in each direction and the tallest building in the entire Middle East was 30 stories tall, the Dubai World Trade Center. Now, we have the tallest building in the world on that same exact street, right? So, and what used to be the tallest building in the regions is now the shortest building on that stretch. So, it’s come a long way and it’s developing even more rapidly as we go forward. As a population, we’re growing very fast and we’re also one of the youngest in the world as has already been mentioned by my colleagues. In terms of GDP as well, we’re growing very fast. Saudi is already a G20, Egypt will become a G20 as well very soon within the next 10 years according to our data. It is also going to become the most populous city in the world and I think I mentioned that in the next slide as well. But Internet connectivity just ten years ago. We were barely a third online and now we’re on a percent we have some of the fastest mobile data networks in the world. We have 5G already ruled out. Most countries can’t say that yet and so very connected population. As I was mentioning, Cairo is on track to become the most populous city on earth, Abu Dhabi might not be so populous, but it has a tremendous amount of wealth concentrated in just one city. So, you know within the UAE see tremendous spending power. You see the same in Qatar. You see the same in Kuwait. Saudi is up there as well. Cairo might not be up there but has shared volume. So, in general, this is a very lucrative region to do business in, because consumers have a lot of spending power. In terms of digital services, being online, again the numbers were mentioned earlier 2% to 3% is what we see in the region. Whereas if you look at the West Europe and the U.S. have anywhere from 10%, 15%, 20% online retail out of overall retail. So, how many of the retailers actually have an online offering? It’s roughly the same, very few 6% and it’s an even bigger gap for that particular metric where you have 72% online in the U.S. And this data is two years old, so must be even more by now. Online Content, Product and Services Consumption In terms of online content consumption, we are leaders globally. So, in Saudi, for example, you have 3.2 videos consumed per day per person. This is almost double of the U.S. So, if you have content to distribute within the region, you have a lot of ready viewers for that content, and the same goes for any other digital service or product. If you have a product to sell online, you have a lot of people online who are ready to buy. Historically, you just haven’t had enough services or platforms for those people. And that’s what this next slide shows. So you’re probably all familiar with Craigslist, because it started in the U.S. and that’s where it’s focused primarily, and each of the verticals that Craigslist covered has had off to its of startups that went on to become very big and these are all the startups that race Series B+ and this isn’t even comprehensive. Within the MENAPT region, if you try to document all the same startups or the same verticals and how many stripes are serving them, it’s very few, so, there’s a lot of empty space. And what that tells you is that there are a lot of consumers that are already online. They just don’t have enough places to consume content, products or services. And so, if you sell through any of the platform’s, a lot more of the traffic is concentrated on those platforms. So, for example in the U.S., you have a lot of horizontal Marketplaces. Here, we just have two that are were talking about. We had a third that shut down. It just, it’s a very competitive space in the sense that these two are giants. So, one is Amazon. They purchased Souq which was the leader in the space back in the day and then you have Noon, which was launched with US$1 billion in funding. So, one could say that is the world’s only unicorn at birth, which has never been seen before. But that’s the kind of dry powder this available in this region to throw behind a venture like that to help it succeed. And there, there’s a lot of pride in the sense that Saudi and UAE founders who are backing this, they want something that is homegrown to go up against the likes of Amazon. So, the ambitions here are huge and that is not just with the founders, but also in terms of consumers. Their aspirations are large, so when it comes to consumption online, it’s the same story because they have the spending power. They will aspire to buy the best products, consumed the best services, pay top dollar for it. And in many cases, they’re doing it to portray a certain kind of image as well. So, if you have a brand that’s higher-end you’re likely to do well in this region. MENAPT Market Case of Success – Joi Marketplace Now, if I give my shift years and just talk about Joi (www.joigifts.com), which is our first venture under Enhance, give thing is a very interesting industry because I think it’s very representative of the consumer mindset and behavior in this region. So, you think about the size of the market to start off with. It’s a US$28 billion industry in MENAPT and that comes from things like 900,000 birthdays a day, 18,000 new births every day as well and 200,000 wedding anniversaries. These are a lot of celebrations and the population within you know, the GCC especially and the Middle East one could argue as a wider region, they love celebration. They like celebrating life and celebrating relationships. So, if you think about the family unit, the typical family unit is much bigger, its larger in the Middle East. So, you have the core family unit in the U.S. might be 3 or 4, we are talking 5 or 6 people in a single family, living under the same roof, right? So, naturally, I’m more birthday to celebrate by default. Then you have a lot of business relationships as well and social relationships, where people social and professional networks are much wider and they like to keep in touch with these people and they like to show them that they’re thinking about them, and they do that through gifts. So, that coupled with the higher spending power means we have a lot more gifts being exchanged and the average basket size is also much larger. So, for example, our data tells us that people spend on average about US$75 to US$80 on a single gift, right on one order, and that is double of the highest the second highest in the world. So, if you look at the U.S. or Turkey or any other comparable markets, nobody comes even close to that. So, that just tells you how attractive this region is and where we set off to disrupt this industry with innovation. We have the usual websites and apps, we are regional or live in 7 countries, in 22 cities across those 7 countries, everything from UAE, Saudi and the GCC to live on to with Lebanon and Jordan and Egypt as well, and we’re launching more cities as we go along. We actually have almost 10,000 products as can use under umbrella and we have 400 to 500 merchants that we deal with and some of them are the best brands, like Magnolia Bakery, Godiva, Ted Baker and many of these brands are American and they have a presence in the Middle East at distribution networks and so on. Magnolia, of course many of you might know is one of the best cakes and cupcakes in out of New York City and now, they have of course a network much wider than New York. But their pride they have three outlets here in the Middle East, in Dubai alone, right there. Also live in Abu Dhabi their live in Riyadh and we sell their products online for them. They don’t sell through anybody else other than us. And so, and then we’ve been seeing a lot of growth because of our offering and as our offering grows, more and more people consume these products through us. We cover a number of categories of flowers, cakes & gourmet, unique gifts like things like personalized items for example, and then experience as well. So, the whole range, with experiences which we added more recently, it’s things like yoga classes and spa treatments and things like that. So, people here really appreciate experiences and that leaves a more lasting memory in their mind as well. So again, the wider the offering, the more likely people are to come to us. So, people like options here. One other thing that we use to differentiate ourselves from the experience angle is, we do last mile ourselves. Ben I’m sorry, we don’t use DHL or any of your peers for last mile, but it’s because we want to deliver a memorable experience that keeps people coming back and talking about us and word spreads because of what they experienced. And we have these delivery agents that are dressed in nice concierge style uniforms and they wear a nice jacket and a hat and they are trained to make you feel special. So, they make eye contact, they wear deodorant which is important when the summer months, and they wish you a happy birthday and then they can actually sing for you as well. So that’s something that’s quite unique to us and nobody else offers that in the region. So again, it’s all about the experience about getting people talking about us and getting them to use us to make an impression on their loved ones and to make them feel special. UAE Digital Ecosystem in Light of Covid-19 Now, if we shift years again and say, how is the digital ecosystem evolving in the UAE, especially in light of COVID-19? The first thing that I kind of hinted towards earlier is the government has made ecommerce and digital services a priority. So, Dubai itself over the years has been positioned more and more as an innovation hub for this region as a wider region. They’ve done that through a number of different initiatives, one for example is Dubai Future Foundation, so, the government has invested in bringing some of the best founders and the best startups to this region, to help accelerate them and to have a lot of those companies focus on the Middle East and solve a lot of our problems but also problems that happens to be global in nature. So, that’s just one example. Another example is this news article that came out back in September about how Shaikh Hamdan, who’s the Crown Prince of Dubai has launched Dubai’s ecommerce strategy. Not many other cities in the world can say that they have an ecommerce strategy, but this shows you how it’s a priority for the city and this is partly where easy Dubai comes from so most in his work and his team that they’re doing. So, it’s about positioning Dubai as a hub for the ecosystem to provide logistics and infrastructure at a lower cost than we’ve historically had, and in much higher capacity to make it more attractive for ecommerce businesses to use Dubai as their headquarters as we’re doing for example. As Noon has done, as Souq has done, and many of the other big players in the region. And they’re reinforcing that decision that many others have already made and more will make in the future as well. So, this is partly where the estimate of the US$4.5 billion of GDP coming from ecommerce by 2023 comes from. Again, this was back in September, so now as you’ll see from some of the other data I’m about to provide, its accelerating. So, US$4.5 billion is on the low end, is a very conservative number and we’re going to overshoot that dramatically by 2023, I think. So, the government has made it a priority and they’re supporting entrepreneurs who want to build businesses in ecommerce. Second, the logistics infrastructure has become more sophisticated as well. And again, with the likes of easy to buy, you also have a lot of third-party logistics providers. DHL has obviously up the ante as well and you have a lot of smaller players popping up and many of them are relying on technology to provide their services which then essentially means that you’re able to deliver a product to the end consumer in a much shorter amount of time and ideally, at a much lower cost which we are already seeing as well. And so, in our case, for example, one of the reasons why we brought logistics in house was because most of our customers are quite forgetful, to be perfectly honest and blunt. And they don’t actually place their order until the same day. So, if it’s my girlfriend’s birthday or Mother’s Day, I might not remember until the day of and if you offer me a service where you’ll deliver tomorrow, I’m already not interested. You’re of no use to me. So, about a third of our orders go out with same day delivery. So, to rely on a third-party to be able to support us with that has more breakage points in the process then and we’d rather not do that. Also, we rely on third parties to provide us those products. So, we have to when we get an order in, we actually go pick it up from the supplier though the product manufacturer or the wholesaler who stocked it and then we don’t even bring it back to a warehouse. We actually bundle that together with the two or three other items in that same basket from two or three other suppliers bundled together on the fly with a greeting card that was printed by one of them and then we deliver it within 3 hours in Dubai to the end consumer. That is quite challenging and we match to figure out the formula for that but we rely on technology for that. And sometimes we do rely on third parties to kind of, add some buffer to our capacity on days like Valentine’s Day, which is our biggest day of the year and supply on the logistics side is extremely constrained. And so, anyway said all that to say that we now have the tools and some of the capacity to be able to deliver to our very demanding consumers and rightfully. So, they’re paying top dollar for this service and we want to satisfy their needs so that includes same-day delivery and another third of our orders come for next day delivery. So, it’s still quite soon. Right? So that’s in terms of logistics and infrastructure. Next, we have a lot of consumers having shifted their spending online almost entirely overnight. And this is of course thanks to COVID-19. It’s unfortunate that’s the kind of event that took that it took to get people to spend more money online and to try it out for the first time in many cases. So, we see this in for example, in Carrefour, it is one of the biggest hypermarkets in the region with a wide network and tremendous amounts of delivery capacity. This is the very first banner on their homepage. And for those of you just listening and not watching, I’ll read it out. Says despite our best efforts, we are unable to process the extraordinary increase in orders within the committed delivery time. As a temporary solution, we have reduced delivery slots until all pending orders are fulfilled. We recommend you schedule your next order in advance and shop in store. We appreciate your patience during these unprecedented times. So, they’re buckling under the pressure. They simply cannot keep up with the orders that are coming in and what used to take a day to deliver is now backed up for two weeks. So that tells you how many people are actually spending money online now. And this is two things. One, you have a very young population that was already spending money online and they’re perfectly happy to do so, but now, they’re spending even more of their money online because they don’t have the option to spend it offline anymore. And then you also have, the older generations where they would prefer to spend their money offline and physically go to a mall or store. Now, they don’t have that choice anymore because they’re actually more at risk from a health perspective than the younger population is, right? So, they have no choice but to spend them out. So, and many of them are doing this for the first time ever. So, all of a sudden, your penetration for people who spend money online goes through the roof, practically a 100%. Ecommerce Payment Methods And this is something the fourth point which some of my peers have already touched on payment methods are evolving and some of those include things like PayPal and e-wallets and Tabby which is buy now pay later. We as Joi are actually rolling this out within the next two weeks ourselves as well. And we do work with Tabby ourselves too. So, that unlocks a lot more potential for sales. So, if you have a population most of whom are getting paid towards the end of the month, if they have other financial commitments, so they run out of cash or their credit cards are maxed out halfway through the month, rather than making them wait two weeks to make that purchase, you can allow them to buy something halfway through the month and worry about paying later on once they get paid. So, that unlocks a lot more value as well. And the other thing that’s coming out of COVID-19 is COD is actually dying and it’s not just because retailers have stopped offering it. There are two things at play here, retailers don’t want to offer it because it puts their delivery staff at risk. It also puts our consumers at risk, right? So, there’s cross infection both ways, and we don’t want that. So many retailers have switch that off. Now, in Saudi, whether retailer want to switch it off or not, they don’t have a choice because the government’s CITC (www.citc.gov.sa) has mandated that’s COD is not an option for delivery anymore, right? So, COD has been completely killed off overnight in Saudi. Even if the same doesn’t happen in the UAE, the fact that most retailers are not offering it anymore means consumers are going to get weaned off of it and they get used to using their credit card or any other kind of payment method. So, this in essence is a good thing for online retailers because the cost of COD is significantly higher than any other payment method and the risk of returns is also much higher from COD. And that’s partly where the higher cost comes from. And lastly, there are more options available for people to buy from and for brands to sell through. So, the slide I showed earlier where you have the Craigslist comparison, more and more retailers are popping up for individual verticals as well. And so that just gives people many more options to buy from, so that will also increase their reliance on online or digital services. So, this is a good thing for anybody that is has a product to sell and they can sell it online. So hopefully that gives you some idea of where the market is evolving towards and how consumers behave and think, and hopefully this means that you would like to sell more and more stuff to consumers here in the Middle East because they’re waiting. They lap it up. We have some of the best brands here. We’ve many of them for decades and none of them have left the Middle East so they’re all quite happy making money. That’s all I have. Thank you and happy to fill any questions you guys might have. Felipe Cusnir (CITC): Thank you. Thank you so much Ritesh. This is great. This is really quite helpful and really illustrates a good picture that summarizes everything that we’re discussing here today. I thank you so much for the presentation. This is great. And I’m sure we’re going to have a number of follow-ups to that. We do have a few more minutes to discuss and I really wanted to just something of way of summarizing the discussion that we had here today. It would be really great if the three of you, as you mentioned the high per basket value, the interest in products that are either high-end or high-quality and immediately made in USA products are associated with a better quality products, but then we, and a lot of positive outlook that, there’s a tremendous growth in the region, from not only from the consumer but also an investment from the government and the proposed infrastructure. My question to you is to the three of you and we can start from the order of the speakers. But the speed of technology, the speed of the consumer appetite or even the consumer behavior changes is usually wave faster than the infrastructure that we have, right technology access government and our infrastructure. This is causing a lot of bottlenecks and especially now with COVID-19, which we can all hear agree that COVID-19 was a catalyst to online or to digital commerce, right? A lot of the companies that were considering going online, now, they’re forced to be online. A lot of the companies that were thinking about having their own online shops or being part of an ecommerce platform, now, they’re forced to do so. Or even we have examples here, you mentioned how the shopping malls are now using their inventory to upload that information to become available for people to purchase online. But there’s a shortage of you mentioned car for a short of drivers. There is a little bit of black maybe for storage facilities or cold storage supply chain, and I wanted to know from you, considering all the positive outlet that we have what would be in your opinion, some of the challenges that are the most pressing challenges that we have in the sector in general. Not necessarily just in the UAE, but from your perspective, how do you see these bottlenecks, because in the general term or in general sense, we can all also think that the bottlenecks are actually the challenges become opportunities, right? It could be an opportunity for an investor to come in and say okay, so, I see that there’s a huge demand for cold storage facilities, I’m going to come in and I’m going to build the state-of-the-art facility to cater to that specific need. But how are you seeing with the acceleration caused by COVID-19, with the market demand and the incredible growth and appetite from the consumers. How are you seeing the adjustments of the supply chain to enable then the consumer to have access to this to the merchandise that we are all promoting. Main Challenges in the Market Mohsen Ahmad (Dubai South Logistics District): Thank you Felipe. I think I mean when it comes to sort of bottlenecks, it’s regulation in the answer of the cross-border because I think what one Ritesh mentioned about the sort of the city’s yes, they’re quite large. I think one of the bottlenecks is how if an investor comes in the region. You don’t have a city or a country big enough for you to make a huge investment. You’ve got to have that cross-border. And when you come to the U.S., you’ve got the 50 states that you go, and then of course Canada on top of that, and then the Caribbean and you come to Europe is the European cluster and then China, it’s all the size. When you come to the Middle East countries are still small. So, I think the bottleneck that we have right now is how those cross-border becomes an improvement. And I think the good side about COVID-19 will probably be that pivotal point for ecommerce to have that jump and maybe it would be that now countries realize that the only way they can get their supply chain of their necessary basic needs for their people is maybe through online trading that needs to be done. And, now, of course, there’s operational challenge what Ritesh mentioned about, but I think that’s where you see the government of Dubai intervene and say okay, what we need care for to be operational. How could we put these puzzles together and get working? So that’s where I think if the cross-border becomes you got enough manufacturing, you got some of the country’s manufacturing, you can get a much better cross-border trading between the countries. That’s one key from my side. Felipe Cusnir (CITC): Okay, great. Ben from your experience from what you’ve seen is specially with your infrastructure there having placed. How do you see the situation? Ben McLean (DHL Express UAE): Yes, and I’ll give you two scenarios one pre and post COVID-19, both different but both challenges nonetheless. I think the first one when I look at the infrastructure here is more around the I’d say the customs regulations. I think most just touched it for cross-border. So, if you look at the GCC, it should be a replica echo of how it works, but from across trade perspective, it can be a little bit complicated for online businesses. And the reason I say that is because historically you look at the free zones, they’ve been structured and they work incredibly well for an offline business. So, if you’re a retailer who wants to move products and it’s a fantastic place to do business. So, these are historical issues which we’ve seen difficulties to be able to do online because any product comes in has to be registered on the inventory of the customs system and then you have export out, so then you have a transaction. So, we’ve been working very closely with customs. We’re strategic partner. We built a blockchain solution. You know, you look at Dubai Commercity (www.dubaicommercity.ae), Jebel Ali Free Zone (www.jafza.ae), and they’re very engaged in this and with customs in a very forward-thinking. So, they are trying to make change over legislation or customs processes and to make that trade easy. But as it stands today is a complicated process, but I’m very pleased to share with the help of people like Mohsen, customs, some of our other partners like the Commercity and Jebel Ali. And we’ve been able to set up a blockchain solution to be able to consolidate documentation to make cross border ecommerce a lot easier and a lot less costly with gaining the benefits of not having to pay that duty for inventory in the free zone. So, that transformation is taking place now, but it has been a challenge and will continue until we see those changes fully implemented, but I’m very confident that the government is making the right steps. We can see that with the investment in the free zone. So, I think it’s a case of when rather than if, but as I stand today it’s a bit of a challenge. In terms of post COVID-19, I’m very fortunate to say it’s is a challenge for us, but not to the same extent we’ve seen with maybe others. So, what’s happening is as you see that evolution of people moving online. We see that number obviously earlier on we spoke about being 2%. We can’t see what it actually is today, but we know it’s significantly higher and I’ve been speaking to a lot of big retailers here and their volumes of increase round 2.5 times. Yeah. Do you imagine from an infrastructure perspective? The mall now is outweighing supply. So, effectively is a nice problem to have that the local heroes you offer also cross-border a collapsing and I won’t mention names but what we’re seeing is some of these integrators are shutting down whole countries and I’m not some talking small trade lanes. I’m talking top five to four five trade lanes. So that’s causing tremendous pressure. The second thing is from a customer experience perspective, we’re starting to see deterioration, either because the products not available. It can’t be fulfilled or we’re just not able to deliver it. So, when we see COVID-19 really start to take place, where a lot of the integrators are very dependent on the national airlines, and when we stopped those for obvious reasons moving people in out, that mean products can’t move as well. So effectively what then happens is everyone started to move by road. So, you seen a huge amount of delays. Some of the roads have been closed in Bahrain for example in Kuwait, and so only that Saudi border from UA is open. So as a result, is that going to mean that people can’t connect cross-border. We’ve been very fortunate obviously in a very difficult situation for everyone but we’ve been able to operate on aircraft still connecting to these countries. DHL role in Ecommerce So, we play a very important part whether it’s from an ecommerce perspective, trying to get supplies into people that need it, whether it’s gifts for people not connected to their families or maybe even medical supplies. I mean, who would have thought they’re going online today to buy hand sanitizers or things like that. Right? So, those things are very important and we play a very important part. So, it is a challenge, is challenge for us as well. But we’re very fortunate that after 4 years, we have our infrastructure and investment holding up very well. But that being said, it’s still challenges because as I say at this moment, we have a demand for outweighs capacity. So, we can’t help everyone unfortunately. But so far, we’re standing up and we are doing a good job. Felipe Cusnir (CITC): Thank you. Ritesh please Ritesh Tilani (ENHANCE): Yeah from my perspective. I’d like to echo a lot of what most of Mohsen and Ben have said. Cross-border fluidity is an issue. Hopefully that gets resolved over time, but we are living in fragments and markets, right? The UAE or even Dubai on its own. It’s on a massive market and each market is either in our case with city or country because we have hyper local delivery, but as one market, Abu Dhabi is the second market. Saudi is a completely other story. And so that’s one issue. The other one is the fact that there is a lot of uncertainty with we’re headed how long this is going to go on to other challenges were going to face. So, what that means is the logistics players are not sure with regards to how much to increase their capacity because that is happens, right? I mean just because demand goes up doesn’t mean they’re going to go and buy five new places overnight. It has to be sustainable and a lot of this demand will probably die down once it’s all over now. Of course, we’re in from a very low base where a lot of people have now moved online and there’s a big spike, while that’s going to come down. It’s not going to go back to the same level of used to be at. A lot of people are now used to buying online and continue to do so, right? But now, offline retail will come back and online as well. You know what I mean. So, we’re going to start spending money offline again. So that uncertainty makes it very difficult for people to invest in that infrastructure and building up that capacity. The other issue that we see when my business has a lot of products that we sell are imported. The UAE is not much of a domestic producer. It produces certain things in this quickly, but the majority of that we consume our input and so, when you create valves and shut down and you lose very limited capacity, what happens is you start to see the inventory in the market dry out slowly with relief. For example, one of our biggest categories of sellers was flowers and still is just certain extent, but the import of flowers which is where most of our came from, kind of came to a honk and so now we have a very niche sense in the market and we have a lot of consumers initially making that purchase and we realize the suppliers don’t have the product and we have to cancel the order. Now, we listed as unavailable on our site and of course we’ve made arrangements so that we found supply again through different suppliers. You’ll find them in our sight again. We have to keep a close eye on it because that could run out day to day, right? So, it’s a supplier being constrained on their side, makes a Marketplace like ours really dependent on them to provide the product and supply. It makes our life a little more challenging. Felipe Cusnir (CITC): All right, great. This is really useful and quite informative. One of the other points and we’re going to wrap up pretty soon. We only have about a minute or two left. Well, other item that was kind of a common thread amongst all of us was kind of the consumer journey and the consumer experience right as we’re transitioning more towards the digital or online market. How everyone is doing their homework in terms of this? The research, they’re looking at reviews and they’re really study with the best prices are the best products. This poses as a great opportunity for companies that want to cater to their market, right? Because information today is pretty much accessible to everyone. So, we understand that is it’s a great opportunity. Now as we transition to, Rithas you mentioned COD cash on delivery is dying and some of the governments are going to be a little more, I think they will force this to happen as you mentioned it. Sorry that just not allowing it to happen. But some of the other markets might not be ready for that transition just yet. This wasn’t that opportunity for FinTech companies to come in and play that role of facilitating the cash transfer. And we see from here that you know based on the conversation that we had for most in from Ben and from Ritesh, it’s really obvious that the infrastructure is in place. You can use the DHL. What was the name of the service the eShop, right? You can buy your Hot Wheels without having the Hot Wheels actually catering to that specific market and Ritesh’s platform is really connecting the suppliers. My question actually is Ritish, you I know who your catered to in terms of the consumption, but when you’re talking about suppliers, are you are you talking to suppliers all over the world? Are you buying flowers from Chile? Are you buying honey from New Zealand to cater to your clients? Ritesh Tilani (ENHANCE): So as a marketplace with consumers very demanding and quite forgetful and come to you with their orders at the last minute, we can’t afford to place orders internationally and wait for that product to arrive. As quick as one or two days might be it’s too late for more than two-thirds of our customers, right? So, no. Unfortunately, we rely on existing distributor within the region to provide that supply for us. Yeah, and also by the way, I realized earlier when I was talking about the CITC. There’s a CITC from California (www.cainternationaltrade.org) and there’s also CITC in Saudi (www.citc.gov.sa), which is the one that ban cash on delivery (COD), which is the Communication and Information Technology Commission, not to get the two mixed up. Felipe Cusnir (CITC): Got it. Yeah, it does. Thank you. So, this is the thing. I want to be respectful of everyone’s time. We’ve been on this for 90 minutes already. It’s 9 p.m. 9:30 p.m. in Dubai. I really want you guys to enjoy the rest of your evenings. On behalf of the California International Trade Center and all the attendees that came to this webinar, I really want to thank you. Mohsen, thank you for giving us your insights and your thoughts, we will make your audio presentation available online later on. We’ll talk about this offline. Ben, thank you so much for your insights. And for all the information that you provided. It’s really great to have a partner like you helping with global trade either way that you guys help and I’m sure that we’re going to the conversation offline as well. And Retish, thank you so much your insights, the work that you do in terms of connecting the markets and enabling companies to be part of the market, and such a market which tremendous growth and expansion. It is really great that you’re doing what you’re doing. So, I’m sure that we’re going to have and I have people noting me that they want to connect with you, actually with the three of you at some point. So, we will concentrate all the questions to me, to the CITC, California CITC and will enable everyone to then have access to the presentations that you provided. But also, if we feel that there is a connection that they want to make directly with you, we can facilitate that as well. So, with that I really do thank you again. I look forward to continue this conversation offline or we might be back with another webinar for more specific details. Ben we’re going to let you off the hook without telling us about the categories that are going up or down, but I’m going to ask you that in another moment. Ritesh Tilani (ENHANCE): I’ve got my list here. I got it here ready. Felipe Cusnir (CITC): Wonderful. Oh, okay. That’s great. And again everyone, the purpose of CITC (www.cainternationaltrade.org) is really to share information from the experts there on the ground. They know what they’re doing. They’re doing a tremendous job connecting those markets. So, for us, it’s really super important to enable the company’s here to have access to that kind of information so they can make well-informed decisions about how to go about expanding to your market. So, we’re going to wrap up again. Thank you so much everyone. Thank you, Mr. Mohsen. Thank you, Mr. Ben. Thank you, Mr. Ritesh. Have a great evening in Dubai and I’ll see you guys very soon. Thank you so much everyone for attending as well. Thank you.