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Dubai's Aramex eyes busy Q4, spurred by coronavirus impact on e-commerce

Dubai's Aramex eyes busy Q4, spurred by coronavirus impact on e-commerce

Regional CEO Andy Van der Velde is confident volumes will more than double as a result of increased online retail activity

Dubai-based logistics firm Aramex is expecting to see volume of business ramp up by “well over 100 percent” during the last quarter of the year compared to Q4 2019.

Like many companies, Aramex didn’t escape the economic tailspin caused by the coronavirus pandemic, with border closures and grounding of flights leading to a 23 percent drop in Q2 profit, which it said was due to several “unforeseen costs prompted by the global onslaught of Covid-19”.

However, regional CEO Andy Van der Velde told Arabian Business they were looking forward to a busy end to the year, helped ironically, by the continuing coronavirus struggle.

He said: “We’ll have the normal (Christmas) peak, which is people buying gifts for everyone else and then of course with limited travel, you’re going to see people buying more on the internet. Instead of going to see their families, families will be sending each other gifts on e-commerce and there might be a little bit of holiday spending money that’s spent online instead of going to malls.



“We do see it as a period that’s going to be super busy. We’re expecting our volumes and e-commerce to be up by 100 percent on Q4 last year.”

Spurred on through necessity, given the coronavirus-enforced lockdowns and curfews across the region, the GCC e-commerce market is expected to reach $19.7 billion by the end of this year, according to a panel of experts at the virtual roundtable on Intelligent Orchestration of Retail Experience.

It was revealed that Saudi Arabia is expected to claim the majority of the total ($8.3bn), followed by the UAE, with $7.5bn.

Van der Velde revealed that the e-commerce sector more than doubled over the last six months, which led to a 45 percent increase in the number of couriers operating in Saudi Arabia, while staffing levels in call centres in the kingdom were up 33 percent.

The Aramex app also has 2.2 million users, a 25 percent increase on pre-Covid levels.

“We’ve had to invest in new facilities in Jeddah, Riyadh, Dubai, Abu Dhabi, Kuwait, Oman, Bahrain. A lot of investment has gone in for additional facilities,” said Van der Velde.

“Thankfully for our industry e-commerce took off. We’ve had well over 100 percent growth in e-commerce.



“Volumes out of Hong Kong, London, USA, into this region, the GCC, we just saw phenomenal growth.”

And despite shopping malls and other retail outlets reopening to the public once again, he doesn’t expect e-commerce activity to drop by any significant margin.

“We believe that Covid has accelerated buying patterns by, let’s say, five or six years. We don’t believe e-commerce is going to drop right off again. We believe that there’s a new base that’s been set,” he said.

“Yes it might drop down a little bit as retail stores reopen and people feel more comfortable going back into shopping malls, but the base has definitely changed.”

Five things we learned:

1. Aramex is expecting an increase in e-commerce activity over the Christmas period, with families still reluctant to travel due to the Covid-19 pandemic

2. Saudi Arabia is a key market for the logistics company, with the number of couriers increasing by 45 percent over the last six months and call centre staffing levels up by a third

3. Covid has accelerated buying patterns by up to five or six years

4. The GCC e-commerce market is expected to reach $19.7 billion by the end of this year

5. The Aramex app has witnessed a 25 percent increase in users since pre-Covid levels

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