Three UAE Business Sectors To Sharpen Your Entrepreneurial Skills In Take a look at the beauty sector, AI and e-commerce and how they are being shaped and developed by technology.
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The UAE has a thriving economy, and advances in technology are opening up exciting new opportunities for entrepreneurs. Some sectors, of course, are hotter than others. In this article, we'll look at three sectors that are undergoing phenomenal growth– both globally and in the UAE. We'll explore how you could tap into them with your own startup business. The aim is to help you come up with ideas which you can then research and develop further.
Beauty is big business in the UAE, with GCC consumers spending over US$9 billion on beauty and personal care products in 2016. That spend, reported by Euromonitor International, is expected to grow over the next few years. The top five categories are fragrances, colour cosmetics, skin care, men's grooming and hair care. The underlying growth, combined with new technologies and global trends, provides massive opportunities for startup businesses in the UAE, and can lead to big returns.
Let's look at the current trends. According to Forbes, beauty consumers globally –who are mainly women– enjoy finding new brands and seeking out locally made products. There's a definite shift towards natural and "free from' products –especially in skin care– and young, creative brands. The desire for quick fixes and personalization of products are other major trends.
How you can benefit by getting involved: The key is to bring modern technology, tools and apps to your offering– backed up with beauty influencers on social media. Instagram is particularly popular. Take these examples. A young New York company (Hello Ava) uses artificial intelligence and big data to find the right skin care products for customers. You complete a quick online quiz ("chat with Ava'), and an algorithm comes up with personalized recommendations. Two weeks after placing your order, a skin advisor will check in with you to see how you got on. Another company (Patchology) uses transdermal patch technology for its skin care products. The technology comes from the pharmaceutical industry and is more effective than lotions or creams at getting active ingredients into your skin. Patchology has over 68,000 followers on Instagram. Both companies emphasize the technology behind what they do –Hello Ava calls itself "the brains behind your beauty'– which resonates with tech-savvy millennial and Gen Y consumers. Almost everyone wants to look beautiful, and you can tap into that with a new technology-driven beauty startup.
Artificial intelligence (AI)
AI is a global game changer and provides huge opportunities for entrepreneurs in the UAE. PwC estimates that it could contribute $15.7 trillion to the global economy by 2030, with $96 billion of that being in the UAE. The UAE government recognizes the importance of AI, and launched a strategy for its development in October 2017. Sectors covered in the strategy include health, technology and education.
But what exactly is AI? It's a term used to describe computer systems that can sense their environment, learn and take action in response to the environment and other inputs. Examples include the Hello Ava chatbot above, and digital assistants such as Alexa and Siri. AI is disrupting the market in two ways. It provides the ability to automate processes and give massive gains in productivity, especially in labor-intensive sectors. And it can be used to enhance products –e.g. by providing more personalization or saving consumers time– as seen with Hello Ava.
How you can benefit by getting involved: The impact of AI will be significant and will cover all industries and organizations. One way to benefit is develop AI technologies –with government support– and sell them worldwide. Another option is to become an expert in AI, and provide a technology consulting service to organizations. They know that AI will give them big benefits, but may not have the time or expertise to learn the technology themselves. Another option is to look at your own industry or sector, and figure out ways that AI could cut costs, improve productivity and/or enhance products and services. Then use your insights to start up your own business. There are many global examples of AI to help you on this path to success.
E-commerce is a massive global business with worldwide sales of $1.86 trillio in 2016. That's expected to more than double in size by 2021. Online sales in the UAE are expected to be $10 billion this year, up from $2.5 billion in 2015. It's easy to understand why e-commerce is becoming more popular. As we've seen above, consumers are becoming more tech-savvy. They're very comfortable to use social media and apps to learn about products and engage with brands. It's then a very short step –perhaps just one click– to buy the products online.
How you can benefit by getting involved: You can be part of this revolution by starting up an e-commerce business in the UAE. From there you can target specific local markets or go more global. You can also sell a wide range of products, or focus in on one particular sector. Popular e-commerce product types include software, electronics, beauty, clothing and fashion accessories. A critical factor is to use the latest tools, apps and mobile technologies to connect with consumers. A recent survey, for example, showed that nearly 60% ($1.3trillio) of global e-commerce sales in 2017 were via mobile devices, specifically smartphones. That's a big opportunity if you get your offering right. Or alternatively, you could move further back along the value chain and actually develop these mobile technologies and apps, to sell to e-commerce businesses across the world. The opportunities are immense.
The UAE is a fantastic place to start up a business –especially if it's in a high growth sector. In this article we've looked at three hot sectors –beauty, AI and e-commerce– and discussed how they're being shaped and developed by technology. We've also suggested ways that you can get involved– to capitalize on the opportunities and be part of the success story.
Related: Why Startup Hotspots Around The World Can't Match The UAE For Global Appeal