By Helmut Bracun
Predictions For 2020: The quickest way to get an insight into what is happening in the economy is to look at what people are buying and selling
Classifieds was once the major source of revenue for newspapers. As the world has become more digitised, the industry has evolved into a more user-friendly one, with giants like Craigslist, Gumtree, and OLX leading the revolution. People can find everything from a couch to a property and even an electric car through classifieds. Backed by a well-calibrated offline infrastructure and an easy-to-use interface, the new age classifieds platforms are removing the hassle behind finding, negotiating and ultimately buying or selling.
The UAE is home to a population of 9.7 million people of over 200 nationalities. Their purchasing power is constantly growing and evolving, and this reflects directly on the dubizzle platform. Over the course of 2019, we saw an increase of more than 30 percent of daily unique listers in our goods section, and in 2020, propelled by the Expo, we expect this to grow further.
A major driver of growth in the UAE has undoubtedly been the property market. At the moment there is a surplus of supply in new projects, which reflects itself with a general softening of prices. Over the course of the last year, these softening prices have also extended to the secondary market (properties that have been on the market for a while), leading to increased investment. This has resulted in great market stimulation, and we can expect this to continue in 2020 – though the prices could start to strengthen before and during the Expo. With strategic government initiatives being released in the lead up to the Expo, the economy becomes increasingly transparent, winning the confidence of investors and developers alike.
At the moment, the consumer is spoilt for choice. The prices are so attractive that for the budget that the renter had initially allocated, he can now get a better place to live. This could mean a larger property or a property in an optimal location – closer to work, school or the metro line. Similarly, for buyers, not only have the prices become optimal for investment, banks have made financing a property significantly simpler. Backed by government initiatives and the greater financing options, in 2020, tenants or long-term UAE residents could find it more financially beneficial to buy and not just rent.
The property market has a domino effect in the UAE economy – all connected businesses have also seen a spurt of growth in the last couple of years. As more and more end-users chose to buy a property, or renters decided to move into larger properties, we can see that businesses such as movers and packers have also grown.
Rent or mortgage is generally the largest expense that a person incurs. With softening prices and a wide array of options for buyers and renters alike, a single dirham has been going a longer distance than initially budgeted.
With people moving into larger or forever homes, or even with changing tastes, there are a lot of items which are still in great shape that become obsolete. This is where the online classifieds market steps in – one man’s obsolete treadmill is another man’s new year’s resolution becoming more realistic.
Over the last year, the most bought and sold second-hand items through our platforms were electronics, home appliances, sports, and outdoor furniture. Another trend that we noticed in 2019, was that people were making more environmentally and economically conscious decisions. Not only are people being more mindful of single-use plastics, but they are also being more mindful of the environmental and budgetary impacts of shopping from the second-hand market. Buying and selling used goods is not just beneficial for the environment, it is easier on the pocket. For example, a brand-new Pro Form 530 ZLT treadmill can set you back AED3,500. On the second-hand market, a lightly used treadmill of the same make and model is available for AED1,750.
Buyers can now indulge in the products they like in the brands that they prefer, and in this case, at half their initial budget. Sellers can not only dispose of the products that they no longer want around their home; they can make enough money for flight tickets for their next vacation.
"Armed with adaptability and digitisation, 2020 brings exciting prospects"
As you become more comfortable listing products for sale on the second-hand market or checking for products on the second-hand market ahead of the primary market, making and saving money becomes a lifestyle choice. We expect that this will continue to grow stronger in 2020.
With over 25 million visitors expected from around the world, 2020 promises to be a year of high consumption. As the market opens up to higher demand and thus more competition, we can expect that prices will become more competitive over the next year. What sets an online shopping platform apart is the prices and the ease of use.
Recent statistics have shown that shoppers in the UAE spend about $3.5 billion to $4 billion a year in online purchases. Of that, about 70-75 percent are orders placed with shopping sites in the UAE. As much as $3 billion is spent by UAE shoppers at local online portals. Having said that, with the current prices, online shoppers still see a price parity when compared to the prices in the USA, for example.
Ease of use is another factor that deeply impacts how often a shopper uses the platform. When making major life decisions, such as moving into a new country, for example, you would want to be able to check out your first new rental apartment, the couch to fit that apartment and the first second-hand ride on one easy to navigate platform. Buyers value transparency and the convenience of being able to shop for everything they need from one place. Sellers too value the time and money that they save by being able to easily list products that they no longer have the need for.
2019 was a dynamic year for the classifieds industry. The classifieds business is unique in the sense that it grows not only when the economy strengthens, but also when the economy softens. In a strengthening economy, people have more purchasing power, so they choose to buy more expensive items on the second-hand market or sell their old products for new ones. In a softening economy, people become more price-sensitive and search for cheaper alternatives on the second-hand market. Either way, the classifieds business continues to strengthen. Armed with adaptability and digitization, 2020 brings exciting prospects for the industry.