Page 67 - Aamir Rehman - Dubai & Co Global Strategies for Doing Business in the Gulf States-McGraw-Hill (2007)

Think Again: Addressing Misconceptions about the GCC 51

with these American-based fast food chains, identify strategic loca-
tions, and ensure that global standards are maintained.
Another interesting sign of the growing appetite for Western
goods in the GCC is the development of formal and informal meth-
ods for customers to procure global brands that are not marketed in
the GCC by foreign retailers.

Aramex: Shop & Ship
The shipping company Aramex began as a wholesale delivery serv-
ice supporting US-based courier companies such as FedEx and
Airborne Express. In 1997, Aramex became the first Arab-based
international company listed on the Nasdaq. It subsequently went
private and then listed publicly again, this time in Dubai. Aramex
is a cofounder of the Global Distribution Alliance, a network of 40
distributors with almost $8 billion in revenue worldwide.
For the GCC, Aramex has developed a novel service called
Shop & Ship, through which GCC customers can set up a mailing
address in the United States or the UK to receive online purchases,
as well as ordinary letters, magazine subscriptions, and any other
items that can be sent through the mail. This allows the GCC con-
sumer to purchase online from vendors like Amazon, DKNY, and
Fendi. Aramex then forwards the goods on to the GCC-based pur-
chaser, three times a week, and even calls or sends a text message to
the purchaser’s mobile phone when the goods arrive. Packages can
be tracked along the way.
The rationale for this service is simple: buyers want the goods
but many online vendors won’t ship them to the GCC directly—or
will do so only for very high prices—while others will not accept
the Gulf consumer’s credit card. The company profits by levying a
one-time setup fee for establishing two mailboxes (one each in the
United States and the UK); there are no annual fees. Aramex then
charges for individual shipments by weight, with tariffs varying by
destination.
As an illustration, consider a resident of Dubai shopping on
Amazon.com who wishes to purchase three books, each costing $10
(£5.00) and weighing one pound (about half a kilogram). As its
cheapest option, Amazon would charge $30 for shipping—equal to
the cost of the goods—and deliver in 15 to 40 business days.