The dilemma facing Gulf auto retailers amid e-commerce boom

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Imagine coming home after a long day of work and buying a car as you lounge on the sofa.

Key players in the Gulf region’s automotive industry have made it possible to do just that. Whether you would want to or not is another question.

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During the coronavirus related lockdown measures in March, Nissan Middle East launched its Nissan [email protected] platform. Through the platform, users can configure and customise their car, check for stock availability in their nearest dealership, calculate financing and buy it online and have it delivered to their doorstep.

Seez, a UAE-based automotive digital platform serving parts of the region, has signed a partnership with a regional government authority which will also allow consumers to buy and register any car online.

While ground-breaking in its novelty, it is still too early to assess whether online car purchasing will pick up speed. Tarek Kabrit, founder of Seez, said 27 percent of the app’s 1.6 million users go into the “online buying” section, even though the option is not active yet. “There is interest in that but I think when it comes down to fully buying the car, these numbers will drop,” said Kabrit.

Asked whether consumers have bought cars using Nissan’s digital platform, Thierry Sabbagh, managing director of Nissan Middle East, said it is “too early to judge its success but we saw a big jump in the utilisation of our platform during the lockdown.”

Thierry Sabbagh, Managing Director, Nissan Middle East

“Buying a vehicle is really one of the second largest investments after a home. It’s an exciting moment for the client so we should not say let us put everything on digital and forget about the retail in the showroom,” said Sabbagh.

“I don’t think that will happen anytime soon and that is not the strategy of Nissan,” he continued.

Only 5 percent of consumers in the US have bought a car online from start to finish, even though the option to do so has existed there for several years, said Kabrit.

For luxury cars, visiting the showrooms is an integral part of the buying experience and cannot be replaced by a screen, said Ramzi Atat, regional head of marketing & communications at Aston Martin.

Ramzi Atat, regional head of marketing & communications at Aston Martin

“When it comes to luxury products, the experience of the purchase constitutes a major part of the emotional reward the consumer gets from buying the brand… Leading luxury retailers have tapped into developing this area of their business to ensure that the journey of purchase is enjoyable from early intent to well after the purchase. With that in mind, the physical interaction and time spent one-on-one with the customer remain key to making the latter feel a special bond with the brand they like,” added Atat.

Instead, the future of car purchasing will likely be omni-channelled with consumers using a mix of online and offline streams during the buying process.

“Maybe you want to go to the showroom for the test drive but you don’t want to hang around for two hours completing the registration papers. You can do it from your phone,” said Kabrit.

Tarek Kabrit, founder of Seez

“To be able to move between the two seamlessly, each part of the process needs to be fully digitised. This is what we are doing and we feel a huge portion, probably 80 percent of consumers, will start doing different steps of the process digitally,” added Kabrit.

“The pandemic forced us to dust off our digitalisation plans and bring them to fruition the soonest possible so we could continue to engage with our customers during the pandemic,” said Atat, explaining that Aston Martin has introduced digital vehicle configuration options on its website.

“I think Covid accelerated digital retail for the automotive industry by around three years in terms of digitalising,” said Kabrit.

“Online buying is not a gimmick anymore; it’s essential and car dealers have realised that,” he added.

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