1. IntroductionWithIndian’s consisting of 28 percent of thetotal population of the UAE, the total number of Indian people in the countryis 2.6 million. (http://www.
abudhabi2.com/uae-population-by-nationality/,2016) Experiencingsignificant growth in Dubai’s market overall has mirrored similar effect on itscar sales industry as well. The country is also ranked as the second-best city for the driving experience. As there is a huge demand for the automotive sector, the auto workshop’s demand is also relativelyhigh. But currently, there isn’t anyplatform available for the users to check which auto workshops they can taketheir vehicle, the suggested idea of creating a digital platform will helpmotorist to choose best auto workshop according to service standards andexpertise provided.
These workshops wouldbe categorized according to their service type provided such as engine work, bodywork, AC repair etc. In case of accidents, the user could check the service standardsprovided by the workshop as the auto insurance firms would be linked to them.On the other hand, the small-scale workshopscould use this platform to generate more business opportunity, as it wouldprovide them more visibility. 1.1.
Market Overview1.1.1.AutomobileMarket in UAESaudiArabia is the largest automotive market followed by UAE in the second positionamong the GCC countries. In 2012 numberof vehicles sold was 268,900 units but itwas 263,100 units in 2013. From 2012 to 2013 there has been a decline in salesof 2.2%y/y, but H1 2014 shows a growth of more than 6.5%y/y.
(Emirates NBD2014)Tabel:-1(Emirates NBD 2014) UAE’s used car market is dominated by Japanesecars with the most favorite brand being Toyota.( https://carswitch.com/#/sell,2017). Among Japanese cars, brands such as Toyota and Nissan holds a marketshare of 11 percent and 10 percent respectively.(Haine, Alice. 2017).
1.2. VATimplementation on Automobile industryCurrently, the automobile industry is under Sevier pressuredue to the implementation of VAT by the next year 2018.
Most of the local suppliers hold a largevolume of stocks with the demand relatively low for cars in UAE currently.Firstly prices would be affected by a long-term as new car sales would include VAT chargesas well. Whereas in the short term demand might shoot up as a consumer would take the opportunity to get the best price before VAT is introduced. For second- hand sales these regulations mighthave an impact with an oversupply of pre-owned vehicles coming to the market. (Akbar, M.S.2017)1.
3. Purchasepower of UAETable:- 2 (Ministry of Economy,2016)Inpurchasing power parity term UAE’s GDP ( gross domestic product) is still inthe highest category. Even then UAE’s per capita GDP ranked 95thpercentile all over the world in 2015. (John, Issac, 2016). Families andindividuals are limiting their spending and rationalizing the use of incomes,as result, there is been a decline from633.2 billion to 613.5 billion dirhams between2014-2015 in private spending sector. As shown above,the ratio between the real GDP to final consumptionalso reduced in these years.
(Ministry of Economy, 2016)As the proposed idea heavily relies on the automotive market,the growth in the segment creates more business opportunity for vehicle servicesegment as well. Henceforth the suggested idea would make business sense in referenceto the market overview provided above. 2. UAETrends2.1. AutomobileImports to the United Arab Emirates In theentire MENA region, UAE is considered as a regional hub not only for cars butalso for vehicle components and parts because of being one of the largestimporters of used cars. Hence, the country plays an important role among theGCC region positioning themselves as a major re-export center.
(Emirates NBD, 2014) Table:- 3(Emirates NBD, 2014)2.2. UnitedArab Emirates Consumer ConfidenceIn theUnited Arab Emirates, the second quarterof 2017 showed slight growth in consumer confidence from 108 in the fourthquarter of 2016 to 110 currently.
The highest recorded consumer confidence wasin the first quarter of 2015 whereas thelowest was in 2010 fourth quarter with 115 and 97 respectively. The averageconsumer confidence in the UAE is 108.03 for the years between 2010 to 2017.
Inthe coming 12 months timeline, theconsumer confidence stands at 107.00. Accordingto the forecast, the consumer confidencetowards is estimated to be around 109.00 by 2020.(United Arab Emirates Consumer Confidence, 2017) Table:- 4 (United Arab Emirates Consumer Confidence,2017) 3.
SWOT Analysis Strengths Weakness · Unique idea and first to implement · Friendly user interface with real-time updates and feedback system · Lack of updated database on auto workshops in the region · Absence of criteria for monitoring the workshops Opportunities Threats · Higher vehicle density · Annual Increase in the number of registered vehicles. · The total value of UAE’s used car market of around US$2.5 billion in business. · Regulations on new vehicle issuance to be implemented · Strong public transportation network · Innovative and sustainable transport facilities like Hyperloop and Tesla taxis. For moreexplanation on the topic please refer Appendix 1. 4. Porter’sfive force Analysis4.
1. Bargainingpower of buyers:-Ina recent survey conducted it states that a largenumber of population in UAE considered price as the major factor forpurchasing of any product. It was found that price and quality are the majordriving factors for any purchase decision. Considering Expect, Females and Studentsbetween the age group of 18-30 are more pricessensitive than other demographic groups. (Pujari .V 2012) In2008 when citywide bus service was introduced in the Capital an estimate of50,000 people used the bus services,these numbers increased dramatically evenafter the fares were increased to Dh1 for free.
But after two years when thecharges were increased to Dh2, the number of users dropped.(The National 2014) Table:-5 The above graph shows the demand for retail value dropped due to various factors. Bringinga flat economical year in 2016, which caused an effecton various sectors such as lack of new securitiesfollowed by consolidation and salary reduction had pushed the consumers to be more price cautious.
(Cooper.F 2017). All these factors are a strong indicatorof how price sensitive is a major point for most of the country’s population. 4.2. Threat of SubstituteThe primary threat wouldbe the evolving public transportationsector here in Dubai. The government has taken up various projects to enhancethe use of public transportation sector by introducing a new innovative way to commute.
CyclingAspart of Dubai government’s initiative ofbuilding a healthy society, the Roads andTransport Authority has undertaken the project of constructing cycling tracksthat pass through residential areas likeJumeirah Beach, Downtown, Oud Metha and many more. The agreed plan is to builda total cycling length of 500km in Dubai by 2021. (Cerna, Fatima D.
L., 2017)4.2.2. Metro/tramsThe implementation ofMetro and trams was a great success to commute across the city for theresidents. Due to its huge demand, thegovernment has agreed on the refurbishing of five main metro stations like BurjKhalifa, Dubai Internet City, Mall of Emirates, Emirates Exchange, and DAMAC. Currently, the entire metro system transports more than 650,000passengers daily.
(Priest,Mike, 2017) 4.2.3. Buses/TaxiTheUAE bus system help around 30million people to commute on a daily basis withmore than 193 routes provided on weekdays. The system has unique routes ofabout 59 of which also helps people to travel without any hassle. However, the bus network is mainly used by the low-income group and there isn’t much done toattract high-income groups and thereforethe major problem still remains to be the traffic congestion. (Vinod, Robin, 2015) 4.3.
Threatof new entrantsInline with the vision of Dubai 2030, thetransportation sector’s 25% would be driverless and smart. This would benefit an economywith an annual saving of more than Dh22 billion.(Gulf News, 2016)Table:-6(Gulf News, 2016) Aspart of Vision 2030 Dubai’s Road and Transport Authority(RTA) along withHyperloop One is going to implement a high-speedrevolutionary transportation project.
This project is a part of the vision ofowning world’s leading infrastructure andalso in the region.(Salem, Sara.A.
A,2017)4.4. Bargainingpower of SupplierIn UAEdue to lack of parts manufacturing industries local authorized suppliers aresometimes falling shorts of car part. Targeting this opportunity there has beena lot of small-scalecar part suppliers in the market especially in the Northern Emirates. As per theory, the bargaining power is always higherwhen the suppliers are less in the market but in this case, the gap is overcome by other third party players.
Thereforethe bargaining power of the supplier is relatively low when compared with otherelements from Porter’s five force model. Table:-7 (ValuStrat, 2015) 5. SegmentationAs UAEis having a diverse population, its income statue can also be classified.According to a recent study most peopleunder the social class of D which is the second lowest income class as shown below with the largest population.Table:- 8(CountryReport, 2017)The report suggests that people in social class A and Ehad the highest expansion rates between the years of 2011- 2016. Table:- 9(CountryReport, 2017)The forecast for the yearsbetween 2017-2030 suggests that socialclasses A and E will still be fastest growing classes in the country as due toincome inequality. And therefore by 2030,the dominant category would be social class E.
Henceforth the proposed productshould cater to this segment due to its high future potentials. (Country Report, 2017)6. TargetDue tothe primary use of the proposed product would be to find ideal auto workshopaccording to the user.
The statistics report of traffic accidents in UAE hadbeen taken to find the real target audience. As the report suggests most drivers in this region are ofmale genders mainly from Indian nationality causing most accidents who are inthe age group of 40 plus. (Khaleej Times, 2017)Table:- 10 (Khaleej Times,2017)In accordance with thisstatistical report, the narrowed down target community would be male Indiannationality audience who are in the age group of 35-45. 7. PositioningTheproposed product would be positioned as a one-stopsolution for vehicle user’s serviceheadache. It would be an online guide for an autoworkshop in the region, where there is a transparency about the servicethat the end consumer is going to get. The image perceived in the endconsumer’s mind will be ‘value discovery experience’ whereas for thesuppliers(i.e.
auto workshops) it would be a platform to generate more businessopportunity and to get more visibility.Key Positioning points:- · Value Discovery Experience· Platform to generate business opportunity 8. MarketStrategy’The marketing strategy is the way in which the marketingfunction organizes its activities to achieve a profitable growth in sales at amarketing mix level’.
(Kotler, Philip, 2014)Proposed Market Approach Key Strategies Description Galactic User Involvement The aim is to provide the consumers with a high-end user experience such as high-speed data transfer compatibility. Push Notifications Currently push notification is one of the ways to communicate with the users, but this facility would be able to convey individually tailored content according to users behavior on the platform. CRM through the Platform Consumers must be able to communicate to the auto workshops directly through the platform and will be able to book various services depending on their needs. Micro Interactions To ensure customer loyalty on a long-term the platform would generate content suggestions based on the behavior pattern of the user on the platform. First-time user benefit When a user downloads the app, that particular user is entitled to a free oil change/car health check from a suggested auto workshops. Policy Every workshop who would want to partner with the proposed product would need to be on a contract with the proposed organization for nominal service charges. Periodic Updates In order to achieve a market monopoly in this sector periodic updates should be conducted based on the traffic usage, buyers persona profile and google analytics. Advertisement Campaigns Seasonal based ad campaigns would be recommended across all advertising platforms available.
9. BrandCommunication CampaignTheaim to carefully coordinate and combine the proposed product along withavailable channels to convey a compelling, subsist and fair message. Keeping inmind the targeted audience sector these are the curated campaigns proposed.
9.1. PersonalReferralsSince the business models revolve around existing auto workshops, itwould be ideal to use them as the communication pillars. Most of this enterprise do have a customer base,therefore the proposed product’s knowledge and awareness could be conveyed by the workshop staff to thecustomer personally. Due to the personal interaction,the probability of market penetration is high. The proposed organization would provide materials which can be handed out tothe consumer by the workshop to boost up the purpose as well. 9.2.
OutdoorAdvertisement CampaignSeeing that the targetedindustry is automobile the action plan suggested would be at two specific areaswhere most vehicles meet. These would be the petrol station precisely ENOCpetrol station followed by parking spaces in malls. The reason to choose ENOC isdue to its high footfall of over 85million people across Dubai and the Northern Emirates in 2015. (Arabian Business,2016). The selected location for the second outdoor campaign would be BurJumanmall’s car parking space.
Being ideally located in a residential area and alsobeing one of the top shopping location according to Forbes Lifestyle Magazine.(Bishop, Jordan, 2017). 9.3. Transit MediumsIn orderto target the above-mentioned nationalitygroup, transit mediums such as taxis and buses would be highly recommended. Theproposed location would be Bur Dubai.
This location is one of the oldest city in Dubai is mainly populated by Asian community people and the campaign wouldbe catered to this specific residential location.(mybayut, 2017). 9.4. RadioAs astrong media platform in UAE, being able to reach large expats of 3.2million people the use of radio campaign iscrucial. The campaign should run mainly during the morning shows as it reachesto 62 percent of listeners.
(Lakhpatwal,Zaria, 2016). The aim will be to create a brandenlightenment among the listeners. The suggestedcampaign would play across 22 Asian radio station available in thecountry.(Radio channels of Dubai,2016).
9.5. Print MagazineToattract Arabic speaking community, it would be ideal to advertise in thecountry’s only Arabic language automotive magazine. It is considered to be aportal for Middle East car enthusiasts. The UAE ranked top position in globalpenetration of smartphones at 73.8 percent. (Nelson, Chris, 2016). Henceforth to increase the market share and to have adigital presence the suggested strategy is vital.
9.6. Sponsorship As partof achieving brand visibility in the international market, sponsoring aninternational event helps the brand to achieve its objectives. Being thelargest automotive event in the NorthAfrica and the Middle East The DubaiInternational Motor Show would be the ideal event for sponsorship. Last year the show attracted more than 108,000visitors from more than 70 countries. It also attracted more than 1000 plusglobal media to the event. (https://www.
dubaimotorshow.com/plan-your-trip/about-dims,2017). To create a strong brand image, participating inmotorsport is also ideal. 9.7. Tourist Destination Advertising UAE beinga prime tourist destination, advertising in these destinations will help theproposed product to get more potentialcustomers outside the targeted audience. In 2016, Abu Dhabi saw an average of4.4 million hotel guest visiting the emirate.
(Sahoo, Sananda,2017). The recommended location for the proposed product adverting would beFerrari World Abu Dhabi and Yas Mall. Currently,the theme park receives over 1 million people and Yas Mall attracts about 20million visitors yearly. The forecast forthis location is to attract 48 millionvisitors by 2021.(Scott, Andrew, 2017). 10. ConclusionAccordingto the report findings, the proposedproduct idea would be beneficial because it’s a unique idea. Also due to UAE’sstrong automotive market with vehicle servicing as a major requirement.
As found in the report, the country is one ofthe largest users of a smartphone with the target population as the majorityin the country. Comparing all these factors such as high reach possibilityfollowed by growing target population and resolving the primary need of vehicleservice along with business generation for auto workshops, the proposed product would be a successful business opportunity.