Analyzing the Use of E-Commerce by Agribusiness Firms in the United Arab Emirates.

The Internet has the potential to improve the economic performance of agricultural marketing systems. Since the concept of globalization has become real with the development of the Internet and e-commerce, the number of online users along with buying/selling online increased rapidly in recent years. The total number of internet users in 2007 in the United Arab Emirates (UAE) is estimated at 2.3 million representing 42.90% of total population. The estimated ratio of Internet users to total population grew from 19.6% in 2000 to 42.9 in 2007. The agribusiness industry contributes significantly to the UAE economy. According to a recent estimate, 10% of all businesses in UAE are related to agribusiness. E-commerce has the potential to offer opportunities to agribusiness industry to reduce transaction costs by marketing their products directly to the consumers in the UAE. The main objective of this study was to assess the use of e-commerce by agribusiness firms in UAE. A comprehensive survey was conducted for the agribusiness firms in the Emirate of Abu Dhabi to collect information on the usage of e-commerce. Preliminary results showed that majority of agribusiness firms (71%) in UAE do not even have a website for their business. The majority of businesses in banking operation (77%) have website, followed by insurance (47%) and other related businesses (29%). The veterinary and agricultural materials and supplies businesses were least having websites. The results also showed that firm size (based on number of employees) have positive relationship with having website and conducting e-commerce operations. A majority of firms with website provided information about their products and prices, accepted orders and payments online. The main reasons for the businesses without website and not having e-commerce activities were no need (32%) and being a small business operation (15%). The results from this study will contribute significantly to understand e-commerce usage by agribusiness firms in the UAE.