What have been the major trends shaping the Oman logistics sector, and how is the current macroeconomic environment impacting your business?
All the macroeconomics of Oman have improved considerably since the decline in oil prices in 2016. Projects like Duqm refinery and developments in the oil and gas industry have enabled more production, spearheading the recovery of the sector that constitutes 70% of the country's GDP. While the retail sector has been slow to recover, in the logistics sector, Oman has become a trans-hub for all kinds of logistics services destined to GCC countries. The capacity and volume of both shipments and cargo has increased via air, sea, and road, facilitating the operations of free zones like Salalah and Sohar. In this context, we have been able to strengthen our operations, increasing capacity and enable transshipments. Customers can leverage our bonded facilities in the city and airport to minimize their cost in terms of double taxation and duties. The introduction of the VAT and the expansion of the e-commerce business will keep the retail sector suffering for a while, but the situation will improve in 2020 with the money that will be injected from the oil and gas sector. Indeed, oil and gas will be on a good steady growth for 2021, and the automotive sector will witness a similar boom.
What are your expectations on the e-commerce segment in the short-term and why?
We will continue serving the B2B market as it is one of our main segments. Moreover, we see a good expansion for us in the e-commerce sector next year. Although traditionally Oman has not had a large e-commerce sector, we forecast a good expansion over the next year and a real double-digit growth in the coming years. We have been working closely with the government to understand what is lacking in the current model and to convert Oman into an e-commerce hub to serve the GCC, East Africa, and North Africa. As such, we are leveraging Oman's simple customs clearing process, political stability, and geographical location to attract e-commerce businesses and SMEs. We are offering the necessary warehousing solutions and distribution centers, packaging facilities, and all the necessary requirements to achieve our goal. A major step in this direction will be the 15,000-sqm facility inside the airport, as well as the new DHL easy shop that will allow customers to shop anywhere in the US and other countries and get their shipment delivered within two days to their doorstep. Finally, we are signing major deals to upgrade our fleet and our network, in order for us to fully capitalize on the growth of the sector.
Where else do you feel that technological upgrades and advantages will impact your business the most in the medium term?
Today, technology is affecting every aspect of business and is on the fingertips of every customer. Our main goal is to simplify the customer experience with easy and accessible communication platforms. The next major stride will be on demand delivery. We are currently implementing an application that helps consumers to decide how, when, and where they would like their package to be delivered. Meanwhile, the B2B segment continues to witness an increase in integration between our systems and those of the counterpart, with all the data being stored. The integration is playing a big part for both businesses and consumers. It has the capability to have the systems communicate, impacting for example, customs clearance. At present, we are clearing 97% of our shipments before they even reach Oman. In the future, technology will further improve transport systems through robotics, innovations, and smart systems. In the near future, every shipment will be done through GPS delivery, and government regulations will be major enabler in this development.