How Dukkantek Plans To Digitalise The Merchants Of The Middle East

Six months after raising $5.2 million from investors, Dukkantek co-founder Sanad Yaghi is in celebratory mood. The UAE-based business, which describes itself as a store management platform, had expected to take a year to complete its pre-fundraising plan to expand into six new markets; in fact, it has been able to make the transition in less than half that time.

“Our growth is testament to our efforts in empowering traditional merchants to thrive in a digital world with premium end-to-end technology,” Yaghi says. “For too long, the owners of small and medium-sized businesses have been left on the margins of the technology shift; now we are serving their unmet needs.”

Dukkantek’s target market is the 13 million or so small and medium-sized retailers who operate in seven countries: the UAE, Oman, Qatar, Kuwait, Bahrain, Turkey and Saudi Arabia. It offers a digital platform that enables these retailers to run their bricks and mortar stores more efficiently and productively – and, crucially, to make the leap into ecommerce.

“We bring a technology platform consisting of three different value propositions that enable these merchants to compete in a digital world,” Yaghi explains.

Value proposition one is a set of tools that enables merchants to run their businesses more effectively. That includes everything from inventory management functionality to improve stock tracking and organisation to a point-of-sales system to analyse performance and generate reports.

The second strand to the platform is support for payments, ensuring merchants can offer customers more choice about how to settle their bills. Dukkantek’s platform supports customers who pay through options including cash, card payments or on credit.

Third – and perhaps most important of all – is the platform’s e-commerce offering. It gives merchants everything they need to start selling online for the first time – and to manage that operation in tandem with the bricks and mortar business. For example, many merchants struggle to keep track of inventory when selling both online and in physical stores, so having one system that incorporates both parts of the business is very important.

Having launched the business in January 2021, Yaghi and his co-founders have seen it grow quickly. Today, some 7,000 merchants have signed up to the platform. And while Dukkantek was originally conceived as a service aimed at retailers in the grocery sector, the merchants on the platform now span 70 different verticals, with clothing and electricals particularly prominent alongside food and drink.

The need for merchants in the region to embrace ecommerce has been a particularly important growth driver, Yaghi says. “Ecommerce has grown in ever part of the world, but the shift online in the Middle East was much more sudden, accelerated by externalities such as the Covid-19 pandemic,” he says. “Smaller merchants struggled with that because there was not the infrastructure in place they needed.”

The region’s smaller businesses certainly do not want to risk missing out. Research compiled by EZDubai and Euromonitor forecasts that the ecommerce market across the Middle East and North Africa will be worth $49bn by 2025, a 55% increase on the levels seen in 2021.

Such growth explains why ecommerce functionality is such an important part of the appeal of Dukkantek. While the platform thinks its technologies will add value across every part of the retailer’s business – Yaghi points to analytics tools that help merchants understand which products will sell best, for example – the opportunity to expand online is particularly vital. Three-quarters of the businesses on the platform are now trading in this way.

As for Dukkantek itself, its growth is built primarily on a software-as-a-service (Sass) model. It charges a flat fee of $400 a year for businesses who sign up to use the platform. Further revenues come from the commissions that the business earns through its payment gateways.

Having met its geographical expansion goals – though further launches into North Africa are under consideration – Dukkantek’s immediate focus is now on adding new services. In particular, Yaghi is keen to explore working capital solutions. Many merchants are keen to expand the number of stores they operate, he explains, but held back by the lack of finance available in the region.