Online business rules set for major revamp

TRADE and commercial rules in Bahrain are being reviewed for major revamps by legislators.

Parliament and Shura Council members are looking into ways to enable local businesses in the country to compete when it comes to prices offered by online suppliers.

Legislators believe that there should be lowered requirements and restrictions and some experts suggest increased tariffs on imported goods could also offer a solution.

Parliament financial and economic affairs committee chairman Ahmed Al Salloom told the GDN that legislation was needed to help local businesses compete with online local, regional and international sellers.

“Organised businesses in Bahrain, shops and outlets, are paying much more in fees, bills, taxes, expenses, rents and wages than those selling from home or online,” said Mr Al Salloom, who is also a board member of the Bahrain Chamber of Commerce and Industry (BCCI).

“People will always seek the cheapest option – in this case online – and this is driving several businesses towards closure.”

Mr Al Salloom, who is also the Bahrain Small and Medium Enterprises Development Society president, highlighted the fact that e-commerce activity had boomed since the Covid-19 pandemic struck, as highlighted in many studies.

“Businessmen will always look into lowered costs and more profitability and if it means closing their shops and going online, or reducing rented space, they will do that,” he said.

“Several businesses have shifted online, but again government restrictions and requirements for them to operate stores are draining their resources at this time.

“For that we need major revamps to existing legislation that level the pricing of things sold online with that in the shops.”

Meanwhile, leading Bahraini economist Dr Akbar Jaffari said Bahrain’s module of a free economic environment would likely prevent moves to impose a pricing policy.

“Prices are determined by supply and demand and perhaps traditional shops need to change their conventional way of operating to compete with online competition,” he said.

“The cost of doing business is expensive and Bahrain could consider the French system of imposing taxes on online purchases, but the right of end-users to get the cheapest price would be breached.

“That could be done through higher shipping and handling fees but people will always find a way out to puncture the system – so MPs need to study things carefully on how to address the matter.”

Dr Jaffari also believes the shopping experience involved in visiting a mall or shopping complex should be taken into consideration.

“The same items are available through a commercial app, but people tend to love the shopping pleasure and for that they are paying higher,” he said.

“Businesses need to be more creative on how to attract people to buy from them in their shops.”




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