Impact of Social Media in UAE Business - Essay Example

Impact of Social Media in UAE Business Name Class Unit Introduction Social networks have had a great impact on our lives. The numbers of internet users who have signed with social media have been on increase. In UAE, 80% of the residents are expatriates who represent different firms globally while 20%are locals (Kannan, Menezes & McKechnie, 2010). UAE is made up of seven emirates with Dubai being the most prominent. It has been identified that UAE has the second rank worldwide on the number of users in social networks. In 2008, the number of social network users in UAE was at 46% and have been increasing rapidly. The country has a mobile phone penetration of 352% with internet use in 2010 estimated at 75% (Kannan, Menezes & McKechnie, 2010). The country consumer culture has led to high technology adoption. The social platforms mostly utilized in UAE are Twitter, Facebook, MySpace and LinkedIn (Murphy & Zweiri, 2011). Despite the government intervention, the number of Facebook users in the country has been increasing with Facebook and twitter being used by firms as a marketing tool. At the moment, more than half the population in UAE is signed to social sites. Companies have moved to social sites to get in touch with the potential customers (Nour, 2005). This report looks at the impact of social networking on business in UAE. Social media in UAE Social media are web 2.0 applications utilizing internet platform to serve as an interface for interactions among people (Boyd & Ellison, 2008). The sites allow communication to be carried out where people can share create and exchange information. Through social media, it is easy to communicate and interact with each other by sharing interests, information and activities. Social media involves participation, openness, conversation, community and connectedness. According to research data, Facebook, LinkedIn and twitter are the main platforms of social media used in UAE. Facebook is the leading social network in the region followed by LinkedIn and twitter (Kannan, Menezes & McKechnie, 2010). The levels of internet users accessing social sites in UAE are high which current research estimates to be at 90%. Despite this, there are two groups in the social media users. The groups are active social media users and passive social media users. Active social media users are able to interact with brand and contribute while passive social users rarely do so. In UAE, half of the social media users are active. Active social media users spend on average excess of three hours online. Most of the residents are very confident with their usage of social sites. For most of the users, they have positive attitude towards social sites (Kannan, Menezes & McKechnie, 2010). Internet users have adopted social sites as a voice to express them which has enabled growth of these sites (Weiner, 2006). Social media sites in UAE generate the largest traffic compared to other sites. For the residents of UAE, they have adopted social media as a necessity. Social media users in UAE tend to be the younger generation who takes up the largest proportion. Most of these users are educated. A research proved that daily visits to social sites accounted to 57% and mostly driven by the younger generation (Murphy & Zweiri, 2011). Apart from communicating with friends and relatives, the users are able to access information on companies and their brands. Looking for information on brands and products has been one of the main uses of social media in UAE. Business marketers have thus utilized this opportunity to reach the consumers (Kannan, Menezes & McKechnie, 2010). Social networks and business Over the time, social networks have been able to acquire business following. Initially, social networks were developed for personal networking but business have found their advantages and invested in them. The increase in use of social networks has made business to consider using them for their purposes. Today, social networks are being considered as marketplaces by firms where business activities take place (Kannan, Menezes & McKechnie, 2010). Online transactions have increased over time with more consumers gaining confidence to shop online. Social networks have become ideal shopping sites. Business has realized that they have to be where their customers are and it’s evident that most customers are in social networks (Van & Anria, 2009). In business, maintaining a close contact with the employees is vital. Use of social networks has been used by business in UAE to keep contact with their employees. The management has a closer contact with their subordinates through social sites. For example, a manager can send a message through a social site in case they have an urgent issue to be attended (Shih, 2009). This has helped cut down unnecessary emails among the employees and management. The time taken in completing tasks has also been reduced. This is through the reduction of thetime which the management takes to contact employees (Kannan, Menezes & McKechnie, 2010). Business in UAE has been using social sites to gain information. Social sites have proved to be the fastest way to gain information in business. Businesses are able to find new business opportunities and like minded businesses are also able to meet. Companies are able to meet and share information on new marketing strategies and techniques (Van & Anria, 2009). In UAE, companies have been able to maintain their presence online through the use of social sites. The business is able to use social networks to contact potential employees and customers. Some of the business has employed people who have responsibility to update company presence in the social sites. Social sites have thus been tailored to act as the voice of the business (Murphy & Zweiri, 2011). Market optimisation A study done on firms’ adoption of social media proved that business which adopted social media were able to increase their revenue by 18%. Business has been using social media for market optimisation. The business has been fine tuning their marketing efforts and refining the target audience. In market optimisation, business uses social media to look for what the consumer are searching for and what they share. The firms have been more focused on increasing their online influence to the consumers. Business in UAE has been optimising their market through the creation of socially enabled campaigns. Promotional campaigns have also been created through social marketing (Kannan, Menezes & McKechnie, 2010). Generating revenue Social media have been a means of generating revenue for business in UAE. The sites are used to generate sales indirectly. This is through the creation of a long term relationship with the customers. There have been uses of tracking systems that have helped the business to manage repeat business and also attract customers. Thus, use of social media has helped the business to generate revenue indirectly (Shih, 2009). Saving on operations Business have realized that they can enhance saving through use of social media. This has led to business in UAE to utilize social media to make consumers to be brand advocates. Once the consumers are brand advocates, it becomes easier to reach them at low cost. Social media have thus been utilised as a customer service platform where firms make savings. The business is also capable of tracking and measuring these savings (Shih, 2009). Customer experience Customer experience and social media have been proved to correlate. Use of customer experience have been helped the business to enhance their brand health which has helped to increase revenue and business savings (Van & Anria, 2009). Businesses have utilized social media to continuously monitor the customer feedback and experience with their products or services. This has acted as a major step towards solving any consumer problems. In UAE, social media have served as a platform where consumers place complains and reviews. The channels have proved useful since the consumers are able to gain immediate feedback. The consumers have also been able to learn on new products through use of social media channels (Shih, 2009). Innovation Social media is an important tool in business innovation. Business in UAE has realized this and adopted social media in their operations (Shih, 2009). Social media have been used through crowd sourcing by business. The business asks the engaged consumers on their insights and have helped in coming up with desirable products and services. Consumer feedback is vital in this process (Scott, 2007). Business has come to realise the importance of attracting customers through conversations rather than using ads. With a large number of consumers online, UAE business has the capability to attract customers (Shih, 2009). Social networks have helped the business forge a close relationship with the customers. The more customers trust a company, they higher the chances of doing business with them. The consumers are given a platform where they can express themselves through conversations. The business is able to have a face to the consumers (Kannan, Menezes & McKechnie, 2010). Communication In UAE, most of the businesses are large multinationals. The consumers in most cases assume that large and medium sized companies do not have personal communication with them. Social media have eliminated that barrier and enabled these firms to communicate with the consumers (Shih, 2009). Business has been able to build trust and authenticity through social platforms. Social media have allowed the business to monitor the public perception which was not possible with traditional media. The businesses are also able to give a quick response to the consumers (Scott, 2007). Strategies used online Research has showed several online strategies used by business in UAE. The strategies are creation of fan pages, quick online response, information disclosure, employment practices, customer services and feedback (Shih, 2009). Creation of fan pages Branded fan pages have been used by the business to create a presence in social media. Social media have also been proved as an effective tool to counter negative news about a business (Shih, 2009). When a firm faces rumours which may be damaging to its reputation, they have engaged in social media to clear their image. Due to large numbers of social media users in UAE, the channel has proved to be effective in broadcasting news. The firm is able to reach actual and potential customers easily than the traditional means (Scott, 2007). Using social media to gain candidate information When hiring, some of the firms utilise social media to gain applicants information. LinkedIn and Facebook are the main source of information for the human resource department when selecting personnel. The employer can check the employee background and discipline of an employee. This is carried out with respect to some rules (Shih, 2009). The rules are that the employment decision made should not be based on age, race, religion or gender. Any information on social sites that touches these areas should be avoided when making hiring. For some firms, they have been advertising their vacancies both on social media and using other channels (Scott, 2007). Obtaining consumer feedback and information Business has come up with blogs where they are able to gather consumer feedback and gain information (Van & Anria, 2009). Twitter has been used for long in customer service and feedback. In UAE, business has been using word of mouth marketing by utilising blogs. The bloggers with large read audience are provided with the company products where readers can review. These strategies have been used with an aim of translating into business (Murphy & Zweiri, 2011). Enhancing consumer confidence In UAE, the use of handheld devices have become essential than use of desktop computers. Handheld devices have been the main platforms where users access social media. More consumers have been making online purchases and reviews. It has been proved that the consumers’ attitudes towards website are also dependent on cultural predisposition (Van & Anria, 2009). The consumers in UAE are attracted more to a website that is able to relate to their culture through design. For example, research shows that due to their risk averse nature, the consumers in UAE are likely to make purchases in websites that utilise graphics. Use of graphics increases the consumer online shopping confidence. The website design must be culturally correct (Kannan, Menezes & McKechnie, 2010). Mobile phone strategy Smartphone’s penetration in UAE is high with most consumers opting to use new generation phones. Users with smart phones are able to connect to the internet daily hence has the capability to access social networks (Scott, 2007). Business in UAE has thus come up with efficient and effective mobile strategy. Research has proven that users are more accustomed to accessing internet using mobile phones. This has made them possible to interact with brands on certain platforms. In UAE, social network sites are in the growth phase of product life cycle. This implies that social platforms in UAE have high chances of existing in the generation to come (Kannan, Menezes & McKechnie, 2010). Social media management Business in UAE has employed people who work in enhancing the company online presence (Van & Anria, 2009). The efforts by business to maintain an online presence have led to enhanced interactions in these channels. Business has been using online channels to increase their market share. They are able to learn of changes in consumer purchasing habits. Businesses have created online marketing plans to enhance consumer loyalty (Murphy & Zweiri, 2011). Challenges Despite the positive impacts, social sites have brought several challenges to business in UAE. Legal risks Social media are associated with legal risks. There are risks such as employment, privacy, media risks and breach of privacy. Business utilising social media platforms in UAE has been needed to look for legal advice before engaging in the strategies (Scott, 2007). When recruiting, use of social media should be carried out under consent from the candidate. Business has been required to judge candidates fairly and avoid discrimination in hiring based on social media. Social sites have become an important part of driving force in globalisation. Business has been utilising social media as part of their business strategies (Murphy & Zweiri, 2011). Business has been faced with legal issues when utilising social sites. Advertising in social sites have to be carried with respect to the set laws. The advertising carried out is supposed to observe the consumer laws and market practices (Scott, 2007). There are general advertising rules that have to be followed when using social media. Some of the products such as pharmaceuticals are subject to certain restrictions. Social media have also developed their own regulations which the business has to abide with (Kannan, Menezes & McKechnie, 2010). Content rights Loss of content rights is another challenge encountered by business when using social media. In some social sites, the content posted online can be used in any way they see fit. This makes it hard to post any content that can jeopardize business intellectual capital. A business using social sites has to be keen to avoid this. Business can be held liable for the information that has been published on the social media. User contribution to the company site can lead to liability of business being defamed (Murphy & Zweiri, 2011). Privacy Another challenge faced by the business using social media is a violation of privacy (Abdel, 2010). There are issues such as cross site scripting, survey scams among other scams that make users wary of their privacy. This makes consumers to void social sites. Business has been facing problems in conducting e-business as consumers do not feel free to make transactions online. There have been cases where consumers’ credit card numbers have been stolen and used maliciously by online thieves (Van & Anria, 2009). The number of users making purchases on Facebook has been affected by these scams which have violated users’ privacy. Business using social media has also been exposed to higher chances of phishing and other online vices. This occurs when the business has inadequate security policies and technical safeguards. Some of the business has lost vital information through these acts (Abdel, 2010). Reputation When wrongly used, the risks of social media outweigh the benefits. Social media reaches a wide audience which has made it popular. When a business makes a mistake in social media, it easily reaches a large audience (Van & Anria, 2009). In a country such as UAE where large population have access to internet and social media, the reputation risk through social media can lead to public relations nightmare. If the business employees posts inappropriate images online especially on business fan page, it can lead to a great reputation risk. In UAE, the conservative nature of the country culture has to be observed at all times when posting business information online (Murphy & Zweiri, 2011). Social media and business productivity Social media have been used as a tool to enhance relationship between the business, employees and customers. Business use of social sites has more than tripled since 2008. Social networks have helped business in UAE improve their performance (Kannan, Menezes & McKechnie, 2010). One way is through search engine optimisation complementing. For example, business can post a story on Facebook, twitter and also give a video presentation on the same using YouTube. This enables the search engine to easily locate the business content online. Social sites have been engaging the followers of a business with open and honest discussion. Business is thus able to gain an immediate feedback from the consumers (Dave, 2008). Some of the consumer networks lead to loss of revenue. An example is a streaming websites which utilises a lot of bandwidth from the business. It has been proved that streaming in YouTube and Facebook accounts for largest web activity in business. Job training and retraining have also been carried out by some firms using YouTube demonstration. The business has thus engaged their consumer in online channels where they can learn and enhance their skills (Dave, 2008). Conclusion UAE is among the countries with the highest internet penetration and high mobile phone usage. Most of the residents have been able to utilise new generation smart phones which have led to ease in connecting to social sites. As consumers have increasingly adopted social media, business in UAE has engaged the consumers through use of internet. It’s evident that social networks in UAE have led to great impacts on business. Business productivity has been improved through collaboration among the hierarchical structures, marketing, consumer feedback and increasing business online visibility. Despite this, business faces threats brought about by social sites. The threats are loss of privacy, legal issues, content rights, reputation risks and loss of revenue. Business is supposed to come up with ways in which it can minimise risks and enhance benefits. References Abdel Azim, A 2010, “Online privacy concerns among social networks’ users”, Cross cultural Communication, Vol.6, no.2. P.74-89. Boyd, Danah, M. & Ellison, Nicole B 2008, “Social Network Sites: Definition, History, and Scholarship”, Journal of Computer-Mediated Communication, Vol. 13, pp. 210-230 Dave, E 2008, Social media marketing: An hour a day. London: Sybex. Kannan, S., Menezes, G. & McKechnie, D. 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