E-commerce business soar in UAE, may touch $8 billion by 2026

E-commerce business has breached the $5 billion mark and is expected to cross $8 billion by 2025, according to a report released by EZDubai, a dedicated e-commerce zone in Dubai South, in partnership with Euromonitor International, the world’s leading provider for global business intelligence, market analysis, and consumer insights.

More consumers in the UAE made online purchases across all categories during 2021, compared with 2020, with 75% of respondents typically purchasing online, according to the report. The fastest-growing sectors by industry from 2021-2025 will be homewares and home furnishings; food and beverage; and media products.

Countries in the Middle East are in a better position to enable further e-commerce development due to the high GDP-per-capita and internet penetration, the report said. The UAE and Qatar are on top, with GDP-per-capita above $40,000 and internet penetration above 90%, the report pointed out.

Both countries have successfully implemented fiber access in homes and have the highest active mobile-broadband subscriptions in the region.

Online shopping in the Mena region is fast catching up with global powerhouses such as China, with many online retailers scaling up services during Covid-19. By 2021, the total market size is expected to reach an estimate of $31.7 billion, according to the report.

Credit/debit cards are the preferred method of payment in the Emirates, the report added.

Commenting on the report, the CEO of the Logistics District – Dubai South, Mohsen Ahmad, said: “The growth that is witnessed in the UAE and the Mena region encourages us to work harder and closer with our e-commerce players in order to boost the sector, so that the emirate’s e-commerce market becomes a globa“Life After COVID-19: Retail” by Dubai Future Foundation (DFF), l powerhouse.”

Surge in online sales

In another report entitled “Life After COVID-19: Retail, Dubai Future Foundation said that the online retail market In the UAE and Saudi Arabia was US$7.5 billion before COVID-19 cases were reported in these nations. This rose to US$11 billion by end of March 2020.

In Dubai, online shopping and e-commerce platforms have been doing good business as residents are avoiding shopping malls in response to COVID-19.

Leading shopping malls like Majid Al Futtaim (MAF) in Dubai, confirmed a surge in online sales (188%) in Dubai, with a 59% year-on-year increase in online customers in March 2020, the report said.

Emaar, a real estate company based in Dubai, has set-up a simulated Dubai Mall on e-commerce giant’s website noon.com for customers to shop virtually at many of the mall’s well-known stores.

To retain its customers, Al-Futtaim ACE recently opened the region’s first digital drive-through shopping experience at Dubai Festival City. Customers can place orders online and visit the mall to pick up their purchases the next day onwards.

Another way to draw the consumers’ attention is to certify the malls as COVID free zones by the health officials and also offer them tax-free shopping in the malls, the DFF report said.

While Saudi Arabian retailer BinDawood Holding has witnessed a 200% increase in its online sales, Majid Al Futtaim recorded a 285% rise in online sales during last year.