E-commerce websites in UAE expected to double by 2026

The number of UAE-based e-commerce sites are expected to double from the present 50,000 over the next three to four years, Haider Nizam, president of Zoho in the Middle East and Africa (MEA) region, said.

Most of these sites pertain to fashion, household supplies, home furnishing, food and beverage and electronics which will be the fastest growing sectors in this field, he opined.

He explained that the spread of e-commerce will depend on adopting better strategies to manage the supply chain, which is an important factor to drive the success of e-commerce stores.

Data from Statista, a research institution, expects that the size of the e-commerce market in the UAE will reach $17 billion, especially since the Internet penetration rate in the country reached more than 95%, while smaller companies continue their efforts to reduce the costs of establishing a business and managing operations through Investing in affordable solutions, for example, or choosing to work online only, which will lead to an increase in the demand for e-commerce website creation platforms.

Slow Growth Before Pandemic

In an interview to an Arabic daily, Nizam said prior to the outbreak of the COVID-19 pandemic, the growth of B2B e-commerce sites was slower compared to B2C e-commerce sites. Although there was no officially announced figures in this regard, the pandemic changed the scenario.

He further said: “Compared to B2C e-commerce, B2C e-commerce has the ability to grow at a rate of two and a half times. This growth is underpinned by the need to stimulate online purchases and continued investment in B2B e-commerce markets by the government. Accordingly, the transactional challenges are more complex in B2B e-commerce and it will take longer before they become more prominent.”

On his expectations for the performance of the e-commerce market in the UAE, Nizam said: “The e-commerce sector in the Emirates keeps pace with the world’s leading e-commerce markets. Since the start of the COVID-19 pandemic, the UAE has witnessed a quantum leap in managing corporate operations and consumer expectations.”

The sector is expected to record an increase of nearly 55% by 2025. This growth witnessed by the sector in the country is largely driven by the unprecedented penetration of the Internet, which currently stands at 96%.”

Market Drivers

Nizam pointed out that the leading legislative role of the UAE government in regulating the ecosystem and making laws that would enhance trust between sellers and buyers is one of the most important drivers of the e-commerce market at this time.

He said that with the opening of Dubai CommerCity, which is the first free zone specialized in the e-commerce sector in the Middle East, North Africa and South Asia, the process of setting up an e-commerce store has become much easier than ever before.

Arabization of Sites

He said that the localization of brands also increases the adoption of electronic commerce, explaining that the greater the availability of Arab e-commerce platforms, the greater the number of consumers who will trust online retail companies. An example of the localization of e-commerce sites is the ability of online retailers to offer local payment options that match consumer preferences, he added.