UAE Issues 9,200 Licences for e-Commerce Businesses in H1 of 2023

Like in other countries across the world, the UAE’s e-commerce industry witnessed a splendid growth during COVID-19 pandemic and sustained the momentum till today.

The data from Ministry of Economy showed that the number of e-commerce licenses registered in the UAE has now reached about 9,200 in H1 of 2023, registering a growth of more than 15% over the same period last year.

Among the seven Emirates, Abu Dhabi issued 7,400 licences, which is more than 80% of total licences in the country. It was followed by Ras Al Khaimah with 174 licences, Sharjah (172), and Dubai (118) respectively. The remaining were distributed in the emirates of Fujairah, Ajman, and Umm Al Quwain.

According to a report by Dubai Economy published in March this year, e-commerce in the UAE is expected to reach $19.88 billion this year. One of the main reasons for this trend is the highest rates of internet penetration in the world, with over 93% of the population using internet.

Another report entitled ‘E-commerce Report in the Mena region,’ issued by EZDubai, the fully dedicated e-commerce zone in Dubai South, in collaboration with Euromonitor International, revealed that the UAE, Saudi Arabia and Israel accounted for 72.1% of the total market size.

The Mena e-commerce market size is expected to reach $57 billion in 2026, with a CAGR of 11% over the 2022-2026 period. “Although countries like the UAE, Saudi Arabia and Israel are expected to remain leaders in e-commerce market share, countries like Algeria are expected to see strong growth,” the report noted.

UAE Preferred Destination

Companies engaged in e-commerce businesses that are looking at various countries in the MENA region prefer the UAE because of its strategic location as it is gateway to Europe, Africa, and Asia. Another aspect that is driving these businesses towards the UAE is the country’s well-developed infrastructure such as airports, seaports, and highways, that has made it easy for businesses to transport goods and deliver them quickly and efficiently.

The UAE is diversifying its economy by moving away from hydrocarbons and this also helped in the development of e-commerce sector and thus companies are applying for e-commerce licences. The UAE’s economy includes industries such as oil and gas, tourism, trade, and finance, all of which have created opportunities for eCommerce businesses. The UAE’s business-friendly environment and its low-tax regime have also made it an attractive destination for eCommerce businesses.

According to market watchers, e-commerce currently tops the licensing patterns, with the ease of licensing and the low cost of establishment, in addition to the ability to reach the largest number of consumer segments who now prefer to make purchases via internet.