The UAE’s e-commerce retail market has grown 28.2 per cent from $3.9 billion in 2020 to more than $5 billion in 2021, according to Dubai South’s e-commerce zone EZDubai and market research database Euromonitor International.
The report’s survey of consumers in the UAE showed that more made online purchases in 2021 than in 2020, with 75 per cent being regular online shoppers.
This rise was first seen amid the Covid-19 pandemic, when the market was valued at $3.9 billion in 2020 and accounted for 8 per cent of the country’s overall retail market, a 53 per cent year-on-year increase from 2019.
The growth was probably driven by the digital shift that accelerated during the Covid-19 pandemic in 2020, according to the International Trade Administration.
Also on the rise in the UAE is foreign e-commerce, with consumers seeking lower prices, wider product ranges and higher quality products that are unavailable locally. USA, India and China are the most in-demand markets.
Foreign e-commerce accounted for 23 per cent of the country’s overall e-commerce in 2019, and 26 per cent in 2021. The report estimates foreign purchases will comprise 32 per cent of the e-commerce market by 2025.
The report also projects the country’s e-commerce market will surpass $8 billion by then, thanks to the region having high GDP per capita.
The UAE tops the Middle East’s market with its GDP per capita exceeding $40,000 and internet penetration exceeding 90 per cent.
The report valued the region’s e-commerce market at $31.7 billion in 2021 and estimates it will grow 54.57 per cent to $49 billion in 2025.
The e-commerce rise can be attributed to the retail brands in the region with apps experiencing download surges of up to 70 per cent, according to global management consulting firm Kearney.
With the digital shift and steep growth of e-commerce in the region, consumers and retailers are increasingly reliant on online sales.
