Q1 sees growth in UAE e-commerce

E-commerce point-of-sale transactions in the first quarter of this year have doubled from the same quarter of last year, according to the latest report by Network International, digital commerce solutions firm operating in the Middle East and North Africa.

Among the most popular online sites were those of supermarkets and convenience stores, which, alongside government sectors and restaurants, accounted for 45 per cent of total spend volumes.

Debit and credit card spending on e-commerce sites grew by 32 per cent during this period.

The report attributed the rise to increased popularity of cashless payment and consumer reliance on digital commerce that began amid the Covid-19 pandemic.

“As e-commerce sales continue to rise, it is evident that the growth in spending is coming not just from buyers shifting from physical outlets to online shopping, but rather from buyers shifting more of their spending from cash to digital,” said Ian Jiggens, group head of Network International’s advisory and information services division.

The UAE e-commerce market will continue to see such consumer behaviour in coming years, said the report.

The country saw a marked shift in card spending for low-value and mid-value purchases. Previously, cash payments were consumers’ preferred payment method for such purchases, with card payments reserved for high-value purchases.

From the first quarter of last year to the first of this year, across all retail categories, debit card spending grew 1.5 times more than credit card spending.

Although point-of-sale transactions have remained steady since 2020, supermarkets have seen a double-digit increase in average debit and credit card online purchases.

On supermarkets’ e-commerce sites, debit card spending grew by 36 per cent with credit card spending growing by just 20 per cent.

Since the Covid-19 pandemic reached the UAE in 2020, UAE residents have spent more on online supermarket shopping than in-store supermarket shopping, according to earlier reports by Network International.

While in-store supermarket debit card spending has grown by 5 per cent since 2020, credit card spend volumes have remained the same.

Online low-value and mid-value purchases by credit card holders increased at higher rates than high-value purchases.

Mr Jiggens added, “Digital payments are at the forefront of some of the most interesting applications of new technologies and merchants need to prioritise both the tools and the use of data to help them continue adapting to changing market dynamics.”