The UAE’s business-to-consumer e-commerce is expected to grow by 15 per cent this year, business intelligence company Research and Markets said.
This reach US$30.7 billion in 2023, recording a CAGR of 11.2 per cent in the next four years.
The country’s B2C e-commerce gross merchandise value will reach $46.8 billion by 2027.
Apparel, footwear, personal care and beauty are among the different categories that are showing strong growth potential over the next few years, the company added.
Booming logistics sector
Firms are also investing in warehouses to serve the growing e-commerce market in the UAE.
On Tuesday, Amazon opened a logistics facility in Dubai.
Located in Logistics District in Dubai South, the centre has a storage capacity of 2.1 million cubic feet spread across 350,000 square feet.
This is expected to increase Amazon’s total storage capacity in the UAE by 70 per cent, the company said.
Ronaldo Mouchawar, vice president of Amazon Mena, said: “At Amazon, we continue to emphasise our focus on providing the best and fastest selection of products to our customers in the UAE.”
Amazon currently has three warehouses in the UAE, apart from three sorting centres, eight delivery stations and a network of small and medium businesses working as delivery service partners.
In November last year, Noon, the Dubai-based online marketplace signed an agreement with the Abu Dhabi Investment Office to build the largest warehouse in the country.
It will enable both domestic and international brands to reach their customers across the Middle East, Europe, and Asia.
The 252,000-square-meter facility will serve the growing e-commerce market and is scheduled to open next year.
Amazon, Namshi, Noon and Sharaf DG remain the UAE’s top e-commerce platforms, the company added.
Going local
Amazon recently announced it will host products from 100,000 businesses, including local SMBs, on its UAE website Amazon.ae by 2026.
Localisation will play a pivotal role in unlocking the e-commerce growth potential for global brands, Research and Markets added.
Domestic e-commerce firms accounted for the majority of the total sales last year.
This shows that homegrown retailers have a competitive edge over international competitors.
“With the trends projected to be similar in 2023, localisation will play a pivotal role for global brands that are seeking to unlock growth in the UAE market,” Research and Markets said.
“Many of the global brands have already partnered with local players to benefit from their knowledge, expertise, and regional presence. Over 120 brands have partnered with [UAE retailer] GMG as they seek to drive their growth and presence in the Middle East market.
“With the retail sector in the UAE differing from that of the West, especially from a social and cultural viewpoint, partnering with local firms and seeking localisation will remain an important strategy for most global players over the next three to four years.”
