The UAE e-commerce market is poised to generate $17.2 billion in revenue by 2027, experiencing an annual growth rate of 8.4 per cent through the next four years, according to Middle East’s B2B e-marketplace Tradeling.
E-commerce sales in the UAE were estimated to grow by an average of 23 per cent per year between 2018 and 2022. The lockdown period catapulted this trend as it ushered in the country’s digital shift and positioned it as an e-commerce leader among GCC countries; as a result, the country’s online shopping reached $2.6 billion in sales in 2019.
Its market grew by 53 per cent and recorded $3.9 billion in sales the following year before hitting $4.8 billion in sales in 2021, reflecting an 84.6 per cent increase over the two previous years.
CEO of Tradeling, Marius Ciavola, said: “While traditional brick-and-mortar stores are still going strong, they are gradually being phased out to become a thing of the past.
“The convenience of online shopping has been on full display in recent years with e-commerce spearheading an ‘out with the old and in with the new’ mindset. Since the UAE began digitalising its economy in 2013, immense progress has been made in leaps and bounds across all sectors.”
Internet connectivity
Almost 100 per cent of the population has internet connectivity and mobile phone access – and this is what fuels 70 per cent of e-commerce transactions. The Dubai Chamber of Commerce and Industry forecasts e-commerce in the UAE to generate $8 billion in sales by 2025.
The benefits of this strong trajectory have bolstered regional retail at large. Despite signs of a global slowdown trend in online sales post-lockdown, Mena e-commerce sales jumped by 21 per cent to reach a whopping $25 billion in revenue last year.
With the UAE ranking as the fastest-growing e-commerce market in the world last year and its online population estimated at approximately 1.5 trillion people, the current momentum will be sustained.
Customs incentives
Complementary to this, a recent change announced by Dubai Customs is bound to further boost e-commerce growth as residents and citizens within the country will pay less when shopping online.
“E-commerce in particular is demonstrating this, as there is a proliferation of digital wallets, an increasing number of individuals are embracing the idea of a cashless society, and the vast purchasing power of the UAE’s approximate population of 10 million is being realised,” added Mr Ciavola.
“With that said, the industry is poised to continue growing via investment and partnerships to highlight one simple fact: the future is now.”
