The UAE digital sector, projected to grow at a compound annual growth rate of over 16 per cent for the next six years, is drawing international brands to the Mena region, according to the latest report by RedSeer research.
The $1.5 trillion Mena consumer spending market, driven by factors including strong demand, infrastructure and accessible funding, holds an immense appeal for overseas companies.
“Companies and brands can commence the ride on the journey starting at $100 billion now to unlock the potential of an over $500 billion digital economy in the Mena region by 2030,” the study said.
However, the report cautioned companies and investors that the UAE market needs a customised approach to conquer: “Unveiling this paradigm holds the key,” RedSeer said.
The UAE, powering around 30 per cent of the $111 billion Mena digital economy, makes the market extremely lucrative for e-commerce and several other burgeoning sectors.
UAE digital economy is changing
RedSeer noted that the UAE market is currently seeing significant transitions unfolding.
“The shift from [digital] products to [digital] services, evolution from B2C to B2B platforms, and finally, the emergence of Gen Z as a dominant force is among the significant transitions unfolding in the UAE market currently.
“By 2030, Gen Z is expected to contribute a substantial 30 per cent of e-commerce spending,” the study projected, adding that consequently, it is imperative to strategise and tailor solutions to cater to this emerging cohort.”
While established sectors like online retail remain crucial, emerging sectors such as fintech smart logistics are poised for rapid growth:
“In the coming years, B2B platforms in areas like agritech, SaaS and logistics will gain momentum”, the study projected.
“High level of digital enabler penetration and online time spent will help several e-commerce sectors including online retail, travel and food delivery to scale up rapidly in Mena over the coming years,” said RedSeer.
In the coming years, the UAE’s digital sector will catapult the growth of sectors including B2B, the report predicts.
“The potential for digitising the B2B value chain, encompassing both upstream and downstream segments, is also significant. Besides, the manufacturing sector also is expected to thrive, aligning with the government’s push to amplify manufacturing output in the nation.”