Eighty-eight per cent of retailers consider the UAE a great place to operate a business, according to a survey by online retail management company Uplo.
Commissioned through YouGov, the in-depth study involved more than 100 retail leaders.
Strong optimism was noted amongst 73 per cent of the retailers interviewed who are hoping to increase revenue and profits this year.
Nearly half of the participants suggested that their online retail operations are growing at a whopping rate of 20 per cent or more per year.
Chief visionary officer and co-founder of Uplo, Nicolas Bruylants, said: “2023 looks set to be a record year for online retail across the region, with this survey indicating that retailers are seeing rapid growth that is far outstripping many global markets.
“E-commerce across Mena is bucking the global trends of inflation and supply chain disruptions, instead showing remarkable resilience.
Estimates from the Dubai Chamber of Commerce suggest that e-commerce will grow from $4.8 billion (in 2021) to $9.2 billion in the UAE by 2026, supporting the attitude of the retail poll.
“Nations like the United Arab Emirates and the Kingdom of Saudi Arabia are developing world-class e-commerce processes,” added Mr Bruylants.
“Through investment in technology, infrastructure and talent, we are at the point where the region is starting to leapfrog other countries around the world in terms of the speed, convenience and efficiency of the e-commerce offering.”
On the flipside, the report highlights some challenges that retailers are facing. For example, 61 per cent admitted that competition from online rivals is tough, while more than half found it challenging to manage profitability with the fine margins required for success.
Nearly six in 10 business leaders find managing online retail payments daunting.
When it comes to payment options, despite strong demand for BNPL, nearly two-thirds of online retailers in the region do not offer the service.
The retail sector seems to be at a tipping point for using artificial intelligence and machine learning, with a 50-50 split for those businesses that are using such tools and those who refrain from it, Uplo revealed.
Overall, Uplo’s research indicates that Mena is the fastest-growing e-commerce market in the world, with average household spending on e-commerce exceeding $2,500 per year in the UAE alone.