UAEs Retail E-Commerce Marketplace worth touches out record breaking $3.9bn during the preceding year 2020

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Story Highlights

  • As according to the Dubai Chamber of the Commerce and Industry, the progression was powered out via an online shift within the Clientele procuring habits within the Covid-19 Pandemic.
  • The overall worth of the UAEs retailed E-Commerce marketplace had aroused 53 percent to a record breaking $3.9 Billion within the preceding year 2020, majorly powered by the digital shift within the client’s procurement habits amidst the COVID-19 Pandemic.

 As according to the Dubai Chamber’s study, and backed by the overall data from the EuroMonitor, anticipated the overall marketplace worth of the online retail E-Commerce marketplace to touch a whopping $8Bn within the year 2025. The progression will be aided by huge incomes, huge cyberspace penetration, advanced transport logistics, modern digital payment systems, a tech-savvy youth and robust government provision.

As per the report, it added out that; the E-Commerce will do account in for an 8 percent UAE’s overall retail marketplace the preceding year.

As per the research done from Bain & Company as well as the Google, the E-Commerce sales within the Middle East as well as North African territory are headed to triple for $28.5 Bn the forthcoming year, and from $8.3Bn in 2017.

Dubai Airport Freezone Authority (Dafza) tossed the initial phase of Dubai CommerCity, a Dh3.2bn ($871.1 million) steadfast e-commerce free zone in Umm Ramool, in April this year to knock into the swiftly mounting e-commerce segment in the territory.

The UAE E-Commerce segment was accountable for the maximum number of licences (196) in May the preceding year, according to data from the UAE National Economic Register.

Online procurement became more prevalent post the governments across the global scenario familiarized movement limitations to halt the spread of the Covid-19 pandemic.

With the UAE approving the maximum smartphone penetration rate in the MENA territory, the share of the smartphone commerce boosted to 42 percent in 2020 from 29 percent in 2015, the study stated.

“In 2020, the value of the UAE’s retail m-commerce market reached $1.6bn, 56 per cent higher than the previous year. The UAE’s retail m-commerce market is projected to reach $3.9bn by 2025 and grow at a CAGR [compound annual growth rate] of 18.9 per cent between 2020 and 2025,” the report added.

As according to the Dubai Chamber, “Apart from picking, packing and delivery cost, one of the biggest costs is high returns of products. Experts have found that people return 15 per cent to 40 percent of what they buy online, compared with 5 percent to 10 percent for in-store shopping.”

The report founded out that; Although challenges, such as cash on delivery, persist in the UAE e-commerce market, the share of this payment method shrank slightly during the Covid-19 pandemic due to hygiene measures and the development of contactless payments.

Other hurdles include huge expenses faced by online retailers.

The report also stated out that; “However, product returns are expected to decline with “improvements of online product details, customer support and visualisation.”

Meanwhile client expenditure in the UAE is anticipated to nurture 3 percent this year to $146bn, before garnering up pace to a CAGR of over 4.3 percent over the forthcoming five years to $175bn, according to Euromonitor.

The clothing and footwear segment described the maximum share (33 percent or $1.3bn) of the UAE’s retail E-Commerce marketplace in 2020.

Consumer electronics reported for 31 percent ($1.2bn) of the market. In this segment, demand was huge for laptops, private computers and tablets due to remote operations and online education during pandemic-induced drive restrictions, according to Dubai Chamber.

The chamber also stated out that; Retail E-commerce sales of food, drink and consumer electronics merchandizes recorded triple-digit progress during the Covid-19 pandemic, according to Euromonitor. Other merchandize categories which logged more than 50 percent progression in sales include beauty and personal care, pet care, and apparel and footwear.

The swiftest-nurturing merchandize in the UAE E-Commerce marketplace is anticipated to be individual accessories and eyewear, with a CAGR of 20 percent from 2020 to 2025, followed by media products, pet care and home care products, the report founded it out.

The Chamber as well as stated out that; “E-commerce trends expected to gain momentum with consumers include quicker, safer, more intuitive and personalised experiences, voice-activated shopping, contextual and social commerce, virtual instant reordering and product subscriptions combined with conveniences such as same-day delivery and competitive pricing.”

Food and drink reported for 11 percent ($400m) of the UAE Retail E-commerce marketplace the preceding year.


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