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E-commerce transactions in the UAE are forecasted to total $16 billion (Dh59 billion) in 2019 and grow 23 per cent annually between 2018 and 2022.
The current online sales in the Middle East are approximately 2% of the overall retail sales leaving an enormous unexploited prospect for e-commerce players. Since acquisition of Souq.com by Amazon the online market has seen a new confidence among the customers. Traditional retailers are now focusing more on providing their customers with an additional intricate online retail platforms to expand their market revenues. Carrefour, Lulu Group, Jumbo, Sharafdg, Virgin and Ace are all among the online sellers besides nearly all major brands which have online presence.
UAE tops the “Top 10 developing and transition economies in the UNCTAD B2C E-commerce Index 2019, by region” report by UNCTAD. While worldwide it improves its position from 33rd to 28th in 2019, showing the commitment of government in resounding the trust of investors and customers.
- Government strategies
UAE’s E-commerce Strategy has developed tremendously over last couple of years, sending a strong message to foreign investors regarding the intent of government to support E-commerce as an integral part of its developmental policy. Dubai government launched its E-commerce strategy in September 2019, which primarily aims to increase the contribution of e-commerce to Dh12 billion in the local economy by 2023, and increase regional and global share of e-commerce companies operating in Dubai to Dh24 billion by 2020. Such goals will be achieved by reducing the total cost of e-commerce operations by 20 per cent — including the costs of returned goods, storage, customs duties and VAT on transportation. (Gulf News)
- High digital penetration
There are 9.73 million active internet users which makes around 98.98% penetration, including 9.06 million mobile internet users 92.17%. UAE residents also are among the top 10 globally when it comes to spending time on the internet and social media, average time spent on mobile devices is 3 hours 55 minutes while total online users including broadband, spend around 7 hours 3 minutes. (Global Media Insight). The ease of access to internet together with optimum costs has made the e-commerce to be the choice for majority.
- Trust in digital payments
Visa-DED security survey that scrutinizes consumer perception of digital payments and online shopping, has shown 84% per cent of respondents trust online shopping and 73% per cent preferred online payments. (VISA Middleeast). This trust is built on heavy investments by telecom and banking sectors in security and updates, ensuring customers their protected transections.
- Improved logistics
Logistics is the backbone for any industry. UAE over the last decade has immensely developed its logistics and facilities becoming the focal hub for major global shipments. Development of ports in Abu Dhabi (Zayed and Khalifa ports), Dubai (Jebel Ali and Dubai International Airport, Port Rashid), Fujairah and Khorfaqan ports have all world standard facilities.
Photo by Andrea Piacquadio from Pexels