Residents in the UAE spend on average $400 per month each (£311 or AED1,500) on internet shopping – but more than half of their purchases come from overseas vendors, according to a new study.
The report, ‘Retail's Top Global Hotspots – mapping your fast track to international growth’, said that 58 percent of products bought online in the UAE are from overseas retailers, suggesting a preference for them over local e-commerce operators.
However, this was not the case for food products, the report said. A quarter (25 percent) of food products available in the UAE are produced within the country, the study said.
What is more, retail remains a predominantly bricks-and-mortar business in the UAE – despite a nascent e-commerce sector forecast to grow to $10 billion by 2018 – the report argued.
Addleshaw Goddard, in association with Retail Week, analysed the retail environments of five countries around the world - China, India, the US and the UAE - and examined the buying patterns of consumers in each.
Lowri Llwyd, Dubai-based associate at Addleshaw Goddard and member of the firm’s Retail & Consumer Group, said: “The UAE is a really interesting growth area for retailers – bricks and mortar is still the preferred way for consumers to shop in the UAE.
“However, we are slowly seeing a number of clients exploring options beyond the shop front and looking to a digital future.
“The region is moving towards creating a sustainable online shopping and delivery platform as there is an appetite to grow, develop and succeed.”
The report also includes case studies of UK global retailers who have gone on to build successful operations in each country – House of Fraser in China, Cath Kidston in India, AO.com in Germany, Topshop and Primark in the United States, and M&Co in the UAE.
Nigeria and the ‘Stans (which includes emerging economies such as Kazakhstan and Azerbaijan, as well as less developed nations such as Uzbekistan and Tajikistan) are singled out as the next ‘hot spots’ where global retail companies are likely to focus, as these countries open themselves up to business is using wealth generated from natural resources.
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