E-commerce spending in the UAE grew at double the rate of point of sale (POS) transactions in the first quarter of 2022 compared to the same quarter last year, according to a latest market report.
The rise in online spending – which includes both debit card and credit card transactions – was led by digital payments in the government sector, followed by restaurants, supermarkets and convenience stores – the latter together accounting for more than 45 percent of the total spend volumes, Network International, enabler of digital commerce across the Middle East and Africa (MEA), said in its report.
With the accelerating demand for cashless payments in the ongoing Covid-19 pandemic, overall card spends in Q1 2022 saw a double-digit increase over the same quarter in 2021.
“As e-commerce sales continue to rise, it is evident that the growth in spending is coming not just from buyers shifting from physical outlets to online shopping, but rather from buyers shifting more of their spending from cash to digital,” Ian Jiggens, Group Head, Advisory and Information Services, Network International, said.
Digital payments are at the forefront of some of the most interesting applications of new technologies, and merchants need to prioritise both the tools and the use of data to help them continue adapting to changing market dynamics, Jiggens added.
The total number of cards transacting online also climbed by 32 percent, indicating a permanent shift in consumer behaviour post-pandemic and higher dependence on digital commerce, Network International said.
“This growth was driven by low value and mid-value spending cards signalling a shift in payments behaviour among segments which previously primarily transacted in cash or where card spending was moderate,” the report said.
Further, the number of debit cards transacting during the quarter grew at one and half times the number of credit cards.
Spending by low value and mid-value spending credit cardholders increased at a higher rate than spending by the highest spending consumers.
Online debit card spending at supermarkets also grew by 36 percent in comparison to online credit card spends that grew by 20 percent.
Network previously reported that UAE residents spent more when they did their supermarket shopping online after the Covid-19 lockdown restrictions, as compared to when they made their purchases at an outlet.
“Continuing this trend from 2020, supermarkets witnessed a nearly double digit jump in average card spends for e-commerce while POS spending stayed the same. Meanwhile, debit card spending at physical supermarkets outlets grew at 5 percent, in comparison to credit cards for which spend volumes were flat,” Network International said.
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