The value of the UAE e-commerce market is expected to reach $9.2bn in 2026 according to analysis by the Dubai Chamber of Commerce.
E-commerce sales in the UAE reached $4.8b during 2021, compared to $2.6bn in 2019 as Covid pandemic accelerated a global shift towards online shopping.
The study, based on data from Euromonitor highlighted several factors boosting e-commerce activity in the UAE, as well as high-potential growth opportunities.
Mobile devices were used for the majority of e-commerce transactions last year as smartphones and tablets were used in the retail market to drive $2.6bn in sales, accounting for 44 percent of the total e-commerce market value.
Mobile retail sales are expected to record a compound annual growth rate of 15.6 percent over the 2022-2026 period to reach $4.6 billion.
UAE e-commerce above global average
It is estimated that more than one-third of consumers in the UAE bought a product or service using their smartphone at least once a week, which is above the global average of weekly online purchases.
Loyalty reward schemes offered by online retailers and pricing transparency offered my mobile apps are supporting the strong growth.
Local retailers are attracting shoppers in the UAE more than international sites, with domestic online shopping sites accounting for 73 percent of total sales.
However, the report states foreign e-commerce platforms are expected to grow at a greater rate and mark a 34 percent gain in market share by 2026.
Improved payment systems and services were identified as a crucial factor that has boosted demand and business activity within the UAE’s e-commerce sector.
The number of Arab youth saying they shop online has nearly doubled in five years, and almost all young GCC citizens say they shop via a social media app or website at least a few times a month, according to the 14th Annual ASDA’A BCW Arab Youth Survey, published last month.
Consumer’s love of gadgets has taken the electronic’s market to the top of online shopping charts with a 34 percent share, ahead of apparel and footwear (31 percent), food and beverages, (12 percent) and media products (8 percent).
Further down the list personal accessories accounted for 5.8 percent, and consumer appliances 3.3 percent.
Fashion online shopping potential in UAE
The Dubai Chamber report highlighted apparel and footwear, personal accessories, beauty and personal care and home and gardening as being among the product categories offering the most untapped potential in the e-commerce market in 2022.
Growth momentum within the UAE’s e-commerce sector is expected to continue, supported by rising demand for online shopping, and steady investment flows in the sector’s infrastructure.
“The increasing momentum of e-commerce activity in the country is expected to provide more business opportunities in payment systems, financial technology, electronic logistics and distribution centres,” Dubai Chamber said.
Last month US-based visual messaging giant Snap Inc. unveiled new shopping and fashion features using augmented reality (AR), with users now set to be able to try on and purchase products through the app.
Earlier this year e-commerce platform Noon announced it would buy online fashion platform Namshi, owned by property developer giant Emaar, for $335.2m.
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