UAE online spending forecast to reach $9.8bn by end-2018

Report issued by PayPal and Ipsos reveals 81% of adults in UAE shopped online in the past 12 months, up from 68% in 2016
UAE online spending forecast to reach $9.8bn by end-2018
By Sam Bridge
Sat 01 Sep 2018 12:09 AM

Overall online spending continues to grow in the UAE and is forecast to reach AED36 billion ($9.8 billion) by the end of 2018, according to a joint report issued by PayPal and Ipsos.

The Fourth Annual Cross-border Commerce report, which tracks online domestic and cross-border shopping habits of approximately 34,000 consumers in 31 countries, also revealed that 81 percent of adults in UAE shopped online in the past 12 months, up from 68 percent in 2016.

According to the report, the increase in online spending is also forecast to continue, with almost half of online adults surveyed in the UAE stating they will increase their online spending in the next 12 months.

The report also revealed that cross-border online shopping is on the rise in the UAE with 61 percent of UAE online shoppers saying that they shopped online from websites in another country in the past 12 months – a growth of 33 percent from the previous year.

In fact, 12 percent of online shoppers surveyed stated that they only shop online in stores and marketplaces located outside the UAE. Cross-border shopping has grown by an estimated AED1.6 billion since 2016, accounting for an estimated AED12.5 billion of all online spend in 2017.

“The UAE’s commerce revolution is well underway and, backed by the country’s diverse and truly global population plus improving logistics services, consumers are increasingly looking internationally to source their favorite products and services,” said Efi Dahan, general manager, Eastern Europe, Middle East and Africa at PayPal.

“In today’s global society, consumer spending behavior is increasingly being dictated by convenience and value. Our findings showcase this, with with just over half of the online shopppers surveyed stating that it was not important to them if the retailer was based overseas.”

With high rates of mobile penetration in the UAE, online shoppers are increasingly opting to make purchases on their mobile devices. Mobile spend is forecast to grow 26 percent between 2018 and 2019 to reach close to AED20 billion, with momentum expected to continue into 2020 with a further 25 percent growth.

“With some of the highest levels of smartphone penetration globally, it is unsurprising that the smartphone is the device of choice for online shopping in the UAE,” said Dahan.

The report said clothing, footwear and apparel was the most common cross-border purchase category in the UAE in the past 12 months, followed by cosmetics and beauty products.

It also showed that the US was the most popular cross-border online shopping destination, with UAE shoppers spending an estimated AED2.1 billion on purchases from US websites in the past 12 months, followed by India and China.

For all the latest retail news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.

Subscribe to our Newsletter

Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.