UAE e-commerce deals set to hit $16bn in 2019

New study says average size of e-commerce transactions in the UAE in 2018-2019 was $144
UAE e-commerce deals set to hit $16bn in 2019
By Sam Bridge
Fri 09 Aug 2019 12:21 AM

The UAE is the most advanced e-commerce market in the Middle East and North Africa, according to a joint study by Dubai Economy and digital payment solutions leader Visa.

It estimates e-commerce transactions in the country to hit $16 billion in 2019 and grow 23 percent on average annually between 2018 and 2022.

The report showed that while consumer preference for e-commerce channels in the UAE is nearly at par with mature benchmark markets, the country has a healthy lead in average transaction size compared to both emerging and mature markets.

The average size of e-commerce transactions in the UAE in 2018-2019 was $144 compared to $79 in mature markets and $26 in emerging markets.

Deeper internet penetration along with an advanced digital infrastructure and younger population eager to embrace technology-driven solutions available across smart phones and social media are at the core of the e-commerce growth in Dubai and the UAE, it said.

At 4.2 percent of total sales, e-commerce penetration in the UAE is not only higher than the MENA average of 1.9 percent and GCC average of 3 percent, but also highest in the region, it added.

The report also said that increasing consumer reliance on food delivery apps and ride-hailing apps helped both quick service restaurants and transport sector raise their e-commerce share from 1 percent to 2 percent during March 2018 and February 2019.

The study underlines initiatives, such as the Dubai Smart City, tech-eager consumers and a favourable ecosystem promoting startup growth as the chief factors that have positioned Dubai and the UAE in the forefront of the e-commerce growth in MENA.

While MENA remains the fastest growing e-commerce market globally, government adoption of e-commerce payments on platforms such as Dubai Smart City and exponential growth in categories such as quick service restaurants and transportation enable the UAE to maintain a clear edge in online payments within the region, the report noted.

Sami Al Qamzi, director general of Dubai Economy, said: Public-private partnerships to drive awareness and trust on the value, convenience and security of online shopping and expand the digital payment option are critical to sustaining the e-commerce momentum that Dubai and the UAE have gained through promoting cashless payments and providing secure payment platforms for businesses and the public."

Global e-commerce leaders, such as Amazon, expanding to Dubai is a strong testament to the emirate’s competitiveness as a digital innovation hub, Al Qamzi added.

Marcello Baricordi, Visa’s general manager for Middle East and North Africa, said: “By growing the e-commerce sector in the UAE, there is a tremendous opportunity to drive economic growth and extend the benefits of digital payments to residents and businesses in the country.

"We are particularly buoyed by the policies of the government that encourage innovation on a level playing field and through open dialogue. In addition to e-commerce, we are also working with our government partners on growing mobile and contactless payments.”

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