Domestic card spending in the UAE increased by 12 percent in the first quarter of 2016 compared to the same period last year, according to a report by Network International.
The payment solutions provider said that based on credit and debit card transactions in the UAE, spending continues to show strong growth along with the rest of the countries in the GCC where spending increased by 3 percent.
The report said overall card spending in the country increased by 7 percent, largely due to the influence of regional consumers while e-commerce card spending grew by 27 percent.
Bhairav Trivedi, CEO, Network International, said: “Domestic card spenders in the UAE continue to remain the most positive influence on the economy’s growth.
"With increased card spending seen from the GCC countries, savvy retailers should continue to gear their marketing strategy toward regional consumers’ attitudes and preferences as they emerge to be the largest target market for the country’s business owners.
"Additionally, online spends have increased more than ever before and represent the changing shopping preferences of customers in the country. Retailers will have to adopt to these shifting patterns and expand their online offerings to take full advantage of the growth potential of e-commerce.”
Network International’s Q1 report also found that overall tourism spending declined by 6 percent in the UAE.
Due to a continuous appreciation in the US dollar along with a bullish global economic outlook and a fall in the prices of crude oil, the largest declines came from China (26 percent) and Russia (24 percent).
Overall card spending from Europe and North America decreased by 3 percent and 5 percent respectively, the report said, although Finland (28 percent), United Kingdom (15 percent), and Ireland (15 percent) all posted increases.
According to the report, the most promising sector in the UAE is the F&B industry with increased domestic card spending of 19 percent and overall card spending increasing by 17 percennt.
It added that the UAE's luxury retail market took the largest hit in the first three months of 2016 with a decline in card spending of 15 percent due to the decline in Chinese (52 percent) and Russian (42 percent) spending in this sector.
There was also a significant decline in card spending by United States (32 percent) and Saudi Arabia (29 percent) while a modest decrease in domestic card spending of 5 percent softened the impact overall.
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.