E-commerce Market in the UAE: Projected to Surpass Dh48.8 Billion by 2028
The e-commerce market in the UAE is poised for significant growth, with projections indicating it will surpass Dh48.8 billion by 2028. This substantial increase reflects the vibrant and rapidly evolving digital landscape within the region. The UAE’s total e-commerce market size reached Dh27.5 billion in 2023, showcasing a robust upward trend and the potential for further expansion.
Tech-Savvy Populations and Government Support
The surge in e-commerce adoption in the UAE can be attributed to the tech-savvy Gen Z and millennial population. These groups are not only adept at navigating digital platforms but also drive demand for innovative online shopping experiences. Strong government support in terms of regulatory frameworks and substantial investments in digital infrastructure have further fueled this growth.
EZDubai, a dedicated e-commerce zone in Dubai South, has played a pivotal role in this development. The launch of the fourth edition of its ‘E-Commerce Report in the Mena Region 2023’ in collaboration with Euromonitor International highlights the ongoing transformation within the sector. Euromonitor International, renowned for its global business intelligence, market analysis, and consumer insights, provided valuable data underpinning this report.
Dominant Market Verticals
In 2023, the top three verticals in the UAE’s e-commerce market by value were:
- Apparel and Footwear
- Consumer Electronics
- Media Products
These categories have dominated the market, reflecting consumer preferences and spending patterns. The emphasis on mobile-based shopping has been a significant driver, with consumers prioritizing convenience and cost-effectiveness.
Payment Preferences and Mobile Shopping
A 2023 survey by Euromonitor International revealed that 93.2% of respondents preferred using credit and debit cards for online purchases, indicating strong confidence in traditional banking methods. Additionally, smartphones emerged as the preferred medium for online shopping, underscoring the importance of seamless, mobile-centric shopping experiences. This trend highlights the growing reliance on social media platforms for e-commerce activities.
Regional Growth in the MENA E-commerce Sector
The e-commerce sector in the b>MENA region continued its impressive rise in 2023, achieving a year-on-year growth of 11.8% to reach nearly Dh106.5 billion25%, reflecting strong online adoption over this period. Projections indicate that the MENA e-commerce market size will reach Dh183.6 billion by 2028.
Key Trends Shaping MENA E-commerce
Several trends are shaping the future of e-commerce in the MENA region:
1Omnichannel Adaptation: Consumers demand seamless shopping experiences across multiple channels.
2Digital Payments: There is a significant rise in digital payments and a shift towards payment apps.
3Membership Programs: The popularity of membership programs is on the rise, offering consumers additional value.
4Online Grocery Shopping: The expansion of online grocery shopping marks a notable change in consumer behavior.
Mobile Commerce Surge
Mobile commerce in the UAE and Saudi Arabia has seen substantial growth, with its value nearly quadrupling from 2018 to 2023. In 2023, the value of mobile commerce reached approximately Dh14.3 billion in the UAE and Dh16.1 billion in Saudi Arabia.
Insights from Industry Leaders
Mohsen Ahmad, CEO of the logistics district at Dubai South, emphasized the impressive growth of the region’s e-commerce industry. He noted that the sector is primed for further robustness due to widespread high-speed internet connectivity and favorable policies focused on developing digital payments and logistics infrastructure. The introduction of a new e-commerce law in 2023 by the UAE aims to enhance its digital economy by encouraging investment, protecting consumer rights, and fostering innovation.
Strategic Role of EZDubai
EZDubai was strategically designed to attract leading e-commerce companies and set a benchmark with its state-of-the-art infrastructure. Launched in January 2019 by HH Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, the e-commerce zone is located in the heart of the Logistics District of Dubai South. Its establishment aligns with the government’s vision to cement Dubai’s position as a hub for regional e-commerce.
Conclusion
The e-commerce market in the UAE is on a remarkable growth trajectory, driven by tech-savvy consumers, robust government support, and strategic initiatives like EZDubai. With projections indicating the market will surpass Dh48.8 billion by 2028, the UAE is set to solidify its position as a leading player in the global e-commerce landscape. As digital infrastructure continues to evolve and consumer preferences shift towards mobile and omnichannel shopping experiences, the future of e-commerce in the UAE and the broader MENA region looks promising.
