- October 18, 2022
- Posted by: Waqas Siddiqui
- Category: Business & Economy
UAE’s E-Commerce sector Growth – 2021
According to a Dubai Chamber of Commerce report, United Arab Emirates (UAE’s) e-commerce market was estimated to be AED 16.7 billion in 2021. When compared to 2019, the value increased by 85%, from AED 9.5 billion in 2019 to AED 16.7 billion in 2021. Moreover, the e-commerce sector is forecasted to reach AED 33.8 billion in 2026 with the estimated total retail sales in the UAE expected to reach 12.6% by the same year.
Several factors boost the e-commerce activity in the UAE. This includes the growth in smartphone and tablet usage in the country. Both make up the most transactions in 2020 accounting for 44% of the total e-commerce market value. The growing number of loyalty rewards programmes offered by online retailers also drove up the demand for online shopping in the UAE.
Consumer electronics in the UAE constituted the top-selling online products in 2021 with a 34% share, consisting mainly of smartphones, phone accessories, computer accessories, tablets, computers and TVs.
Among the main product categories offering the most untapped potential include apparel and footwear, personal accessories, beauty and personal care. Apparel and footwear accounted for 31%, food and beverages 12%, media products 8%, personal accessories 5.8%, and consumer appliances 3.3%. Being one of the top marketing research firms in United Arab Emirates, we believe that e-commerce sector is full of growth potential for investors.
UAE Mobile E-Commerce Segment
Mobile retail sales are expected to record an annual growth rate of 15.6% over the 2022-2026 period to reach AED 16.9 billion (USD 4.6 billion). One of the major factors supporting the strong growth in mobile e-commerce transactions includes the availability of apps, which has increased pricing transparency. Key trends supporting the strong growth in mobile e-commerce transactions include the availability of apps, which has increased pricing transparency.
More than 33% of consumers in the UAE purchased a product or service using their smartphone at least once a week, which is above the global average of weekly online purchases. Shoppers in the UAE preferred local retail websites to overseas retailers. In 2021, domestic e-commerce websites accounted on average for 73% of the total sales while foreign websites received only a 27% share.
Investments in the UAE E-Commerce Segment
Investments in the e-commerce sector have significantly changed the dynamics of the UAE market, primarily due to the decrease in pricing because of the increased competition and supply. It is estimated that between the years 2022 and 2026, foreign e-commerce platforms are expected to grow by 19.2% which would mark a 34% gain in market share.
The improvement and modernization of payment systems and services were identified as another key factor that has boosted demand and business activity within the UAE’s e-commerce sector. The increasing momentum of e-commerce activity in the UAE is expected to provide more business opportunities in payment systems, financial technology, electronic logistics, and distribution centers.
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