Middle Eastern countries are in a strong position to enable the development of e-commerce thanks to high GDP per capita and Internet penetration
The UAE’s e-commerce sector continued to show growth in 2021 based on the recent report launched by EZDubai, the fully dedicated e-commerce zone in South Dubai, in partnership with Euromonitor International, the world’s leading provider global business intelligence, market analysis and consumer insights. Total e-commerce in the UAE reached just over $5 billion in 2021 and is expected to surpass $8 billion by 2025.
According to the report’s findings, more consumers in the UAE made online purchases across all categories in 2021 compared to 2020, with an average of 75% of respondents usually shopping online. The fastest growing sectors by industry from 2021 to 2025 will be household goods and home furnishings, food and beverages, and media products.
Middle Eastern countries are in a strong position to enable the development of e-commerce thanks to high GDP per capita and internet penetration.
The United Arab Emirates and Qatar are in the strongest position, with GDP per capita above USD 40,000 and internet penetration above 90%.
Both countries have successfully introduced fiber to homes and have the highest active mobile broadband subscriptions in the region.
E-commerce in the MENA region is rapidly catching up with global powers, such as China, with many online retailers expanding their services during COVID-19; in 2021, the total market size was estimated at $31.7 billion. The expansion of e-commerce in the MENA region is mainly driven by high internet penetration rates, high ownership of digital devices, rising incomes, improved logistics advancements and the growing presence of global players and recognized that have brought variety and availability to local consumers. in the midst of the pandemic.
While the MENA region is primarily a cash-based economy, post-pandemic consumers quickly adopted credit and debit cards, driven by increased confidence and improved business operations. According to the report, in the UAE, credit/debit cards are the preferred method of payment.
Consumers in the UAE buy from cross-border retailers to access a wider range of products or seek lower prices or higher quality products not available locally. The United Arab Emirates also has affordable shipping costs for consumers looking to purchase from outside the region. The main countries that consumers in the UAE buy from are the United States, India and China and are often linked to clothing and footwear as well as beauty and personal care. Foreign e-commerce (UAE consumers buying from outside the country) is growing rapidly, from 23% of total e-commerce sales in 2019 to 26% in 2021; this figure is expected to increase to 32% in 2025.
The MENA region is an active region in attracting local and international investments in e-commerce. With the current pace of developments and growing consumer preference for online retail, the region will experience e-commerce growth of over $18 billion in absolute terms over the period 2021-2025, reaching over $49 billion. dollars in 2025.
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In his comments, Mohsen Ahmad, CEO of Logistics District – Dubai South, said, “We are delighted to launch the second e-commerce report in partnership with Euromonitor and to share the latest industry insights with our stakeholders. -The commerce seen in the UAE and the MENA region encourages us to work ever more closely with our e-commerce players to energize the sector, so that the emirate’s e-commerce market becomes a global power. as well as the services and solutions we tailor for our clients to achieve their goals, are key factors in advancing the industry. At EZDubai, we will continue to meet the growing demand that comes with the growth of online shoppers and penetration of the internet.”
Hussein Doughan, Managing Director of Euromonitor International in Dubai, said: “The launch of the second MENA e-commerce report is due to several factors, among them the growth of the e-commerce sector which reached more than 31 .7 billion. in 2021. We are delighted to present the report in partnership with EZDubai and provide industry players with a solid understanding of key opportunities in the e-commerce industry through market growth performance, key success factors and analysis categories.
EZDubai was designed to attract leading e-commerce companies and create a benchmark with its infrastructure. The e-commerce zone, which was launched in January 2019 by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the United Arab Emirates and Ruler of Dubai, aims to promote the emirate’s position as regional e-commerce hub.