The UAE online shopping market will generate revenue of $17.2 billion by 2027, with an estimated annual growth rate of 8.4 percent over the next four years.
Middle East B2B e-marketplace Tradeling has reported a remarkable growth in the MENA region, with the UAE emerging as a standout market.
The country’s online shopping market has attracted substantial investments, acquisitions, and partnerships with international corporations, ranking it 27th globally in terms of capabilities.
Between 2018 and 2022, online shopping sales in the UAE were projected to grow by an average of 23 percent per annum. The COVID-19 pandemic has been a catalyst for this growth, accelerating the country’s digital shift and positioning it as a leader among GCC nations in e-commerce. In 2019, online shopping in the UAE amounted to $2.6 billion in sales, which increased by 53 percent to $3.9 billion in the following year and reached $4.8 billion in sales in 2021, reflecting an 84.6 percent surge over two years.
“While traditional brick-and-mortar stores are still going strong, they are gradually being phased out to become a thing of the past. The convenience of online shopping has been on full display in recent years with e-commerce spearheading an ‘out with the old and in with the new’ mindset,” said Marius Ciavola, CEO, Tradeling.
Nearly all of the UAE population has access to the internet and mobile phones, which fuels 70 percent of e-commerce transactions. As a result, the Dubai Chamber of Commerce and Industry predicts that e-commerce in the UAE will generate $8 billion in sales by 2025, with positive spillover effects on the broader MENA region. Despite the global trend of declining online sales after the pandemic, online shopping sales in the MENA region rose by 21 percent, generating $25 billion in revenue last year.
The UAE’s online market is estimated to include around 1.5 trillion people, making it the world’s fastest-growing e-commerce market in 2022.
“Since the UAE began digitalising its economy in 2013, immense progress has been made in leaps and bounds across all sectors. E-commerce in particular is demonstrating this, as there is a proliferation of digital wallets, an increasing number of individuals are embracing the idea of a cashless society, and the vast purchasing power of the UAE’s approximate population of 10 million is being realized. With that said, the industry is poised to continue growing via investment and partnerships to highlight one simple fact: the future is now,” said Ciavola.
A recent policy change by Dubai Customs is also expected to stimulate further growth in e-commerce. Residents and citizens in the UAE will pay less for online shopping, as goods valued below AED 1,000 are exempt from tax fees, up from the previous threshold of AED 300 announced in January. This move is expected to make online purchases between AED 300 and AED 1,000 more affordable.
