The UAE and the UK have always had a close relationship – over time this has transformed from political ties to a relationship that’s increasingly focused on trade. The UAE has rightly been seen as a gateway to the wider GCC and MENA region. However, it’s easy to forget that it has a vibrant and growing domestic market of its own.
This market has traditionally been heavily reliant on imports; the UAE imported GBP 191.2 billion worth of products in 2018. However, as the government here tries to stimulate domestic production, its imports have waned – there was a 35% drop, to GBP 123 billion in 2020. The UK’s imports to the UAE have similarly dropped during this period – from GBP 7.3 billion in 2018 to GBP 4.4 billion in 2020. This accounted for 2% of the UK’s total global exports, and 1.5% in 2020.
Despite these waning numbers, there is still opportunity. Some of this reduction is a result of supply chain and broader economic disruption caused by the Covid-19 pandemic, but the broader recalibration of the global economy has also driven this change. The goods that were in vogue even two years ago are not necessarily what economies need now.
Some of these opportunities might seem trivial; the ITC’s Export Potential map suggests four main areas of opportunity for UK exporters who want to sell into the UAE:
- Motor vehicles – the UAE’s appetite for automotive is incessant – it has one of the highest vehicle densities in the world, with one car for every two residents. Despite the fact that the UK exports GBP 436.5 million of motor vehicles every year, there is an untapped potential of up to GBP 496.7 million.
- Aircraft and Airplane/helicopter parts – As the UAE loves to drive, so it enjoys flight. The UK only exported GBP 69.7 million of these products, leaving scope to potentially realise an additional GBP 311.8 million of exports.
- Telecommunications – As with most advanced economies, the UAE is increasingly reliant on virtual communications to make its economy tick. The UK could double its current exports (GBP 111.5 million) to over GBP 220.1 million.
- Alcohols – A personal favourite about living in the middle east is the communal love of scents; from oud to myyrh, and bukhoor to citrus, consumers here pay great heed to smelling nice. The UK could realise an additional GBP 58.7 million of exports, up from its existing GBP 24.2 million of exports. Another type of alcohol that hasn’t been as popular in the UAE is that which is imbibed. However, as the government liberalises, and the expat community continues to thrive, alcohol consumption will continue to increase. Whiskies in particular, are popular, and the UK could increase its exports to the UAE from GBP 100 million to GBP 192.9 million in this space.
Just goes to show, opportunities might sometimes lie in unexpected places! Please contact us to learn more on how we can support and connect you with partners in the UAE.