The UAE is taking giant strides to become the fastest growing e-commerce market in the Middle East and North Africa (MENA). According to reports, e-commerce transactions in the UAE are forecast to reach GBP 11.6 billion by the end of 2019 having grown by 23% from the values in 2018. The 23% growth rate is expected to continue until 2022. The sectors that have benefited mostly from this growth are the food and beverage; and retail. Some of the factors that have boosted regions e-commerce market includes.
High digital penetration
According to Visa research, 95% of UAE resident are connected online which has spurred the growth of e-commerce. The UAE’s population comprises nearly 30% of millennials and a growing Gen Z who are digital native and are always connected, seek on-demand, near-instant solutions. Their desire for fast and convenient shopping experiences has accelerate the uptake of online shopping.
According to reports, UAE residents spend a lot of time on the internet and social media, averaging 7 hours daily to become one of the top 10 global social media/internet users. This proves that going digital is the future of the UAE.
Improved logistics
Convenient logistics across the country is the game changer that has supported the industry. The UAE is a focal point for distribution, and its low logistics costs and infrastructure make it an ideal place for e-commerce to thrive. Several logistics companies have set-up in the country making products accessible within a short time. The UAE also enjoys an advantage as a major global trans-shipment hub with the port of Jebel Ali and Dubai International Airport (the sixth busiest cargo airport in the world) providing a high standard of logistics.
Increased security
Banks and payment providers in the UAE have also enhance card security for online transactions by adding an additional layer of security to the process. Retailers can now partner with payment processors to adopt several protocols to secure their details. Following a recent survey by Visa that examined consumer perception of digital payments and online shopping, 66% of respondents said they trust online shopping and 70% trust online payments. This provides enormous possibilities for merchants to build consumers’ trust on their infrastructure of online payments so that consumers can benefit from more seamless, rewarding and secure shopping experiences.
To learn more about the opportunities in the UAE e-commerce market, contact wuraola.ogundimu@bcbuae.com