UAE E-Commerce Market Performance An Outlook to 2027-COVID-19 Impact Assessment

UAE E-Commerce Market Performance An Outlook to 2027-COVID-19 Impact Assessment

Executive Summary

UAE eCommerce market is expected to grow at a CAGR of 15% in next six years, as people across the region started to shift towards online shopping after the outbreak of the virus. In 2021, the UAE eCommerce market climbed 6 steps ahead and was the 24th largest eCommerce market across the world. The growing number of gen Z generation and the availability of high-tech infrastructure is increasing penetration of eCommerce industry in the region particularly in Dubai. However, the growing consumer expectation for delivery speed is creating competitive intensity among the eCommerce platforms which is driving the focus on improved service delivery. On the other hand, the eCommerce sector in the UAE has been revolutionised by major investments, acquisitions, and partnerships with worldwide firms.
Moreover, the increasing government’s initiative towards the eCommerce sector is a key factor supporting the sector’s development. Like, Dubai's DED announced emPay, a mobile payment platform which connects with partners throughout the payment’s ecosystem, as part of the larger cashless goal.
With various online retailers expanding their services during COVID-19, eCommerce in the UAE region is rapidly developing, especially in comparison to global powerhouses such as China. High internet penetration rates, increased ownership of digital devices, increased income, improved logistical advancements, and the growing presence of global and recognised players have all contributed to the growth of eCommerce in the UAE, bringing variety and availability to local consumers amidst the pandemic.
COVID-19 Impact: The virus outbreak had a positive impact over the eCommerce market The epidemic has boosted e-grocery significantly, several new players have emerged since the shutdown, ranging from food delivery apps that now sell groceries to Noon and Amazon's debut of daily basics. Moreover, as more people began to shop online during the epidemic, the demand on last-mile delivery services grew. On the other hand, the pandemic also boosted the e-retailing and simultaneously created demand for logistics of which 3Pl service providers were benefitting the most as the companies foraying into eCommerce business were not equipped with logistics supply chain.

UAE Economic Performance
The UAE economy contracted 6.1% in 2020 on the back of the COVID-19 pandemic-induced global economic slowdown. Gulf countries, including the UAE, faced a severe economic slump in 2020 with a halt in global activity combined with a decline in crude prices, which is the region’s main source of income. As per the Central Bank of UAE, the overall GDP growth is forecasted to be 2.1% in 2021 and 4.2% in 2022.

Market Segmentation
Retail eCommerce Market: The UAE has the largest smartphone penetration rate, due to that the penetration of m-Commerce has increased. In 2020 the market share of m-Commerce has been increased by more than 40% and it is expanding rapidly, in coming years the segment is expected to grow in a double digit as the UAE, and particularly Dubai, remain eCommerce growth hotspots in the MENA area.
By Product: UAE eCommerce industry account for 8% of the UAE's overall retail sales, which includes Fashion, Food & Beverages, Consumer Electronics, Accessories and other products related to retail. Majorly the Apparel and footwear eCommerce sector had the greatest share but in 2020, due to the imposition of lockdown Food and beverages overtaken the apparel and footwear market which was a temporary shift.
B2C: The UAE is one of the major B2C eCommerce markets in the MENA region, with plenty of room for growth. In the UAE, m-Commerce and cross-border online shopping are two major market trends.
Payment Method: In UAE COD (Cash On Delivery), was the major preferred method of payment but the outbreak of the virus has changed the scenario, and large share of consumers currently prefer credit card over COD. But there is still a sector of the population that prefers cash on delivery.
Future Growth: The UAE's burgeoning eCommerce business has attracted some of the world's biggest eCommerce companies. This has aided in the transformation of the UAE's online purchasing culture. Cutting-edge technology has gained wide attention of internet shopping in locations like Dubai. Moreover, the increasing number of migrant populations, rising cross border purchase and low shipping cost is expected to drive the future growth of UAE eCommerce market.
eCommerce Logistics Market: The UAE has a competitive edge as a major global transshipment hub, with the port of Jebel Ali and Dubai International Airport (the world's sixth busiest cargo airport) offering the high-quality logistical infrastructure required for eCommerce to thrive. An increase in the number of smart phones in the country, as well as high consumer confidence and changing consumer preferences, have boosted eCommerce growth, resulting in a surge in demand for eCommerce logistics in the country
Consumer Preference for Cash-on-Delivery: Cash remained to be the most popular payment method in brick-and-mortar stores and the trend has extended to online purchases as well. Consumer preference for cash-on-delivery has been a key challenge in the UAE eCommerce ecosystem as it leads to higher return and refund rates, failure of deliveries, and limits the delivery options. Moreover, global couriers generally do not offer cash-on-delivery options, thus limiting the options for consumers and the growth of the eCommerce market as compared to other economies. Improvements in this sphere through innovative and effective solutions have been a key focus in recent years.

Scope of the Study
The following synopsis is based on the report UAE eCommerce Market- COVID-19 Impact and Outlook to 2027 published by Makreo Research and Consulting.
The report delves deeply into various parameters such as Market size, segmentation value chain analysis, and industry cause and effect analysis. The study includes market dynamics that provide an understanding of industry opportunities, driving forces, major challenges impeding growth, and an analysis of future opportunities that may help market players capitalise on untapped business potential in the specific geography.

UAE eCommerce Market Segmentation
UAE eCommerce Market
UAE retail e Commerce Market
By Products
Apparel & Footwear
Fashion
Food & Beverages,
Consumer Electronics,
Accessories
Others
Segmentation: B2C
e-Commerce & m-Commerce
Payment Method
Credit Card
E-wallet
COD
Bank Transfer
Other
UAE eCommerce Logistics

Companies covered in the UAE E-commerce Market Report:
Noon AD Holdings
Sharaf DG
Souq.com
Namshi
Amazon
Ikea
Apple.in

The report helps reader to gain information on following areas:
How UAE economy is placed after the virus outburst?
What are the major driving factors supporting the UAE E-commerce growth?
How UAE E-commerce market performed before the virus outbreak and how COVID-19 has impacted the industry performance?
How B2B market is performing in UAE E-commerce industry?
What are the major products gaining the most in the UAE E-commerce market?
Who are the leading players in the market and what is their present state in the market?
How UAE E-commerce market is expected to perform in the near future?
What are the key opportunities present in the market?