8 Facts You Need To Know About E-Commerce In The UAE
22nd February 2023
E-commerce is booming in the UAE. Between 2019-2021, sales doubled to approximately $2 billion, for the top 100 online stores in the UAE, according to ecommerceDB. If you want to start an e-commerce business in the UAE, here are eight facts you need to know.
Facts about E-Commerce in the UAE
1. The UAE boasts the 27th largest market for e-commerce market, globally.
2. Net e-commerce sales of the top 100 UAE online stores reached approximately US$2 billion in 2021.
3. The top 5 online stores in the UAE accounted for 56% of the net sales of the top 100 UAE online stores in 2021. (The top online stores in the UAE are: amazon.ae; namshii.com; noon.com; apple.com; and, sharafdg.com).
4. Fashion is the biggest category of online sales in the UAE.
5. 36% of online shoppers in the UAE have a high household income.
6. The UAE's e-commerce market is projected to grow to US$17.2 billion worth of sales by 2027.
7. The UAE's e-commerce market is projected to grow at a compound annual growth rate of 8.4% between now and 2027 (CAGR).
8. Projections for UAE e-commerce:
· Rising demand for online shopping
· Improved payment systems
· Steady infrastructural investment
The foundations of e-commerce in the UAE
Acquisitions have played a big part in the development of the UAE's e-commerce space. The biggest, and most significant of which, was the acquisition of souq.com by Amazon in 2017. According to media reports, the deal was worth in the region of $580m and souq.com's founder, Ronaldo Mouchawar, took on the position of Vice President of Amazon MENA.
More recently, just last week in fact, saw the latest acquisition of NAMSHII, the UAE' s online retail giant, by Saudi's Noon.com from Emaar Malls. Going back to 2017 again, Emaar Malls acquired 51% of the online fashion retailer for $151m and subsequently bought up the remaining 49% in 2019 for $129.5m.
The future of e-commerce in the UAE
The future of e-commerce is looking bright in the UAE; and, for good reason. Whilst, it might have been slower out of the starting blocks when compared to other parts of the world, it was given a significant boost as a direct result of the pandemic.
Since 2020, retailers have been forced to improve the online sales parts of their businesses and fulfilment operations. Myriad fulfilment and delivery solutions companies have sprung up resulting in same day deliveries in the larger cities of Dubai and Abu Dhabi being the norm. But, there is still room for improvement to develop quicker fulfilment and delivery services in other cities, such as Al Ain, where retailers still have to work on a 2-3 day basis for order fulfilment as there isn't a strong enough courier network in place yet, i.e. receive online order, place booking for collection by courier (can be same day if booked before 10am with some couriers, otherwise its usually next day); and, and then the day after collection for the delivery.
Tech and AI is already starting to impact deliveries with drones and robots. Just this week, food delivery bots started in Dubai.
Over recent years more payment gateways have entered the market providing improved solutions for retailers (and consumers). Choice of providers is always a good thing, and it means a selection of packages and prices for retailers, as well as increased security. This is likely to continue developing in line with technological advances. And, the UAE is positioning itself as a leader in digitization and AI, so its likely that UAE-based companies will be early adopters of new technological trends. Online shopping in the UAE will see brands being successful which understand the unique buying habits of the diverse population in the UAE and cater to them, accordingly.
Starting an online business in the UAE
If you want to start an e-commerce business in a thriving market with huge growth potential, then speak to us at Gateway Group about starting your business in either Abu Dhabi or Dubai, today. There are plenty of trade license options to start selling online, including free zones and mainland licenses. We look forward to getting your trade license issued for you.
Gateway Group - Who We Are & Why We Exist
With offices in Abu Dhabi and Dubai, Gateway Group helps international companies get registered to do business in the United Arab Emirates (UAE). We are the authority on business licenses and visas for expats in Abu Dhabi and Dubai.
Founded and headed up by British husband and wife team, Nathan and Jenny Hunt, Gateway operates with it's core values at heart: Honesty. Trust. Integrity. We do what's in the best interests of our clients rather than what's best for our bottom line. After all, we are just like our clients - we've invested our own money into our business licenses, so we fully appreciate what a big investment a commercial license is. We believe this uniquely positions us to provide our services with understanding and empathy.
From our own first-hand experience and knowledge, generated from living and working in the UAE, as well as setting up companies and building relationships here, we are able to offer unique insight and guidance to help our clients successfully step into the market and do business in the UAE.
We value long-term relationships and our incredible client retention is one of our strongest assets, which is extremely rare in our industry.
Founding Partner, Jenny Hunt, has been setting up businesses in Abu Dhabi and Dubai for over 10 years and is ranked in FORBES' Top 100 Most Influential Women In The Middle East!
Gateway Group's blog is ranked in Feedspot's '25 Best Abu Dhabi Blogs And Websites You Should Follow In 2023' (currently ranked 10th - 16th February 2023).
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Written by Jenny Hunt
Founder Gateway Group, Abu Dhabi & Dubai, United Arab Emirates
FORBES' Top 100 Most Influential Women In the Middle East