Dubai: With more and more people buying on their mobile phones with their plastic money, the e-commerce industry in the UAE and the rest of the region is forecast to reach $15 billion in sales next year, a new study has found.
According to a report released yesterday by Payfort, online transactions are expected to grow by more than 60 per cent in 2015 from $9 billion in 2012, thanks to high credit card usage online and increasing consumer appetite for electronic transactions. Booming online ticket sales in the UAE, where the majority of the residents are expatriates who travel frequently, is another major factor in e-commerce growth.
“For one, the ecosystem in the UAE is optimum. You have a very high issuance of cards in this market, with the average person having between three and five credit cards in their pockets,” said Omar Soudodi, managing director of Payfort.
“The other driving factor is that you have consumers that already have an experience with e-commerce transactions. But I think the biggest contributor is the airline and travel industry. If you look at the carriers in the GCC, their share of the world travel market went up from only 2 per cent in 2004 to 12 per cent in 2014,” Soudodi told Gulf News in an interview.
The UAE, including other countries in the Gulf Cooperation Council (GCC) region enjoys a greater competitive edge compared to other travel markets because of its proximity to major global destinations.
“The region has access to Asia and it is situated between Europe and the United States. The travel trend is shifting. In the 70s and 80s, everybody was travelling between Europe and the United States or from Europe and the US to the rest of the world. Now it’s shifting from Asia to the rest of the world and we’re situated right in the middle of it. We have amazing destinations in the GCC as well,” Soudodi added.
Payfort’s report showed that the most popular online shopping category in the UAE is airline ticket, representing nearly a quarter (23 per cent) of the transactions, followed by electronics (16 per cent), entertainment (13 per cent) hotel (12 per cent) and clothes (9 per cent).
The majority of consumers in the UAE still prefer to use paper bills when making day to day purchases, with 78 per cent of the transactions done in cash, but the report said the figure is dropping. “While only 22 per cent of users pay with a card, this percentage represents an improvement from the cash versus credit card split a few years ago,” said the report.
Western expatriates in the UAE, as well as those from the subcontinent, represent the largest groups transacting online or nearly 70 per cent of e-commerce customers.
Consumers who are between 18 and 31 years old represent the majority of online buyers in the UAE, about 73 per cent. Internet users in the country are mostly active on Facebook, while a fewer number of them use Twitter and LinkedIn.
