Dubai: Consumers in the UAE are the region’s biggest spenders online, with the value of internet transactions reaching billions of dirhams in just one year.
According to the data released on Sunday by Payfort, a payment gateway owned by Amazon, the total amount of money paid online by UAE shoppers reached $12.4 billion (Dh45.54 billion) in 2016, up by 21 per cent from a year earlier and higher than Saudi Arabia with $8.3 billion transactions and Egypt with $6.2 billion of transactions.
The UAE’s total spend is the highest and represents nearly half of the $30.4 billion purchases made online by shoppers in select Middle East countries.
The UAE registered the fastest growth, estimated at 36 per cent, in online spend in the area of entertainment and events.
The value of the UAE’s retail sector was estimated to be $56.6 billion at the end of 2016, according to recent data from Euromonitor International.
In effect, this means that online shopping in the UAE accounts for over 21 per cent of all retail sales.
As for the year-on-year growth in overall spend, however, Saudi Arabia topped the list at 27 per cent, followed by Egypt and the UAE, at 22 per cent and 21 per cent, respectively.
The figures were collated in Payfort’s ‘State of Payments in the Arab World’ report that covers seven countries in the region, including Egypt, Jordan, Kuwait, Lebanon, Qatar, Saudi Arabia and the UAE.
Despite the huge value and growth in online spend, it appears that consumers in this market still have reservations about online shopping.
In a study among the region’s consumers who shy away from making payments online, 50 per cent stated that they would only switch to internet spending if they were convinced that the transaction was secure.
In Egypt, for example, the huge majority (70 per cent) prefer to pay cash on delivery, while 60 per cent in Lebanon shared the same view.
“Despite the enormous growth in the region’s online payments and usage of e-commerce, security fears remain prevalent among consumers,” said Nardeen Abdalla, marketing director of Payfort.
“Although we now see a greater willingness to make online transactions, consumers are increasingly aware of the risks of fraud and other cybercrimes. They are also increasingly demanding, seeking faster and easier checkouts.”