The UAE, Saudi Arabia and Israel account for over 72 per cent of the MENA ecommerce sales. As 5G goes wide, online sales could put in faster growth. Image Credit: Shutterstock

Dubai: Is the UAE’s ecommerce space ready to take on new growth? With super-speed 5G networks and the first signs of shopper activity on Metaverse-enabled platforms, UAE ecommerce sure is ready.

The same applies in various degrees in the other Gulf markets and elsewhere in the Middle East, according to a new report from EZDubai, the dedicated ecommerce zone at Dubai South, along with Euromonitor, the research consultancy.

“5G expansion across the region enhances the retail ecommerce experience,” states the report, which adds that the likes of UAE and Saudi Arabia ‘deploying some of the world’s first 5G networks’.

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Then comes Metaverse-related possibilities, or experiences, which too will gain from being on 5G networks. “Meta Incubator was launched in April 2022 in Dubai to develop early-stage projects for all Metaverse-related technologies,” the report notes. “As such, companies launching Metaverse platforms are taking online shopping to the next level while also improving omni-channel interactions with consumers.”

Even as 5G and Metaverse remain in the early stages of their transitions to mass usage, the UAE and Middle East ecommerce space put in some significant growth through the recent past. By 2026, these markets would generate a combined $56.6 billion, well up on the $37.1 billion recorded for 2022 and the $32.5 billion in 2021.

The 2020 tally was $27.8 billion, which came after a sharp rise in online selling and buying activity brought about by the Covid restrictions. That was the main driver for growth from 2019’s tally of $15.5 billion.

The UAE, Israel and the KSA represent 72.1 per cent of the MENA’s total ecommerce market size. “Technologically-savvy populations, near-universal internet usage and strong government finances characterize these countries,” the report states.

‘Smart’ channels

According to Mohsen Ahmad, CEO of Dubai South Logistics District, “It is worth noting that government initiatives have also played a vital role in supporting this growth, with several regional governments implementing policies to support digital transformation and encourage entrepreneurship and investing in the necessary infrastructure and technology.”

Smart or digital platforms and channels have become commonplace in residents of the UAE sourcing government-related services. That in turn feeds into greater usage of online channels with their retail and other needs.

Dark stores and convenience

All of which helps with the consumer convenience as companies with q-commerce operations expand on their ‘dark store’ networks. These help reach consumers with deliveries within 30-60 minutes flat. (Dark stores located in high consumer concentration areas stock high-demand products that can then be delivered at the earliest.)

“Players like Careem Quick, Noon Grocery, Daily (Talabat), Rabbit and Quick Market (Hungerstation) seek to offer convenient and quick delivery services with a wide variety of quality products,” the report states. “In addition, addition, grocery retailers and supermarkets are launching their own ecommerce platforms showcasing how competitive the market has become.”

Let’s not forget the ‘omni’ way

The other big value-add for ecommerce would be from omni-channels, with all of the big retail groups in the UAE now having this hybrid way to their physical and online selling. “To sustain growth, Ecommerce players should prioritise personalisation of the online experience, adopt an omni-channel approach, and improve last-mile delivery services,” said Engy Naguib, Senior Engagement Manager, Public Sector MENA region at Euromonitor International.