Dubai: The UAE’s ecommerce market would add another $3 billion between now and 2025 to grow to $8 billion, as more residents and businesses switch to online for their needs.
Interestingly, UAE’s e-shoppers will also keep buying more from overseas portals, which at the end of last year touched 26 per cent and expected to grow to 32 per cent in 2025. What this means is that UAE portals will need to keep contesting hard for every e-commerce dirham that UAE shoppers spend on. In recent times, UAE-based portals have expanded their merchandise mix and also brought product prices to be on par with those shipped from overseas. (Many of the overseas orders could also be those that UAE-based shoppers make with Amazon’s non-UAE sites.)
“More consumers in the UAE made online purchases across all categories during 2021 compared to 2020, with an average 75 per cent of respondents typically purchasing online,” says a report issued by EZDubai, the Dubai government owned ecommerce zone in Dubai, and Euromonitor International.
“The fastest-growing sectors by industry from 2021-25 will be homewares and home furnishings, F&B, and media products.”
Chasing lower prices - or quality
Demand for cross-border purchases come as UAE consumers chase a wider range of products or those that come at lower prices compared to what it costs buying domestically. Plus, the overseas reachout also extends to higher quality products not offered locally.
The countries that UAE consumers purchase from include the "US, India and China and are often related to apparel and footwear as well as beauty and personalcare," the report said. "With the current pace of growing consumer preference for online retail, the region (Middle East) will see e-commerce growth of over $18 billion in absolute value terms over 2021-2025 reaching over $49 billion in 2025."
"The growth of e-commerce that is witnessed in the UAE and the MENA region encourages us to work harder and closer with our e-commerce players to boost the sector, so that the emirate’s e-commerce market becomes a global powerhouse," said Mohsen Ahmad, CEO of the Logistics District - Dubai South.