8 Reasons Why the UAE is the Fastest Growing e-Commerce Market in the Middle East
The UAE, along with the Emirate of Dubai, ranks first in the list countries with the fastest rising e-commerce presence in the Middle East – and for good reasons. Much credit to the government’s proactive efforts and advance initiatives, such as the Dubai Smart City, the Wage Protection Scheme, and many others.
Find out in the list below the key factors that have placed the UAE (and Dubai) at the forefront of e-commerce growth in the Middle East.
Insane digital penetration
“As of March 2022, there were around 3.68 million internet subscriptions in the United Arab Emirates. This figure represents an increase of nearly 700 thousand subscriptions from December 2020,” says Statista, a reliable online resource for market and consumer data.
When you compare the UAE’s internet user population with the region’s total population of an estimated 9.9 million people (according to the United States Census Bureau), you see that the region has a significant online presence, as well as some of the strongest internet user-population growth.
These figures are an astonishing proof that the UAE is actively either shopping or ready to add to their cart.
Rising use of mobile wallets
Mobile wallet use in the UAE has been on the rise, as the region continues to experience significant increase in smartphone use.
As we know, smartphones are the gateway to digital payments, so, naturally, this has made mobile wallets gain popularity quite quickly. And with the presence of global giants like Google Pay, Samsung Pay and Apple Pay joining the competition along with local companies and banks, residents and visitors of the UAE only have to tap on their smartphones to make payments at the stores, hotels, taxis, and many other outlets.
One of the targets of the UAE is developing a digital culture and eliminating many of its barriers to becoming a cashless society. In fact, in the UAE Vision 2021, cashless payments and digital commerce were highlighted as top government priorities.
The government’s pro-business policies have been critical to this goal. A lot of measures to support it have also been mapped out by the authorities, the Wage Protection Scheme, for example.
Rising online shopping opportunities
Digital commerce in the UAE has experienced growth at both domestic and international scales, and this includes a number of digital start-ups with in-app and mobile world-class shopping experiences. The region has also seen conventional retailers go digital across almost all industries and witnessed how international brands have established delivery services to the UAE, allowing for the smooth purchase and delivery of products for customers.
The cashless revolution
Unlike what was commonly known about the MENA (Middle East and North African) region, contactless and cashless payments are clearly becoming the new standard, especially since the Covid-19 global pandemic.
The UAE has established the foundations for a digital society with regard to marketing. In fact, “…the UAE ranks foremost among the regional economies most rapidly moving away from cash,” according to the Gulf News website. MasterCard Economics Institute reports a spike in online shopping: “73% of consumers in the Middle East and Africa are shopping more online since the start of the pandemic.”
Huge buying power
It’s common knowledge that the Middle East generally has the highest per-capita spending in the world. This is especially true for countries in the Gulf Cooperation Council, all six of which are among the top 50 wealthiest countries in the world, according to Forbes.
Among the GCC nations, the UAE, the focus of this discourse, particularly has the heaviest online spenders. This is not surprising, considering the amount of interest the region attracts – thanks to its unrivaled tech and tourist presence.
With a lot of money to throw around, the UAE consumer is also among the top consumers of luxury products online, on a global scale. This claim is supported by Visa’s transaction data, which reveals that “…the UAE continues to maintain a healthy lead in average transaction size compared to both emerging and mature e-commerce markets.” The resource also says that “…the transaction size in the UAE averages $144 in 2018-19, compared to $79 in mature markets and $26 in emerging markets.”
Finding a balance between smooth customer experience and effective security is another noteworthy reason e-commerce is growing in the UAE. Financial institutions and payment providers such as Visa and MasterCard are constantly exploring new and better ways to improve card security for online transactions, making digital commerce a safe and welcome option for most shoppers.
Online retailers can work with payment gateway firms to establish protocols like Verified by Visa, whose security system can send online shoppers a one-time passcode to make sure that any payment is made by the rightful owner of the credit card.
The tech in logistics
Anyone who has been to the Middle East probably knows that unlike in Europe and North America, a large part of the region does not have zip codes, which means that directions can be tricky. To solve this challenge, many logistics companies are using machine-learning algorithms that change descriptive addresses into geocoded locations. Presently, about 90 percent of descriptive addresses in the UAE use the geocode, thereby allowing access to a powerful MENA online trade wave and a tech-powered bridge between the MENA area and the rest of the world.
The UAE e-commerce sector has experienced incredible growth in recent years and is expected to keep growing. With a digital regional population of 3.68 million out of a total population of 9.9 million, there’s just so much potential to tap from the market.
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