Dubai retail e-commerce market

In 2020 in the UAE, the retail e-commerce market had grown up to $3.9 billion. Also, in the same year, the eCommerce share of the retail market was around 8%. This huge share has been achieved by continuous year after year growth – especially due to the digital shift that has been caused due to the COVID-19. Thus, within the past few years, we have seen a remarkable rise in the retail e-commerce market sales rate as much as 3 times what it used to be back in 2015.

At this rate of the retail commerce market growth, by 2025, it is estimated to reach around $8 billion. There are many factors responsible for this rapid growth. Let’s first understand what are these factors and how it has shaped the Dubai retail e-commerce market

The UAE has a very high internet penetration rate i.e., 99%. This in conjunction with the need to get online due to the pandemic has undoubtedly highly improved the commerce market. Similarly, the Smartphone penetration rate in UAE is also very high. Thus, in 2020, mobile-commerce has had a share that of 42%, of the total e-commerce market; its market value is nearly $1.6 billion (i.e., more than 50% high than the value of the previous year). Based on these values, it is estimated by 2025, the retail mobile e-commerce market value may reach around $3.9 billion.

Mobiles are being increasingly used not only for shopping online; but for various relevant activities. For example, about 40% of online shoppers are comparing prices on their mobile phones – through comparison sites like ShopZilla, GoBazzar, etc.; or simply with a search. Similarly, mobile phones are also being opted for online payments when shopping physically in a retail outlet. Thus, it also needs to be noted that consumers are looking for more value for money; they are accordingly choosing retail or retail e-commerce.

Of the complete retail commerce market in the UAE, the apparel & footwear category has the highest share i.e., 33%, the consumer electronics category has the second highest with the share of 31%, and the next in line is the food & beverage category with 11% market share. This is an overview of the retail commerce market within the UAE.

When we get deeper and consider specifically Dubai, it is well famed for its malls. On the other hand, e-commerce growth has been on a rise recently. Some have contemplated the lapse of physical retail, however, instead, it is being seen there is a bridge being created between online and offline retail.

In the light of the post-pandemic world, consumers seem to be inclined towards retail e-commerce instead of physical outlets. Similarly, near 60% of consumers are becoming more inclined towards making online payments and not COD. While this is happening, the physical retail outlets are integrating e-commerce so that physical and online commerce both are co-existing. The result? Consumers are choosing Omni-platform options like click & pick up where orders are given online while the product is picked up from the nearest retail outlet.

Another option being increasingly preferred is where consumers physically shop at a retail outlet and get it delivered directly to the wanted address. Thus, physical retail outlets are increasingly entering the retail e-commerce market.

To put it in short, the Dubai retail commerce market is rapidly growing with increasing sales and more consumers opting for retail e-commerce.