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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 e-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 e-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 e-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 e-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 e-commerce market is rapidly growing with increasing sales and more consumers opting for retail e-commerce.
