When discussing global e-commerce hotspots, are you still only focusing on Europe, the US, or countries like China, Russia, and Brazil?
Although the development of e-commerce in the UAE lags behind that of developed regions such as Europe and the US, or emerging markets like Russia and Brazil, the country has witnessed a steady shift from physical retail to online shopping. E-commerce is becoming increasingly popular among UAE consumers.
As one of the regions with the highest concentration of wealthy individuals, the UAE boasts high per capita spending power, a young population, high product profit margins, and significant sales growth potential. According to a McKinsey report, the number of people in the UAE who shop online at least once a week has doubled in two years. E-commerce sales in the UAE are expected to reach USD 8 billion by 2025.
The rise in internet penetration, increasing household income, growing participation from international players, and rapid adoption of digital payment solutions all contributed to the substantial growth of the UAE's e-commerce market during the pandemic.
In 2021, the UAE's e-commerce market revenue reached USD 9 billion, marking a 36% year-on-year increase and ranking 24th in the world. That year, 75% of UAE residents made online purchases, with home goods, food and beverages, and tech products being the top categories. It is projected that in 2022, the UAE e-commerce market would grow to USD 27 billion, with more than 10,000 SMEs operating in the sector. Furthermore, data from Statista shows that from 2018 to 2022, e-commerce sales in the UAE grew at a rate of 23%.
Currently, the UAE is one of the key drivers of strong digital economic growth in the MENA (Middle East and North Africa) region. With an internet penetration rate exceeding 90%, a growing base of smartphone users, and increasing online shopping demand, the UAE is poised to make significant contributions. The UAE government has also implemented a series of initiatives to support entrepreneurship in the e-commerce industry.
As the market continues to grow rapidly, it has attracted increasing interest from e-commerce entrepreneurs and investors from countries such as Sri Lanka, Russia, Egypt, and the UK. More and more high-net-worth individuals and millionaires are flocking to the UAE.
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