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UAE E-Commerce Market To Reach $9.2 Billion By 2026

The UAE's e-commerce market is experiencing significant growth, driven by increased smartphone usage and improved payment systems. The market is projected to reach $9.2 billion by 2026, with mobile retail sales expected to grow at a 15.6% CAGR. While local retailers currently dominate, foreign e-commerce platforms are anticipated to gain market share. Categories like apparel, footwear, accessories, and home goods show high potential for further online sales growth. The overall momentum in e-commerce is expected to create more opportunities in related sectors like payment systems, fintech, and logistics.
Published on
July 12, 2024

Online shopping sales reached $4.8bn last year as Covid drives e-commerce sites in the UAE

The UAE's e-commerce market is forecasted to grow at a compound annual rate of 12.9% over the next five years, reaching $9.2bn by 2026, according to a new study from Euromonitor International.

The study, based on data from Euromonitor highlighted several factors boosting e-commerce activity in the UAE, as well as high-potential growth opportunities.

Mobile devices were used for the majority of e-commerce transactions last year as smartphones and tablets were used in the retail market to drive $2.6bn in sales, accounting for 44 percent of the total e-commerce market value.

Mobile retail sales are expected to record a compound annual growth rate of 15.6 percent over the 2022-2026 period to reach $4.6 billion.


UAE e-commerce above global average

It is estimated that more than one-third of consumers in the UAE bought a product or service using their smartphone at least once a week, which is above the global average of weekly online purchases.

Loyalty reward schemes offered by online retailers and pricing transparency offered my mobile apps are supporting the strong growth.

Local retailers are attracting shoppers in the UAE more than international sites, with domestic online shopping sites accounting for 73 percent of total sales.

However, the report states foreign e-commerce platforms are expected to grow at a greater rate and mark a 34 percent gain in market share by 2026.

The Dubai Chamber report on e-commerce in the UAE has revealed that apparel and footwear, personal accessories, beauty and personal care and home and gardening are among the product categories offering the most untapped potential in the e-commerce market in 2022.

Improved payment systems and services were identified as a crucial factor that has boosted demand and business activity within the UAE’s e-commerce sector. The Dubai Chamber report highlighted apparel and footwear, personal accessories, beauty and personal care and home and gardening as being among the product categories offering the most untapped potential in the e-commerce market in 2022.

The rise of e-commerce has been remarkable, and the report shows that consumers are increasingly buying more electronic gadgets than they are clothes, food, or other products.

According to a recent report from the U.S. Commerce Department, consumers spent $1.9 trillion on online purchases in 2018—a 5.6 percent increase over 2017.

While apparel and footwear sales were down 0.6 percent overall, electronic sales were up 9.7 percent year-over-year in 2018.

Fashion online shopping potential in UAE

According to a report from the Dubai Chamber of Commerce and Industry, apparel and footwear, personal accessories, beauty and personal care, and home and gardening are among the product categories offering the most untapped potential in the e-commerce market in 2022.

Growth momentum within the UAE's e-commerce sector is expected to continue, supported by rising demand for online shopping and steady investment flows in the sector's infrastructure.

The increasing momentum of e-commerce activity in the country is expected to provide more business opportunities in payment systems, financial technology, electronic logistics and distribution centres.

This was stated by Dubai Chamber of Commerce and Industry Chairman Ahmad Bin Byat at a press conference he held on Wednesday at DIFC.

Last month US-based visual messaging giant Snap Inc. unveiled new shopping and fashion features using augmented reality (AR), with users now set to be able to try on and purchase products through the app.

The company has been working on the feature since last year, when reports emerged that it had acquired startup Looksery for $150m, which claimed to have developed technology that could superimpose clothing onto people's bodies.

Earlier this year e-commerce platform Noon announced it would buy online fashion platform Namshi, owned by property developer giant Emaar, for $335.2m.