UAE’s e-commerce market is world’s fastest growing

The UAE ranks as the fastest growing e-commerce market in the world in 2022 as the online sales across the world continue to register phenomenal boom.

With its 1,448,471,400-strong online population, the UAE is expected to increase e-commerce spend by an additional 22.32 per cent in 2022, well on track to surpass $8 billion in online sales value by 2025 from $5 billion recorded in 2021.

In 2021, global retail e-commerce sales reached approximately $4.9 trillion, a figure Statista predicts will grow by 50 per cent over the following four years, reaching around $7.4 trillion by 2025.

According to data released by Statista, the UAE’s e-commerce spending as a percentage of GDP increased by 1.10 per cent since 2021, and in 2022 e-commerce is expected to account for 7.0 per cent of the total retail spend.

South Korea and Argentina are respectively the world’s second and third fastest growing e-commerce markets after the UAE while the Philippines ranks top on Statista’s list of 10 leading countries using mobile devices to shop, with 70 per cent of all e-commerce being completed on a mobile device. This is followed closely by China in second with 69 per cent, and South Korea ranking third with 66 per cent.

“Except for the UK, every country in the top 10 is in Asia, which demonstrates the importance of this continent for the growth of m-commerce and e-commerce as a whole,” Statista said in its research report.

The research found that startups in the automobile industry attract the highest amount of funding, receiving $57.3 billion in 2021. After this, the industries receiving the second and third highest amount of funding are travel and fashion, receiving $26.2 billion and $24.7 billion respectively.

“Without a doubt, e-commerce has fundamentally altered the commercial scene in the UAE. With this exponential growth and the future moving towards e-commerce, companies have to adapt and find new methods to do business online. However, this is easy to do with the various opportunities the UAE government provides, especially for startups," Hatem El Safty, CEO of Business Link, told Khaleej Times on Wednesday.

As per a report launched by EZDubai, countries in the Middle East are in a strong position to enable further e-commerce development thanks to high GDP per capita and internet penetration. The UAE and Qatar are in the strongest position, with GDP per capita above $40,000 and internet penetration above 90 per cent.

In the Mena region, e-commerce is fast catching up with global powerhouses, such as China, with many online retailers scaling up services during Covid-19. The total market size was estimated at $31.7 billion in 2021, according to EZDubai data.

A report by Research and Markets predicted that Middle East and Africa B2C Ecommerce market would grow by 22.38 per cent annually to reach $104.1 billion in 2022. One of the major contributors to the region’s e-commerce market boom is the UAE, where the rising internet penetration rates largely drive the expansion of the e-commerce industry.

“This, coupled with growing incomes, high possessions of smartphone devices, increasing presence of global players, and enhanced supply chain solutions, has supported the market growth over the last two years. While the country has been a cash-dominant society in the past, the global pandemic outbreak has forced consumers to quickly adopt digital payment methods,” said the report.

— issacjohn@khaleejtimes.com