12.3% Growth In UAE's Digital Trade Between 2023-2028, Research Paper Reveals

The Ministry of Economy and the Abu Dhabi Chamber of Commerce and Industry (ADCCI) have released a joint paper projecting a 12.3 percent compound annual growth rate in digital trade activities in the UAE from 2023 to 2028. The study highlights that over 40 percent of UAE consumers are utilising "buy now, pay later" models and FinTech digital technology systems.

Titled "Introducing Trade by Modern Technological Means: Economic Outlook and Federal Decree-Law No. 14/2023 - BEI Research 360° Paper," the research indicates substantial growth in Abu Dhabi's digital trade sector. This aligns with ADCCI’s vision to enhance the private sector’s role in the local economy through innovation and digitisation, aiming to position Abu Dhabi as a leading business hub in the MENA region by 2025.

The study provides insights into various economic and commercial activities driving digital trade growth, alongside the impact of current policies and laws. It also offers a historical overview of digital trade across local, regional, and global levels.

Ahmed Khalifa Al Qubaisi, CEO of ADCCI, stated, "The new research paper strengthens the Chamber’s role as a key partner in digital transformation within the business sector. It aligns with our strategy to attract talent, explore technological solutions, and integrate advanced AI technologies like Microsoft Copilot into our operations."

Al Qubaisi added that these efforts aim to boost productivity, improve task completion, increase customer satisfaction, and support local and global entrepreneurs. The Chamber continues to enhance initiatives for the private sector by employing smart systems for data analysis and operational process development.

Regulatory Frameworks and E-commerce Practices

The research paper reviews local, regional, and global regulatory frameworks, key agreements, and the role of international bodies like the World Trade Organisation in shaping traditional and digital trade. It also highlights new e-commerce practices influencing current trade dynamics.

The importance of Federal Decree-Law No. 14/2023 on trade by modern technological means is emphasised, reflecting the UAE's commitment to enhancing digital trade at a national level. The paper also reviews Abu Dhabi’s efforts in e-commerce, noting a 12 percent increase in registered e-commerce companies between 2022 and 2023.

Growth Projections for Digital Trade

The UAE achieved the third-highest level in digital trade globally by the end of 2022. Online shopping services in the MENA region are expected to grow further, with projections indicating that the digital trade market value may reach US$57 billion by 2026. The share of total digital trade is expected to rise from 5.7 percent in 2022 to 8.3 percent by 2026.

The research also revealed that about 49 percent of UAE consumers frequently shop online, with approximately 47 percent relying on credit cards—significantly higher than the global average of 18 percent. It is anticipated that by 2024, 20.1 percent of total global retail purchases will be completed online, with digital retail activity constituting about 25 percent of total global sales by 2027.

With inputs from WAM