UAE E-commerce Sector Predicted To Double In Value By 2028

The e-commerce market in the UAE reached AED 27.5 billion in 2023, with projections to exceed AED 48.8 billion by 2028. This data comes from the fourth edition of the "E-commerce in the Middle East and North Africa 2023" report by EZDubai, an e-commerce zone in Dubai South, prepared in partnership with Euromonitor International.

The UAE is witnessing significant growth in e-commerce adoption, driven by a tech-savvy youth demographic, strong government support through legislation and regulations, and substantial investments in digital infrastructure. These factors have collectively contributed to the rapid expansion of the sector.

In 2023, the leading sectors by value were clothing and footwear, consumer electronics, and media products. The report highlights that consumers in the UAE prefer mobile shopping due to its convenience and cost savings.

Credit and debit cards are the most common payment methods for online purchases, as cited by 93.2 percent of respondents in a 2023 Euromonitor International survey. This indicates strong confidence in traditional banking services. Additionally, smartphones are highly popular for online shopping.

Regional Growth Trends

The e-commerce sector in the Middle East and North Africa (MENA) region maintained its growth in 2023, achieving an annual growth rate of 11.8 percent to reach approximately AED106.5 billion. This growth follows a long period of increased internet usage.

The report projects that the e-commerce market in the MENA region will reach AED183.6 billion by 2028. Mobile commerce in both the UAE and Saudi Arabia has seen a significant surge, with its value quadrupling from 2018 to 2023, reaching approximately AED14.3 billion and AED16.1 billion, respectively.

Expert Insights

Mohsen Ahmad, CEO of Dubai South - Logistics District, attributed the growth of the e-commerce sector in the region to several factors. These include the widespread availability of high-speed internet services and favourable policies that focus specifically on developing digital payment infrastructure and logistics services.

The report underscores that strong government support and substantial investments in digital infrastructure have been pivotal in driving this growth. The emphasis on mobile commerce reflects changing consumer preferences towards more convenient shopping methods.

As the e-commerce market continues to expand, it is expected to play a crucial role in shaping the economic landscape of the UAE and the broader MENA region.

With inputs from WAM