01 Market Overview
Capital: Abu Dhabi.
Currency: United Arab Emirates Dirham (AED).
Languages: Arabic, English.
Internet penetration rate in 2023: 98%.
E-commerce penetration rate in 2023: 792%
E-commerce scale in 2022: 102$100 million.
United Arab EmiratesUAE (UAE) is the 27th largest e-commerce market in the world and one of the key players in the e-commerce market in the Middle East.
In 2023, the UAE's e-commerce market is expected to reach US$10.2 billion in revenue and US$1,355 in average revenue per user (ARPU), ahead of Saudi Arabia, which is also a Gulf region.
The UAE e-commerce market is expected to grow at a CAGR of 77%, the market size will reach $13.7 billion. In addition, the UAE's e-commerce penetration rate is expected to reach 79 in 20232% and is expected to reach 82 by 20270%。
In the MENA region, the UAE has also shown a higher adoption rate of e-commerce and a keen interest in digital retail, and the importance and penetration of e-commerce in the UAE's retail market is self-evident.
02 Major players
In the economic oasis of the desert in the UAE, the e-commerce market is experiencing a boom. A range of local (in addition to those mentioned below, Groupon, Talabat, Deliveroo, etc.) and international e-commerce platforms are vying for this growing digital commerce scene.
Amazon: Global giants dominate the UAE
As one of the global e-commerce giants, AmazonAE plays an important role in the UAE's e-commerce market, having previously known as Souq, which was acquired in 2017. Before being acquired by Amazon, SOUQ was already the largest e-commerce platform in the UAE and even in the Middle East.
NOON: The unique taste of e-commerce in the UAE
NOON, which stands out for its unique local taste and wide range of goods, is backed by EMAAR, the largest real estate group in the Middle East, and Saudi sovereign**. The platform covers a full range of goods from high-tech electronics to fashion and homewares, making it one of the leaders in the UAE's e-commerce market.
Namshi: A trendsetter in fashion
Namshi, on the other hand, is an e-commerce platform that focuses on fashion trends, and is widely popular for its fashion-forward product line and fast delivery service. In the UAE fashion e-commerce market, Namshi is undoubtedly a shining star.
Jumbo Electronics: Specialist retailer of electronic products
In the field of electronics, Jumbo Electronics has successfully captured the UAE electronics market with its professional services and high-quality product lines. The company is committed to providing consumers with the latest technology products and home appliances.
At the same time,Traditional brick-and-mortar retailers in the UAE are rapidly transformingto accelerate the construction of the best retail platform. For example, Carrefour and Lulu Group, the two largest retailers in the Middle East, have both launched shopping portals in the UAE and occupy a significant portion of the e-commerce market.
On the other hand,UAE consumers have rich consumption Xi of cross-border e-commerce。Chinese e-commerce such as AliExpress and JD.com are also becoming increasingly popular with UAE consumers due to their affordability**, wide range of products and attractive shipping options.
Although local platforms are highly competitive in the UAE's e-commerce market, the involvement of international giants has also intensified the intensity of the market. With the deepening of the digital transformation of the UAE, the future trend will be more diversified, which will also provide more development opportunities for various e-commerce platforms and even independent station sellers.
03 Category distribution
The e-commerce market in the UAE is becoming a diversified landscape that caters to the diverse needs of consumers. Fashion, electronics, beauty, groceries, and travel servicesand other categories are competing to emerge, and the e-commerce market is mature.
At the same time, between 2021 and 2022, some compelling category growth trends emerged in the market. Between 2021 and 2022,Snack food categoryIt has experienced an impressive growth of more than 850 and has become the engine of growth in the e-commerce market in the UAE. This reflects the continued consumer demand for convenient snacks and their preference for shopping convenience.
In addition,Bird Toys & AccessoriesIt has become the second fastest growing category in the UAE e-commerce market. This may be influenced by the expanding pet market. Also, among UAE consumers,Clothing and footwearIt has become the two most popular categories for shopping. According to a survey conducted in 2023**, 55% of respondents chose clothing and 45% chose footwear.
With technological innovation and changes in consumer demand, new categories of UAE e-commerce platforms will continue to emerge.
04 Consumer Characteristics
In the UAE,The gender ratio in the UAE has a significant impact on online shoppers。As of 2023, the gender ratio in the UAE shows a clear difference. Of the total population of 10.17 million, the male population accounts for 6858 per cent, compared to 31 per cent of the female population42%。
As a result, the UAE presents a distinctly different profile from other countries in the field of online shopping. According to statistics,69% of online shoppers are male, which is significantly higher than the global average
In age,The UAE's e-commerce market is showing a trend dominated by the younger generationMore than half of online shoppers in the UAE are under the age of 35. In terms of income level, online shoppers in the UAE are also more evenly distributed among low, middle and high-income groupsMiddle- and upper-income groups still dominate the e-commerce market
Data shows that more than half of UAE internet users cite free shipping as their main motivation for shopping. This shows that consumers are very sensitive to additional costs in the shopping process, and free shipping policies play a key role in improving the shopping experience and boosting sales.
In addition, more than one-third of respondents cited coupons and discounts as drivers of shopping. This reflects the importance of sensitivity among Saudi online consumers.
05 **Payment
The UAE's e-commerce market is undergoing rapid changes in payment methods, with the rise of digital payments becoming a notable trend in the market.
In the UAE,**Bank transfers and credit card payments are still the mainstream payment methods, both of which benefit from the UAE's highly developed financial system and high-income population. At the same time,Mobile payments and digital wallets are also rapidly emerging in the UAE
In 2023,Visa dominates the credit card program space in the UAE, accounting for the majority of the market share of 59%. Mastercard is a close second, with a 37% share.
Competition in the UAE e-wallet space includes both domestic and foreign players. There are a variety of e-wallets and digital payment services to choose from in the UAE, including Klip, eWallet (Etisalat Wallet), CashU, Payby, and moreLocalize your brandas well as Google Pay, Samsung Pay, etcGlobal mobile payment options
klip
Klip is a digital payment app launched by Emirates Digital Wallet (EDW) in partnership with 16 national banks in the UAE. EDW, on the other hand, is promoted by the Bank of the United Arab Emirates** and aims to facilitate cashless payments. The app is also known as "Digital Cash in the UAE".
ewallet
eWallet, also known as Etisalat Wallet, is a digital payment service launched by Etisalat, a major telecom operator in the UAE. As a payment solution driven by telecom operators, ewallet has carved out a niche in the UAE's mobile payment ecosystem.
cashu
Cashu, headquartered in Dubai, United Arab Emirates, is the first and largest local payment brand in the Middle East and North Africa region, accepted by more than 7,000 merchants worldwide and has 2.3 million users.
payby
Payby is a QR code-based contactless mobile payment and transfer app launched by Abu Dhabi-based fintech company Payby in partnership with First Bank Abu Dhabi (FAB).
USEEPAY provides multi-country local payment solutions for overseas merchants in the Middle East, covering credit & debit card payments, e-wallets and other payment methods, which are simple, safe and convenient.
06 Digital Marketing
The UAE and Dubai have almost the highest internet and mobile penetration in the world, which creates a huge market for e-commerce businesses. As of January 2023, Saudi Arabia has 9.33 million internet users, with an internet penetration rate of 98%.
According to data, the number of social ** users in the UAE has grown rapidly from 6.3 million in 2014 to nearly 10 million in 2022, accounting for more than 90% of the total population. Emiratis also spend an average of 2 hours and 33 minutes a day socialising**. In addition, nearly 70% of the UAE's social** users are male.
The mainstream social media in the UAE are WhatsApp, Facebook, Instagram, TikTok, Twitter, etc. Among them, platforms such as WhatsApp, Facebook, and Instagram have the most significant influence among users, and YouTube, as a pan-social network, also has a high degree of use in the UAE.
The boom in social networking in the UAE has led to the rise of social e-commerce。Shopping features, advertising, and branding on the platform become part of e-commerce. According to Research and Markets, the UAE social e-commerce GMV will be 199% CAGR, up from 9$75.2 billion to $28 in 2028$98.7 billion.
At the same time,Social** is an important channel for brands to be discoveredDigital advertising has a significant impact on social platforms. About 287% of UAE internet users discover brands through social** ads, while search engines account for 275%。
Under the development of digital marketing,Investment in digital advertising by businesses in the UAE has grown exponentially over the past few yearsand maintain steady growth in the coming years. According to the latest data, the total digital ad spend in the UAE reached 9$6.8 billion and is expected to exceed $137.4 billion by 2027.
The amount of digital ad spend in the UAE in 2022 by type is as follows:
At present, the situation in the Middle East has changed drastically. The long-term impact of political turmoil on the e-commerce market, logistics, consumer confidence and other aspects will be unknown.
The "black swan" events of Russia, Ukraine, Palestine and Israel have also sounded the alarm for cross-border sellers. Pay attention to the current situation of the target market and reasonably assess the risksMore and more important. After the trauma and turmoil, there may be a potentially great turnaround.
For the Middle East, political stability, economic prosperity, internationalization, developed logistics, and a high degree of digitalization have also become significant advantages of the UAE e-commerce market.
useepay wishes everyone to be able to "nugget" smoothly in the UAE, the country of the best.