Recent data reveals that the UAE's retail sector is undergoing major changes due to online shopping and the rapid growth of the retail market. Approximately 2 million people, representing 20% of the UAE's population, have shifted to online shopping since 2019, and the number of online shoppers will increase from 4.5 million to 6.5 million by 2023. This change is propelling the UAE's retail market, worth $83.54 billion (Dh306.6 billion in 2022), towards a promising future.
The emergence of digital marketplaces
According to Akshay Jayaprakasan, Associate Partner at Redseer, the UAE is entering a golden age of e-commerce with a massive shift to online platforms. This transition is supported by his 87% increase in online travel bookings and his 46% increase in food technology services. Additionally, 70% of UAE consumers are willing to consider new brands, showing that the e-commerce landscape is dynamic and evolving. From 2022 to 2027, the market is expected to grow at a compound annual growth rate (CAGR) of over 5%, further underscoring the upward trajectory of this sector.
Technology and innovation: the backbone of growth
Sebastian Shi, CEO of Huawei Cloud UAE, noted that the company has invested more than 1 trillion Chinese yuan ($160 billion) in cloud technology over the past 10 years, and said that technology and He emphasized the vital role of innovation. The investment is aimed at supporting companies' transition into the digital space and enhancing customer acquisition and retention. A focus on data security and excellent service were also highlighted as key factors for success in the e-commerce sector.
Insights from Internet Commerce Summit 2024
The 2nd Internet Commerce Summit (ICS) 2024 served as an important platform for discussing challenges and opportunities within the retail and e-commerce sector. Industry leaders shared insights on digital transformation, innovation, and customer engagement strategies. Eros Group CEO Rajat Asthana contrasted the return on investment of offline and online sales and pointed out the huge growth potential in the e-commerce sector. The summit also explored the evolving role of offline retail as an experience center amid the ongoing digital transformation.
The UAE's retail sector's transformation journey highlights broader trends in digital adoption and innovation. The future of e-commerce in the UAE looks vibrant and promising as businesses and consumers increasingly embrace online platforms. This shift not only reflects changes in consumer behavior, but also highlights the importance of technology and innovation in driving economic growth. As the sector continues to evolve, it will undoubtedly bring new opportunities and challenges for businesses, policy makers and consumers.
