E-Commerce Growth & Predictions
The e-commerce market of the UAE has been ranked with the most growth in 2022 as global online sales keep growing at an exponential rate.
With a projected increase in e-commerce spending of 22.32% in 2022 and an estimated 1.5 billion people online, the UAE is expected to surpass $8 billion in online sales by 2025, up from $5 billion in 2021.
Statista’s Research Report
Global e-commerce retail sales reached around $4.9 trillion in 2021, a figure that Statista predicts will increase by 50% over the next four years, reaching approximately $7.4 trillion by 2025.
Statista data shows that since 2021, the UAE’s e-commerce spending as a percentage of GDP has increased by 1.10%. By 2022, e-commerce is predicted to represent 7.0% of all retail spending.
After the UAE, South Korea and Argentina have the second and third fastest-growing e-commerce markets, respectively. However, according to Statista’s list for mobile shopping, the Philippines ranks at the top, with 70% of all e-commerce conducted on mobile devices. China comes in second place with 69%, followed by South Korea with 66.6%.
Statista’s research report showed that, except for the UK, every nation in the top 10 is in Asia, highlighting the significance of this region for the expansion of m-commerce and overall e-commerce.
According to the research, $57.3 billion was invested in startup companies in the automotive sector in 2021. Following this, travel and fashion received $26.2 billion and $24.7 billion, respectively, ranking second and third in terms of the highest funding.
The Commercial Landscape
“E-commerce has, without a doubt, fundamentally changed the commercial landscape in the UAE. Businesses must adapt and develop new strategies for conducting online business due to this exponential growth and the shift towards e-commerce in the future. However, this is a simple mission because of the numerous opportunities the UAE government provides, particularly for startups,” according to Hatem El Safty, CEO of Business Link, who spoke to Khaleej Times.
According to a report released by EZDubai, Middle Eastern nations are well-positioned to support further e-commerce development because of their high GDP per capita and internet adoption rates. With a GDP per capita above $40,000 and a 90% internet penetration rate, the UAE and Qatar are in the best position.
With many online retailers stepping up services during COVID-19, e-commerce in the Mena region is quickly catching up to global powerhouses like China. According to data from EZDubai, the total market size was estimated at $31.7 billion in 2021.
A report by Research and Markets said that the Middle East and Africa B2C e-commerce market would grow by 22.38% per year and reach $104.1 billion in 2022.
In the past, the UAE was a cash-based society. Still, the global pandemic has forced consumers to adopt digital payment methods.
Market Expansion Factors
The UAE has become a driving force in expanding the region’s e-commerce market. The increasing internet penetration rates primarily drive it. Rising incomes, high smartphone ownership, a growing presence of global players, and improved supply chain solutions have contributed to the market’s expansion over the past two years.