The Middle East’s leading B2B e-marketplace Tradeling has observed significant growth in the Middle East and North Africa (MENA) region’s e-commerce sector.
The UAE has been a particular bright spot as major investments, acquisitions and partnerships with global companies have helped the country position its capabilities as the 27th largest in the world.
Recent data shows that the UAE’s e-commerce market is projected to generate $17.2 billion in revenue by 2027 and experience an annual growth rate of 8.4% through the next four years.
E-commerce sales in the UAE were estimated to grow by an average of 23% per year between 2018 and 2022. The COVID-19 pandemic was a driving factor for this growth as it accelerated the country’s digital shift and positioned it as an e-commerce leader among Gulf Cooperation Council (GCC) countries; the UAE’s online shopping resulted in $2.6 billion in sales in 2019. Its market grew by 53% and recorded $3.9 billion in sales the following year before reaching $4.8 billion in sales in 2021 and reflecting an 84.6% increase over the two years prior.
Almost 100% of the population has internet connectivity and mobile phone access, and this is what is fueling 70% of e-commerce transactions. As a result, the Dubai Chamber of Commerce and Industry forecasts e-commerce in the UAE to generate $8 billion in sales by 2025. The benefits of this strong trajectory have extended beyond the Emirates’ borders and bolstered the region as a whole. Despite signs of a global slowdown trend in online sales post-pandemic, MENA e-commerce sales rose by 21% to reach an eye-popping $25 billion in revenue last year.
With the UAE ranking as the fastest-growing e-commerce market in the world in 2022, and its online population estimated at approximately 1.5 trillion people, all signs point towards this momentum being sustained. Furthermore, a recent change announced by Dubai Customs will likely spur additional e-commerce growth as residents and citizens within the country will pay less when shopping online; goods imported with a value of less than AED 1,000 are exempt from paying tax fees. The threshold has increased from the AED 300 announced in January to effectively make products bought online for between AED 300 and AED 1,000 cheaper.
Marius Ciavola, CEO of Tradeling, commented: “While traditional brick-and-mortar stores are still going strong, they are gradually being phased out to become a thing of the past. The convenience of online shopping has been on full display in recent years with e-commerce spearheading an ‘out with the old and in with the new’ mindset. Since the UAE began digitalising its economy in 2013, immense progress has been made in leaps and bounds across all sectors. E-commerce in particular is demonstrating this, as there is a proliferation of digital wallets, an increasing number of individuals are embracing the idea of a cashless society, and the vast purchasing power of the UAE’s approximate population of 10 million is being realized. With that said, the industry is poised to continue growing via investment and partnerships to highlight one simple fact: the future is now.”