United Arab Emirates - eCommerceUAE - eCommerce
Robust internet and mobile penetration across the GCC has played an active role in enabling the growth of e-commerce in the region. Recent research conducted by Google reveals that the U.A.E. leads global smartphone penetration at 73.8 percent and the country’s internet usage statistics show that 91.9 percent of the population has internet access. A report on online shopping trends in the U.A.E. released by AWOK.com in 2016 indicated that 80 percent of the online retailer’s customers shopped using mobile phones.
At 46 percent, Dubai has the highest number of online shoppers in the U.A.E., according to a survey by AWOK.com. A separate study by Network International found that 34 percent of U.A.E. residents make online purchases between one and five times a week. The product categories that produce the most revenue in online sales in the region are consumer electronics, computers, and jewelry (including watches). Online shopping for clothing also has begun to gain in popularity. The most important factors for online shoppers in the U.A.E. were price, customer service, and ease of use.
In addition to increased internet and mobile penetration, another enabling factor that should propel e-commerce throughout the region is the recent Amazon-souq.com deal. In March 2017, Amazon acquired Souq.com for an undisclosed sum (estimated to be nearly $600 million). Amazon’s Middle East e-commerce operations are currently limited to Saudi Arabia – although its cloud computing arm, Amazon Web Services, has offices in Dubai and Bahrain. According to the journal Arabian Business, Amazon started looking in January 2017 for office and logistics space in Dubai from which to run the company’s regional operations.
Growth in e-commerce is not solely driven by the private sector. An important factor in building trust in online commerce over the last few years has come from e-government initiatives. Across the region, we see the integration of traditional offline services such as visa services, traffic services, and utilities services onto online platforms integrated with online payments to provide citizens and residents faster and more effective public services.
In 2016, the Arab Federation of e-Commerce, headquartered in Cairo and comprised of representatives from 14 governments across the MENA region including the U.A.E., was established to promote and develop the region’s e-commerce sector. This year, according to Arabian Business, the federation will release a five-year strategy to help grow the region’s e-commerce sector from $20 billion in 2017 to $200 billion beyond 2020. Among the possible regulatory changes are amendments to free zone’s import and export tariffs to make it more cost-effective for smaller e-commerce players to distribute their goods, and measures to strengthen e-payment gateways.
In the meantime, there remain obstacles to increased e-commerce in the region, including: low adoption of online retail channels by local businesses, the predominance of cash on delivery payments, and low consumer acceptance of online shopping compared to international benchmarks. Security concerns and inability to touch and test products before purchase keep some consumers away from online purchasing. Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.
United Arab Emirates eCommerce Industry Trade Development and Promotion eCommerce