UAE Witnesses 21 Percent Increase In Online Shops


The UAE recorded an increase in online consumer spending primarily driven by a 21 percent jump in the number of online shops as the world witnessed an exponential boom in retail eCommerce with an additional $900 billion being spent in 2020.

The UAE, one of the leading online retail market in the region, also witnessed a 44 per cent year-on-year jump in the number of high-volume eCommerce trading partners from 2019 to 2020, according to Mastercard’s latest Recovery Insights report.

“As Covid-19 kept consumers around the world at home, nearly everything from groceries to gardening supplies was purchased online. Put another way: in 2020, e-commerce made up roughly $1 out of every $5 spent on retail, up from about $1 out of every $7 spent in 2019,” the report said.

According to the Dubai Future Foundation the UAE’s digital economy prior to Covid-19 contributed 4.3 per cent to the country’s GDP. Given the current trend, the e-commerce industry in the country is set to reach $62.8 billion by 2023.

The Mastercard’s report noted that roughly 20-30 per cent of the Covid-related shift to digital globally is expected to be permanent.

The Gulf region’s booming regional online shopping market is expected to grow by more than a third to reach a gross value of $30 billion this year, according to a report from Wamda and the Massachusetts Institute of Technology.

The e-commerce market in the region was worth $22 billion by the end of 2020, boosted by online shoppers from Saudi Arabia, Egypt and the UAE.

The three countries form 80 per cent of the region’s overall e-commerce market, according to the study. In Saudi Arabia, the market volume is expected to reach $8.2 billion by 2024.

Reflecting expanded consumer choice, Mastercard’s analysis shows that consumers worldwide are making purchases at a greater number of websites and online marketplaces than before. Residents in countries like Italy and Saudi Arabia are buying from 33 per cent more online stores, on average, followed closely by Russia (29 per cent), the UK (22 per cent) and the UAE (21 per cent).

“While consumers were stuck at home, their dollars traveled far and wide thanks to e-commerce,” said Bricklin Dwyer, Mastercard chief economist and head of the Mastercard Economics Institute. “This has significant implications, with the countries and companies that have prioritized digital continuing to reap the benefits. Our analysis shows that even the smallest businesses see gains when they shift to digital.”

Thanks to the pandemic, essential retail sectors, which had the smallest digital share before the crisis, saw some of the biggest gains as consumers adapted. With new consumer habits forming and given the low pre-Covid user base, we anticipate globally that 70-80 per cent of the grocery e-commerce surge to stick around for good.

As global international eCommerce rose 25-30 per cent during the pandemic, consumers increased their e-commerce footprints, buying from up to 30 per cent more online retailers, said the report.