The e-commerce industry in the United Arab Emirates (UAE) is expected to hit the US$10 billion (AED36.7 billion) mark by the year 2018, regional retailers are in the process of consolidating their online presence in a bid to remain competitive and profitable. With the UAE’s current ecommerce value estimated to be around US$2.5 billion (AED9.2 billion), analysts are optimistic that the region’s ecommerce market is on an accelerated growth trajectory.
Chris Folayan, CEO and Founder of Mallfortheworld.com shares some interesting insights on the trends that shape the e-commerce industry in the region.
The MENA region has been fascinated with mega malls for years now. But in the past couple years, people in the MENA region have shifted to online shopping more than anyone has expected. E-commerce trade in the UAE was at $2.5 billion in 2014 and is expected to be at $10 billion by 2018, a 400% increase over just 4 years. With such astounding growth, no wonder companies like MallfortheWorld.com is looking at the GCC and MENA as its next break-through hub.
Shoppers love two things. Sales and Selection. When you couple those two addictions you are set for success. No one can do that better than online companies. Even with over 4.5 million square meters of shopping space between UAE and Abu Dhabi the selection of the top 50 e-commerce sites in the world would fill over 25 times the selections of all GCC and MENA malls put together.
Sales and selection have been the key to e-commerce success in the region where fashion and apparel rank #1, shoes and accessories #2, and jewelry and watches #3 according to MallfortheWorld.com which gives access to over 100+ USA retailer store sales information into the region.
With selection and sales driving e-commerce many luxury brands are tapping into the wealth and high fashion trendy nature of the region. Brands like Chopard, Gucci, Prada, Versace, Coach, Breitling, Alexander McQueen, Chanel, Christian Louboutin, etc. have physical stores and billboards across the UAE showing the amazing wealth these luxury brands want to tap into. But with the selection online, many of these stores are really showcase stores while people gravitate towards online stores for the sales, style, and perks that come with buying items online. We anticipate growth in the luxury online e-commerce industry in the region to grow 300% in the next two years as we keep seeing a steady increase in luxury brand sales and desire.
In the last 12 months, 68 percent of UAE consumers shopped online with 48 percent more likely to increase their online spend in the next one year, this is according to the 2016 Third Annual Cross-border Consumer Report by Ipsos and Paypal.
Industry experts, Mallfortheworld.com, are now urging UAE retailers to take advantage of the 3.6 hours the region’s consumers spend daily on social media to strategically position their products and brands in the market.
UAE’s high smartphone penetration, currently at over 70 percent, has also been cited as one of the key drivers of ecommerce growth. This, according to Mallfortheworld.com, presents a golden opportunity for online shopping growth with 60 percent of UAE consumers having made a purchase with their smartphone over the last 12 months.