UAE e-commerce market forecast to reach $9.2bn by 2026

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The UAE’s e-commerce market may reach $9.2 billion, and account for 12.6 percent of total retail sales by 2026, the Dubai Chamber of Commerce said in a report.

Total e-commerce sales hit $4.8 billion in 2021, compared to $2.6 billion in 2019, the report stated, based on data from research firm Euromonitor.

Mobile devices, such as smartphones and tablets, accounted for most of the e-commerce transactions last year. The mobile retail market reached $2.6 billion, accounting for 44 percent of the total e-commerce market value.

Mobile retail sales are expected to record a compound annual growth rate (CAGR) of 15.6 percent over 2022-2026 to reach $4.6 billion.

According to the study, the key trends supporting the strong growth in mobile e-commerce transactions are the availability of apps, leading to improved pricing transparency.

The growing number of loyalty rewards programmes offered by online retailers further drove up demand for online shopping in the UAE.

Preference for local websites

Shoppers preferred local retail websites to overseas retailers. In 2021, domestic e-commerce websites accounted on average for 73 percent of the total sales, while foreign websites received only a 27 percent share.

Between 2022 and 2026, foreign e-commerce platforms are predicted to grow by 19.2 percent, increasing their market share by 34 percent.

Consumer electronics in the UAE constituted the top selling online products in 2021 with a 34 percent share, consisting mainly of smartphones, phone accessories, computer accessories, tablets, computers and TVs.

Apparel and footwear accounted for 31 percent, followed by food and beverages (12 percent), media products (8 percent), personal accessories (5.8 percent), and consumer appliances (3.3 percent).

The report said that growth momentum within the UAE’s e-commerce sector is predicted to continue, supported by rising demand for online shopping, and steady investment flows in the sector’s infrastructure.

The increasing momentum will provide more business opportunities in payment systems, financial technology, electronic logistics and distribution centres, the chamber said.