The ecommerce sector has grown significantly worldwide over the last two years, chiefly due to lockdowns enacted because of the Covid-19 pandemic. Majority of the businesses have shifted to digital marketing and selling their products online.
EZDubai, a fully dedicated ecommerce zone in Dubai South, launched a report titled Ecommerce Sector in the UAE 2020 Insights in partnership with Euromonitor International and Jones Lang LaSalle (JLL) in May this year.
The UAE and Saudi Arabia together accounted for 75 percent of total ecommerce sales, the report said.
It also attributed the industry’s growth in the UAE to factors such as the country’s high purchasing power, extensive use of social media, and high smartphone penetration rates, when compared with other countries in the region.
The retail trade in stores is expected to expand at a compound annual growth rate or CAGR of 1 percent from 2019 to 2024. But ecommerce is expected to increase at a CAGR of 19 percent during the same period, despite the pandemic, or possibly because of it.
By 2024, internet penetration in the Middle East may have doubled to 6 percent from 3 percent in 2019, indicating that ecommerce need not look back in the coming years.
New digital rules
With the continuing growth of ecommerce in the Arab world, many countries have begun to adopt rules to make it easier for investors to develop this sector. The UAE, for example, has worked to modernize digital payment networks and expand logistical infrastructure.
Souq.com, which was established in 2005, specializes in selling electronic devices and other products. Amazon paid $580 million to buy the company in 2017.
The Souq platform has millions of users in Egypt, Saudi Arabia, and the UAE, and allows sellers to display their products digitally.
Souq.com is competing with six other ecommerce platforms: Noon, Carrefour, Sharaf DG, Namshi, Jumbo Spare Parts, and Letstango.
Noon is popular in the UAE and Saudi Arabia, and sells clothes, gadgets, household items, and all children’s needs and accessories.
Mohamed Alabbar, the founder of Dubai-based Emaar Properties, launched Noon in 2016. The platform has collaborated with Tier Mobility GmbH of Germany to promote sustainable mobility and encourage users to use alternative, eco-friendly forms of transportation.
The Ounass website offers luxury design and products, as the customer can buy fashion collections from noted international designers, including those from the Middle East.
In addition, bags, shoes, accessories, cosmetics, and various household products also are available on the Ounass website. This platform is active in the GCC countries with headquarters in Dubai.