E-commerce explosion in the UAE

The UAE retail sector could see an e-commerce explosion within the next few years, say industry leaders.

Speaking at a London Business School thought leadership forum, industry leaders predicted that a slow start to the online shopping could be about to change dramatically. Ahmed Galal Ismail, CEO at Majid Al Futtaim – Ventures and an alumnus of the School, said: “As compared to other emerging retail markets, Dubai has so far seen the lowest e-commerce penetration. In 2013, only nine per cent of shoppers we recently surveyed said that they have made online purchases in the last 12 months.”

However, he said: “Today’s young shoppers have grown up with smart phones as their first screens. The UAE has some of the highest mobile and smart phone penetrations figures in the world and studies have shown that as people use the Internet for more and more of their product research, transactions will inevitably be driven online.”

Even consumers not shopping online yet, are increasingly using the internet to research different product offerings and compare prices of competing brands According to recent studies, Ismail pointed out that as much as 83 per cent of internet users in the MENA region log on to the Internet daily and 53 per cent research products purchases online.

Euromonitor and Goldman Sachs estimate that 19 per cent of total apparel retail in the MENA region will be online by 2030. In fact, online retailers such as Net-a-porter already cite the UAE and Qatar among their top world markets.

Local retail players are responding to these changing trends by following global brands online. According to Nisreen Shocair, another former student of London Business School who was speaking on the panel, online retailers are gaining market interest and will eventually take market share from traditional retail.

“Traditional retailers are giving online retailing more importance today than they did one or two years ago,” said Shocair.  “This is a positive change, since the online channel provides another opportunity to service our existing customers.”

“As the local market matures, we expect to see online retailers such as eBay and Amazon open windows to the UAE and the GCC,” added Ismail. “This would contribute significantly to the growth of e-commerce in the region.”