In the last few years, the United Arab Emirates has become one of the most successful e-commerce markets in the world. The rapid growth of the UAE e-commerce market is based on many essential factors:
- High internet penetration rates
- Government support
- Impact of COVID-19 on shopping
- Rise of the popularity of online shopping
- Growth of tech-savvy population
- Technological advancements
- Transportation network development
- The evolution of digital payment systems
These factors impacted the rise of popularity of online shopping among people and the growth of online shopping portals in the UAE.
Nowadays, people prefer shopping online over brick-and-mortar stores. The best e-commerce websites in the UAE, like Amazon.ae, Noon.com, Shein.com, Namshi.com, etc., made it easy for customers to buy products like electronics, fashion accessories, food, clothes and more quickly without wasting time.
Here are the drivers of e-commerce business to help you understand why you should consider going digital if you think of starting an online business in the UAE.
UAE Has High Internet Penetration Rates
The first driver of e-commerce business growth is high internet penetration rates.
Statistics from 2021 show that the two countries with the highest internet penetration rates (99%) are Denmark and UAE, which means that 99% of the population can access the internet.
With technology advancement, people, especially youth, have become even more tech-savvy, which is one of the primary reasons why online shopping portals in UAE are so popular. The growth of digital technology impacted the rise of usage of mobile internet in the country. Digital marketing gained its popularity, and as more people have access to the internet, Arabic e-commerce proliferated.
The UAE e-commerce market has become fast-growing through technological advancements. For example, in Dubai, the e-commerce market works with technological devices and techniques that are current and high-level in the IT sphere. The technological developments, modern payment systems, and the rise of e-commerce platforms in the UAE made the UAE e-commerce market grow even faster.
Starting an online business in the UAE will benefit you as it would save your time and money because making use of the high internet penetration rate combined with professional digital marketing services will raise your brand awareness.
You can be one of the top e-commerce startups in the UAE with the right social media management, which you can accomplish through the help of Digilite.
Digi-Tip: It is not a must to start a new business, instead, you can make your existing business go digital by integrating an e-commerce system into your website and providing delivery services.
COVID-19 Promoted the Growth of Online Shopping
The second driver of e-commerce business growth is the pandemic. The rise of online businesses means that you become more competitive and go global.
COVID-19 changed customer’s behaviour and brought a digital shift into the market, increasing the popularity of online shopping. For example, during the pandemic, retailers in Dubai could sell their products through online shopping portals in the UAE.
Research shows that the UAE retail e-commerce market hit a record $3.9 billion in 2020, which means that the e-commerce market’s year-over-year increase was by 53%. It is anticipated that the value of the UAE retail e-commerce market will reach $8 billion in 2025.
Thus, by going digital and starting an e-commerce business in the UAE, you can stay competitive and promote e-commerce development.
Digi-Tip: As the competition increases, user experience becomes even more crucial. You need to integrate high-quality, user-friendly e-commerce systems into your online business that heightens the experience.
Going Digital Can Lower Costs
By becoming one of the many e-commerce startups in the UAE, you can lower your costs. The UAE e-commerce market is cheap and suitable for customers promoting the increase in net revenues. Also, advertising for e-commerce is more cost-effective than traditional because you don’t have to hire a third party to sell your products. Additionally, you don’t have to pay personal taxes, rent, or hire sales or guards. And as now people prefer shopping online, marketing and advertising would be much easier with the internet.
Starting an Online Business in Dubai is Hassle-free
It is easy to start an e-commerce business in the UAE, especially in Dubai. However, there are regulations that you should follow to launch a business in the e-commerce market. The UAE e-commerce market requires a license to start online shopping. For example, Dubai doesn’t allow just anyone to launch UAE retail e-commerce businesses. Thus, if you want to create an e-commerce business in the UAE legally, you must apply for the license.
Data shows that in May 2020 alone, 196 licenses were issued for the UAE e-commerce market. The cost of getting a license in Dubai may vary based on some factors (e.g. business size, your choice of a free zone or mainland, number of visas you want to apply for, etc.). Also, the cost is different in various regions. For example, if you want to get the cheapest e-commerce license in the UAE, you can apply for a free zone license that can start from AED 5750.
Thus, if you think of starting an online business in Dubai, you will need to get a license and the rest will be easy to do.
Concluding Thoughts
The UAE retail e-commerce market continues to grow, and the country is one of the fast-growing places in the e-commerce sector. The popularity rose from many factors that are mentioned above. The best e-commerce websites in the UAE made it possible for customers to get their products quickly and with high quality.
Today, the UEA retail e-commerce market is expected to reach $8 billion in 2025, which is not far from reality because the country has all the potential.
If you are considering starting your own business in the UAE e-commerce market, consider going digital. For this, you should have your own e-commerce website.
At Digilite we value user-friendliness and functionality in an e-commerce website. Your marketing strategy is one of the most important factors that you need to consider if you want your new business to succeed. And for any marketing support, we are here to help you.