Why UAE is About to Become the Hub for Online Shopping

Written by: Aqeel Sharif

Online shopping soaring all across the globe, as brands are picking up its pace, taking full advantage of the Covid-19 Pandemic, and how it has reshaped individual and consumer preferences, when it comes to shopping, and more specifically, shopping online. 

If we talk about UAE, a country that was more popularly known for its exotic and glamorous retail shopping experience, is now picking up its pace with online shopping. The surprising part is that the pace at which online shopping in UAE is growing, is far more than the retail sector, even after the uplifting of Covid-19 restrictions. It is quite intriguing to see the country, who’s consumers were accustomed to traditional shopping, are now predominantly focusing towards the E-commerce sector, and letting the online shopping vibe completely sink in.

UAE Shoppers Spending More Time Online

It is no hidden fact that Internet penetration rates increased significantly over the past two years, and people are now using more smartphones than ever. This is all due to amplified digital transformation being practiced by governments and brands. The use of digital payments and mobile shopping is becoming more and more mainstream, so much so that more than 40% of shoppers in UAE spent time on shopping from online grocery sites, than paying direct visits to retail grocery stores. The onset of Covid-19 and its initial surge causing people to stay at home, was a direct contributor towards the growth of online shopping. The biggest gap between E-commerce and retail activities was observed in November of 2020, when online basket spends of consumers accounted to nearly AED 280, which was significantly more than the in-store spends of AED 138. 

Rise in Digital Payments and Contactless Spending

Today, consumers in the UAE are more comfortable with transacting through digital channels, and the use of digital payments has become so widespread in the country, that every 3 out of 4 consumers in UAE prefer to opt for online payments. Along with that, the Government of UAE is heavily promoting the Fintech Sector, given the significant rise of Digital Payments in UAE, respectively. Contactless spending volumes soared to 53% during initial 2020, while increasing further to 64% in December 2020. The figures have increased even further in 2021, with an additional 20% increase for the first half of 2021, alone, despite the ease in lockdown restrictions. Consequently, cash-based and traditional transactions went down by a whopping 54% in the year-end, 2020. These changes aren’t something to be avoided, given the fact that these activities are only increasing in 2021, and expected to increase even further in the coming years. CEO of Nandan Mergroup believes that these changes should be seen as permanent in consumer attitudes in UAE. 

Consumers are getting accustomed to online shopping in UAE significantly, and they are now habitual of it. Brands are making consistent efforts to make online shopping experience even more captivating for shoppers in UAE, by introducing virtual shopping rooms, floating malls with digital touch points, discounts and offers like Ounass Coupon Code, Level Shoes Coupon Code, Amazon UAE coupon code, and many other ways to intrigue online shoppers in UAE. 

Summing it Up

By now, you must be well-aware as to why UAE is on the verge to become the most unique shopping hub for consumers, just like it maintained its standards on traditional shopping experience, which is acclaimed by everyone around the Globe. The Government of UAE is extending efforts to increase its digital transformation drive to promote E-commerce platforms on setting up in the country. And these efforts haven’t gone in vain.

Per visit spends online shopping platforms, specifically online grocery shopping, increased to a record 93% in the year-end 2020, and today, consumers are more comfortable with shopping for groceries online, with brands like Carrefour, Trolley, and Supermart are trying to improve app-based shopping experience to accommodate the shift of consumers towards online grocery shopping. 

In short, the projections for the next 5 years are quite promising, as online shopping is expected to, at the very least, maintain its current pace, and accumulate to about 20% increase annually. This is very exciting, given the fact that things are normalizing and lockdown restrictions are no longer present in UAE, yet the country is on the track to become the hub for online shopping.