The e-commerce market in the United Arab Emirates (UAE) has seen exponential growth in the last couple of years. While an earlier report in 2022 by the Dubai Chamber of Commerce predicted that the UAE e-commerce retail market would reach $9.2 billion by 2026, the growth has been so phenomenal—it reportedly crossed $11 billion in 2024 itself and is expected to reach $25 billion by 2029 with an annual growth rate of over 12 per cent as per some estimates and industry sources.
Further bringing tremendous optimism to the growth story of e-commerce in the UAE, another significant study was done by EZDubai, a dedicated e-commerce zone in Dubai. The study concluded that the total size of the e-commerce market in the UAE reached AED 27.5 billion in 2023, with projections to exceed AED 48.8 billion by 2028, as mentioned in their e-commerce in the Middle East and North Africa 2023 report.
Various other market studies by the government and independent agencies like Euromonitor, Statista, Mordor, etc have recognized this rapid expansion of the e-commerce opportunity in the UAE.
Proactive leadership, conducive policies, rapid infrastructure development and responsiveness towards the stakeholders’ needs differentiate the UAE as a compelling e-commerce destination. The emirates of Dubai, Abu Dhabi and Sharjah are leading the pack as they are striving to create a vibrant e-commerce ecosystem in the country through their respective free trade zones.
New entrants are encouraged by simplified licencing procedures and other strategic initiatives aimed at fostering this growth. This has also encouraged a number of e-commerce startups at the same time. Consequently, the e-trader licence category in Dubai itself has been growing at the rate of 25 per cent, with over 14000 licences issued last year as per a recent report by Black Sawn Services.
While the Abu Dhabi Chamber unveiled an ambitious UAE Digital Commerce and Innovation Growth Plan, Shams Sharjah Media City in Sharjah harbours local e-commerce firms. In the Emirate of Ras-al-Khaimah, RAKEZ has been actively promoting e-commerce businesses.
Dubai has gone a step further and created the Dubai CommerCity and EZDubai. Dubai CommerCity is the first leading free zone dedicated to the growing digital commerce market in the Middle East and North Africa region. With an ambition to provide a perfect digital commerce ecosystem in which businesses can thrive, Dubai CommerCity aims to be the one-stop-shop for all digital commerce needs, serviced through its Business, logistics and Social clusters. EZDubai and Dubai CommerCity together portray a strong commitment towards the ambitious plans for digital economy and e-commerce in the UAE.
As per Statista, another major trend catching up is that of quick commerce (q-commerce). The q-commerce market in the United Arab Emirates is seeing increased demand because of the nation's dense population and rapid lifestyle. Revenue is anticipated to hit $3.65 million by 2025. This market is projected to grow at an annual growth rate (CAGR 2025-2029) of 8.02 per cent, resulting in a projected market volume of $4.97 million by 2029.
Recently, Flowwow reported a 62 per cent increase in purchases in MENA, an 86 per cent growth in sales turnover, and a 15.76 per cent rise in the average order value in November–mid-December 2024 compared to the previous year. In the UAE as well, the Average order value (AOV) has increased and now stands at $102.
FastCompany Middle East noted that Fashion, toys, DIY, hobbies, electronics and media, food and personal care, and furniture and appliances are the leading e-commerce segments by market share, followed by home and laundry care products.
Around 49 per cent of UAE consumers shop online frequently, and approximately 47 per cent of the population relies on credit cards for online transactions. This is significantly higher than the global average of 18 per cent, highlighting the advanced state of digital commerce within the UAE.
Recognizing the significance and momentum of this sector, the Dubai Chamber of Commerce has constituted a dedicated business group, e-Commerce Business Group (ECBG), to provide a platform for driving policy changes and legislative improvements that positively impact the economy and streamline business processes, ultimately enhancing business operations and contributing to Dubai's reputation as a leading global business hub for e-Commerce. E-commerce is well poised to be the next economic engine driving business growth in the UAE.
Dr Dhrupad Mathur
The author is a founding member of the e-Commerce Business Group, Dubai Chambers, and an Associate Professor in Technology Management at S P Jain School of Global Management, Dubai.
This piece is done in collaboration with DataLEADS, which is an award-winning global digital media and tech company.
