UAE eCommerce sector altered radically by the Pandemic; Experts

By Rahul Vaimal, Associate Editor
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Experts are of the opinion that the COVID-19 pandemic will leave a lasting mark on consumer behavior and drive an increasing share of e-commerce in the UAE retail sector.

AlixPartners’ Middle East managing director, Karl Nader, said the pandemic has accelerated the shift to online, particularly in important categories such as grocery shopping.

“Prior to the pandemic, the grocery industry was very slow to adapt across the region with online sales accounting for less than one percent of total grocery sales in the UAE and KSA. However, today, this number varies by the grocer, with some of the leading grocers doubling their share of online sales during the pandemic,” he said.

The e-commerce spending has exceeded forecasts by more than $52 billion since the lockdown started in March, according to a new study by Adobe.

Anastasia El Hage, the HUBB Global Group’s founder and CEO pointed to a change in customer behavior, as people around the UAE became more receptive to e-commerce. She strongly believes that some retail companies faced their problems head-on and made strategic decisions to grow their online sector and these are the companies that will possibly emerge as market leaders.

She also noted that customers are likely to benefit from this move due to the simplicity and convenience of making regular transactions, including large purchases.

Abboud Ghanem who is the Middle East and Africa regional vice president at Alteryx, clarified that the market environment has changed dramatically over the course of the pandemic, and will continue to do so for months to come. Consumers are looking for a simpler, more immediate and tailor-made experience that too at a reasonable cost.

He added that “the retailers need a more holistic view of their customers and their supply chain and they have to learn to engage with their customers faster and create dynamic merchandising and offers in order to stay relevant.”

Most non-essential retail stores in the KSA and UAE are operated by diversified conglomerates that do not own the brand. He revealed that “it took them some time to figure out the optimal e-commerce model to operate. Moreover, online still represents a very small share of the business, and except for a handful of groups, it is managed as a side business and often supported by separate teams.”

Nonetheless, as consumers start moving more of their personal interaction and purchases to digital platforms, he said retailers should not only strive to enhance the omnichannel experience of their customers but also better incorporate and handle omnichannel operations.