A recent market report published by global payments and technology giant Mastercard has revealed that UAE consumers have surpassed their counterparts in markets such as the US and Canada in their shift to the online portals for purchases.
Mastercard’s “Recovery Insights” report states that consumers in UAE are making 21 percent more purchases from online stores when compared to earlier numbers. The report also highlighted the growing shift by Saudi customers towards online buying as well.
The report pointed out that “consumers worldwide are making purchases at a greater number of websites and online marketplaces than before. Residents in countries like Italy and Saudi Arabia are buying from 33 percent more online stores, on average, followed closely by Russia and the UK.”
The global payments processor has been studying how spending habits have changed and digital transactions accelerated in the retail space since the COVID-19 pandemic hit the world.
In 2020, consumers worldwide were estimated to have spent an additional $900 billion in retail online.
“Put another way: in 2020, e-commerce made up roughly $1 out of every $5 spent on retail, up from about $1 out of every $7 spent in 2019,” Mastercard declared.
Transcending to Offline Channels
The report points out that even offline shops have seen a considerable increase in digital transactions with a minimum of 2.5 percent increase in cashless transactions.
“COVID-19 accelerated the transition to digital – with more consumers moving from plunking down cash to touch-free payments,” the report asserted.
The Mastercard report observed that the changes in spending habits are likely to last longer with at least 20 to 30 percent of the COVID-related shift to digital payments expected to be permanent.
Mr. Bricklin Dwyer, Mastercard Chief Economist and Head of the Mastercard Economics Institute remarked that “while consumers were stuck at home, their dollars traveled far and wide, thanks to e-commerce.”
“This has significant implications, with the countries and companies that have prioritized digital continuing to reap the benefits. Our analysis shows that even the smallest businesses see gains when they shift to digital,” the Mastercard Chief Economist pointed out.
Overwhelming growth for Essentials
Some of the biggest gains in digital transactions were seen at retailers that sell essentials online, which include supermarkets and grocery operators.
“We anticipated 70 percent to 80 percent of the grocery e-commerce surge to stick around for good,” the report stated.
With an average spending of $1,648, UAE consumers are the biggest spenders on the Internet in the MENA region, as per a report by the Dubai Economy and Visa.