The UAE saw a rise in online consumer spending, largely led by a 21 percent increase in the number of online shops as the world experienced an explosive boom in retail eCommerce, with an additional $900 billion being invested in 2020.
According to reports, the UAE, which is one of the region’s leading online retail markets, has witnessed a 44 percent year-on-year increase in the number of high-volume eCommerce trading partners from 2019 to 2020.
The report stated that “as COVID-19 kept consumers around the world at home, nearly everything from groceries to gardening supplies was purchased online. Put it another way: in 2020, eCommerce made up roughly $1 out of every $5 spent on retail, up from about $1 out of every $7 spent in 2019.”
According to the Dubai Future Foundation, before COVID-19, the UAE’s digital economy contributed 4.3 percent to the country’s GDP (Gross Domestic Product). The eCommerce industry in the country is expected to hit $62.8 billion by 2023 if current trends continue.
The reports suggested that roughly 20-30 percent of the COVID-related shift to digital would be permanent around the world.
The impact of COVID-19 on eCommerce
As per the reports, the Gulf region’s booming regional online shopping market is projected to expand by more than a third this year, reaching a gross value of $30 billion.
By the end of 2020, the region’s eCommerce industry was worth $22 billion, due to online shoppers from Saudi Arabia, Egypt, and the UAE. The three countries account for 80 percent of the region’s overall eCommerce market. By 2024, the market value in Saudi Arabia is projected to hit $8.2 billion.
According to sources, customers around the world are purchasing from a larger number of websites and online marketplaces than they were previously. On average, residents in countries such as Italy and Saudi Arabia buying from 33 percent more online shops, followed by Russia (29 percent), the UK (22 percent), and the UAE (21 percent).
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 eCommerce. 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.”
Key retail industries, which had the smallest digital share before the crisis, saw some of the biggest gains as consumers adapted as a result of the pandemic. With the emergence of new customer preferences and given the low pre-COVID user base, we expect globally that 70-80 percent of the grocery eCommerce surge to stick around for good.
Consumers expanded their eCommerce footprints during the pandemic, purchasing from up to 30 percent more online retailers, as global international eCommerce grew 25-30 percent.