Future of E-COMMERCE industry in Middle East after COVID-19


COVID-19 pandemic has undeniably affected each and every industry across the world.  An important domain in which the pandemic has left an everlasting blemish is the commercial sector. 

Despite the slump faced by the commercial sector at the onset of the pandemic, long stretches of progress have occurred recently with the offline market moving to the web. This growth can be mainly attributed to the increased demand for quick, comfortable, and speedy delivery of products and services. With all the individuals stuck at their homes due to lockdowns, and local businesses being completely shut, either partly or completely, e-trade appeared to be a protected, efficient and advantageous choice during the COVID-19 outbreak.

While buyers loved to purchase goods by themselves visiting the stores in person, COVID-19 has forced individuals to opt for web-based business during the lockdown. As per a joint report from Dubai Economy and Visa, UAE has the most exceptional e-commerce economy in the Middle East at present, uncovering an expected yearly development of 23% in the year 2022. The past year of 2020 saw a massive hike of 19.8% in the retail e-commerce sales growth worldwide for the Middle East region. Moreover, the countries of the Middle East and Europe (mainly UAE and Switzerland) are believed to surge past the other market contenders in the first half of the decade. Even with the ending of lockdown now looming across the world, this hop in online clients is not going to decline in the near future.


Effects of COVID-19 on E-Commerce


Varying spending habits of buyers

Since the beginning of the lockdown, web-based businesses across the world have seen a remarkable upsurge in personal hygiene items, electronic merchandise, and individual wellness products. Customers additionally became conservative in money spending and restrictive towards expensive products during a hard time of monetary vulnerability. This demand for high-quality products for reasonable prices was fulfilled by various local brands. With many local brands exploiting this move, high-esteem organizations were compelled to offer lucrative discounts for the time being to hold their client base.


An inclination for electronic payments

The COVID-19 pandemic radically affected the individual perspective towards dealing and transacting money. A broad affirmation of the risks presented by the use of hard money catalyzed a move towards contactless and advanced electronic choices. Thus, web-based businesses have seen a huge decrease in cash on delivery (COD) orders, and a remarkable expansion in digitally paid orders. Market researchers anticipate that this should flag the start of a long haul and an essential move in changing the transaction habits of customers. 


Demand for better logistics

The abrupt flood in the utilization of online businesses resulted in a demand to upscale the existing logistics networks. Everyone was reliant upon these online stores for daily needs during the initial lockdown period. Businesses were increasingly reliant on advanced logistical networks with the demand for competent delivery partners increasing by 60% during the first three to four months of COVID-19.

State of E-Commerce today after COVID-19

Online businesses have become more predominant universally. With quarantine and isolation influencing numerous individuals around the world, the e-commerce domain is set to develop and enhance much more quickly. 

Between the months of February and March, the European region (predominantly Italy) had a massive surge of 90% in online deals. Currently UAE is leading the pack of web-based businesses globally. The current electronic economy adds to 4.3% of the country’s GDP and the UAE’s online business industry is set to achieve a target of US$ 63.8 billion by 2023. 

There have been a few decisive results here:


Increased usage of e-businessess websites

Website traffic to the main online business sites in the Middle East and Europe have seen a yearly development of 150% since 2019. The clients catered through these e-businesses have increased from 3 million to 21 million each month. The complete number of ventures offering internet business has significantly increased from around 45 to more than 150 during the same period. Web-based media, for instance, bounced from 54 to 90 percent in the Kingdom of Saudi Arabia in 2020 alone. The most noteworthy fact is that the total screen time is higher than at any other time before, with clients surfing e-commerce platforms like Amazon, Namshi, and Noon for 9 to 12 minutes overall, and taking a glance at 7 to 8 pages each time.

More conversions per visit

Online business organizations have presented various highlights that are incredibly alluring to buyers such as the multi-classification of items that are accessible all around the world; admittance to reviews and ratings; limited offers; quick and reasonable deliverability from homegrown and global business ventures; free and bother free returns and competitive pricing of the products. Including 24×7 availability has taken e-commerce to a whole new level and it’s no big surprise that the conversion rates have taken off. Previously, the conversion paces of top online retailers were 2 to 3 percent. Today, the predominant web-based business players such as Amazon and Noon brags changes of 3 to 5 percent and even accomplishes as high as 15% across different classifications, particularly during occasions like Black Friday deals and Yellow Friday deals.

The adoption and ascent of omnichannel

By setting up the brand sites to pair with actual stores, retailers are currently ready to offer smooth progress between the online and offline markets. The new information-driven advancements have shot up the sales and purchases exponentially, empowering retailers to offer items that are more client-driven instead of supplier-driven. Tactics such as ‘Purchases on the Web and Get from the Store’ have substantially expanded both reach and revenues.

The rise of style, beauty, and online food delivery industries

In the course of recent years, the style and beauty industry has developed at a yearly pace of 18%, which is multiple times faster than normal retail. Moreover, it has presently captured the market capitalization of approximately $5 billion. The online food and grocery conveyance has been developing at an excess of 20% every year since 2017 and has become a $304.98 billion growing market today. Online food retail infiltration is 2 percent in developing countries and 6-8 percent in developed economies. However, last-mile models (for instance, adaptable delivery options and live price comparison) for the food economy have critical space to advance.

Create an online store,launch and grow your business.

How is speeding E-Commerce adoption benefitting consumers?  

In a study shared by the Dubai Economy, Dubai Police, and Visa in June 2020, it was seen that 49% of purchasers were shopping on the web more since the COVID flare-up, with most of these clients (61%) presently utilizing cards or advanced wallets to pay online over cash on delivery (COD). The post-COVID-19 standpoint is that 43% have kept utilizing electronic payments and 48% will decide electronic payments online over COD for future e-commerce transactions. Most of the UAE buyers have diverted online to reach out to retailers whose stores were shut during the pandemic.

The sped-up development of web-based businesses brought about during the COVID-19 outbreak gives a wide scope of expected advantages for the locale, including:

  • Furnishing a versatile channel to interact with clients as well as hold and pull in customer spending.
  • Give better and prominent choices to shoppers at aggressive costing with more focus on commitment among online organizations and buyers.
  • Engage with territorial and global business sectors.

Present scenario and funding in online businesses

It should be noted that web-based businesses are not generally limited to conventional shopping alone. The UAE’s web-based business ecosystem is highly advance and assorted, due to which it has been expected to have an extended worth of $48.6 billion by the end of 2022. In light of this, the Dubai Government has ventured to focus on building a free trade zone explicitly committed to an online business, called “Dubai Commercity”. The aspects of Business, Logistics, and Social will be taken care of. This will boost the motivating forces to energize and create new web-based business players, especially after the COVID-19 outbreak. To further increase the applications for online store licenses, the process of acquiring them has been immensely simplified.

The Telecommunications Regulatory Authority (TRA) noticed a significant number of about 51 applications during the first week of April 2020 (early-COVID period) for opening e-commerce stores in UAE.

The UAE has a rising and perennial set of online business contenders. The present notable contenders are Amazon, Deliveroo, Namshi, Noon, and Careem Eats. Potential newcomers like Carrefour have effectively built up a solid omnichannel web-based business platform and are competing with established players in the market. As innovation and technology advances, we are probably going to see a boom throughout the years to come. 

Looking ahead

E-Commerce, regardless of being retail, service-oriented, transactional, or government, has outstanding space for development in the UAE. Coronavirus may have been a gas pedal for this turn of events. Regardless, the UAE has been ready for a genuine online business flood, both in cross-market competition and client use. Along with the expanded target of UAE organizations and government on digitalisation, it is an undeniable truth that the UAE’s online business future is looking extremely solid.

Start Your Business

in Online