Are you planning to start or expand your e-commerce business in the United Arab Emirates (UAE)? With a predicted revenue of US$11,782.3 million by 2023, the UAE is the 28th largest market for e-commerce, placing it ahead of Belgium. Moreover, the revenue is expected to show a compound annual growth rate (CAGR 2023-2027) of 8.6%, resulting in a projected market volume of US$16,373.4 million by 2027. With an expected increase of 10.6% in 2023, the UAE e-commerce market is contributing to the worldwide growth rate of 17.0% in 2023.
In this post, we will provide you with some tips to scale your e-commerce business in the UAE, taking into account the market size, growth rate, and top players.
Market Size and Growth
The UAE e-commerce market comprises five main markets: Fashion, Electronics & Media, Toys, Hobby & DIY, Food & Personal Care, and Furniture & Appliances. Fashion is the largest market and accounts for 38.7% of the UAE e-commerce revenue, followed by Electronics & Media with 19.9%, Toys, Hobby & DIY with 15.4%, Food & Personal Care with 13.6%, and Furniture & Appliances with the remaining 12.4%. Understanding these market segments and their potential will help you to target your products and services to the right audience.
The biggest player in the UAE e-commerce market is Amazon.ae, with a revenue of US$477.6 million in 2022. Amazon.ae is followed by Namshi.com and Carrefouruae.com as the second- and third-largest stores with US$264.8 million and US$223.2 million, respectively. Together, the top three stores account for 35.2% of the top 100 online stores’ revenue in the United Arab Emirates.
Top Tips for Scaling Your E-commerce Business in the UAE
Focus on Mobile Optimization
One of the essential things that e-commerce businesses need to focus on in the UAE is mobile optimization. According to a study, 57% of online shoppers in the UAE use their mobile devices to shop. Therefore, it’s crucial to optimize your e-commerce website for mobile devices. This means creating a mobile-friendly website that loads quickly, is easy to navigate, and has a seamless checkout process. By doing so, you’ll provide a better user experience, which can lead to increased conversions and sales.
Localize your website and marketing campaigns
The UAE has a diverse population with different cultural backgrounds and languages. Therefore, it is crucial to localize your website and marketing campaigns to cater to your target audience. You need to take into account factors such as language, currency, and cultural nuances to create a personalized shopping experience for your customers.
Leverage Social Media
Social media is an essential part of any e-commerce business’s marketing strategy, and this is especially true in the UAE. In the UAE, 99% of internet users are active on social media, making it a powerful platform to reach potential customers. Therefore, businesses should leverage social media to promote their products and services, engage with customers, and build brand awareness. It’s essential to create a social media strategy that aligns with your business goals, target audience, and brand identity.
Offer Local Payment Options
Offering local payment options is another critical factor for e-commerce businesses in the UAE. The majority of online shoppers in the UAE prefer to pay with credit or debit cards, but other payment options, such as cash on delivery and e-wallets, are also popular. Therefore, businesses must offer a variety of payment options to cater to different customer preferences. Additionally, businesses should ensure that their payment process is secure and easy to use to build customer trust.
Provide Fast Shipping
Fast shipping is a crucial factor in the success of e-commerce businesses in the UAE. According to a survey, 48% of online shoppers in the UAE expect their orders to be delivered within two days. Therefore, businesses should ensure that they can provide fast and reliable shipping services to meet customer expectations. Additionally, businesses should communicate their shipping policies clearly to customers to avoid any confusion or delays.
Offer Personalized Customer Service
Personalized customer service is an effective way to build customer loyalty and retention in the UAE. Online shoppers in the UAE value personalized communication and expect prompt responses to their queries and concerns. Therefore, businesses should invest in providing personalized customer service, such as offering live chat support, responding promptly to emails and social media messages, and addressing customer concerns in a timely and efficient manner.