Nearly half of UAE consumers expect to shop online more frequently next year

Six in 10 residents prefer to pay for their online purchases using digital channels rather than cash on delivery, finds new report

Consumers have been urged to be vigilant about online transactions and how they pay for their goods with cybercriminals stepping up their efforts. Getty Images

About 45 per cent of all consumers in the UAE said they expect to shop online more frequently next year, signalling a permanent shift in shopping habits, according to a survey by Checkout.com.

The uptick trend in e-commerce and digital payments in 2021 is consistent across the Middle East and North Africa, Pakistan region, according to a report from the payment solution provider released on Tuesday. The survey polled more than 5,000 consumers in the UAE, Saudi Arabia, Egypt, Jordan, Qatar, Kuwait, Bahrain and Pakistan in September.

Around 47 per cent of consumers across the eight countries said they expect to shop online more frequently over the next year. Only 15 per cent expect their online shopping frequency to decline, while the remaining 38 per cent expect it to remain about the same as now.

While there has been a sudden surge in e-commerce and digital payments this year due to the impact of Covid-19, what we are seeing today is more than a temporary change in consumer behaviour

“While there has been a sudden surge in e-commerce and digital payments this year due to the impact of Covid-19, our report suggests what we are seeing today is more than a temporary change in consumer behaviour,” said Sebastian Reis, executive vice president of global e-commerce at Checkout.com. “Our internal data shows an 86 per cent increase in digital payment transactions on our platform since the start of the pandemic in the region.”

This data echoes results of a joint study by Dubai Economy and Visa last week, which found that e-commerce transactions will account for 28.2 per cent of total card payments in the UAE this year. The UAE had the biggest annual spend per online shopper at $1,648 in the wider Middle East, North Africa and South Asia region, according to the study.

About 53 per cent of the region’s consumers prefer to pay for their online purchases through digital channels rather than cash on delivery (36 per cent) or bank transfers (10 per cent), the Checkout.com report showed.

Digital payments are the most preferred payment method among online shoppers in the GCC, including Bahrain (74 per cent), Qatar (66 per cent), the UAE (64 per cent), Kuwait (59 per cent), and Saudi Arabia (54 per cent). Meanwhile, cash on delivery is the preferred payment method in Pakistan (66 per cent), Egypt (54 per cent) and Jordan (51 per cent), the report showed.

Among those who shop online at least once a month, 62 per cent usually pay by card or digital wallet compared to 44 per cent who are less frequent online shoppers, according to Checkout.com.

“Robust digital payment options have become an integral part of what consumers expect from merchants. This presents a major opportunity for businesses across the Menap region,” Mr Reis added.

Some 48 per cent of online shoppers across the Menap region said that a safe, secure and convenient payment process is the most important factor for their online experience besides the price. Payment process ranks higher than fast delivery/shipping (32 per cent) or an easy return process (15 per cent).

The pandemic is accelerating the growth of e-commerce, particularly in the online purchases of prepared meals (41 per cent report higher online purchasing frequency since Covid-19), clothing (37 per cent), groceries (33 per cent) and electronics (30 per cent), the Checkout.com report found. While online orders of prepared meals and groceries appear to have surged evenly among males and females, men seem to be driving most of the e-commerce growth in electronics, while women account for a stronger increase in online clothing purchases.

The Checkout.com report also found that the Menap region’s consumers have embraced e-commerce largely, with 90 per cent saying they shop online and nearly half (44 per cent) doing so at least on a monthly basis.

The Covid-19 pandemic is driving a significant share of the current e-commerce and digital payment transactions in the region, as 40 per cent of online shoppers said they are buying and paying online because of the pandemic. Getty

The pandemic is increasing e-commerce penetration and digital payment transactions in the region, with 40 per cent of online shoppers buying and paying online.

Certain demographic groups are likely to drive e-commerce growth more than others for online merchants. These include the most affluent consumers (56 per cent), those already shopping online at least on a monthly basis (55 per cent), men aged 35 and older (55 per cent), and those using digital payments rather than cash or bank transfers to pay for their online purchases (54 per cent), the report said.