E-commerce transactions in the UAE are forecast to total $16 billion (Dh59bn) in 2019 and grow 23 per cent annually between 2018 and 2022, according to a joint study by Dubai Economy and Visa.
The report by the Dubai-based government body and the payments company found that the UAE was the fastest growing e-commerce market in the Middle East and North Africa. The study also covered the US, Canada, UK, Sweden, Australia and Singapore as well as emerging markets such as Brazil, South Africa and Malaysia.
"By growing the e-commerce sector in the UAE, there is a tremendous opportunity to drive economic growth and extend the benefits of digital payments to residents and businesses in the country," Marcello Baricordi, Visa's general manager for the Mena region, said.
Online retail in the UAE has been on an upswing with nearly two-thirds of small retailers in the Emirates reporting higher revenues and footfall after accepting digital payments, according to an earlier study by Visa. Use of mobile wallets in the UAE has increased with global giants such as Google Pay, Samsung Pay and Apple Pay entering the market along with local players like Etisalat Wallet and Beam Wallet, as well as local banks.
The UAE's mobile wallet market is expected to grow at a compound annual rate of 24 per cent and reach $2.3 billion (Dh8.44bn) by 2022, according to a report from TechSci Research in the US. Digital commerce and cashless payments are identified as top priorities in the UAE's Vision for 2021, and it aims to become a cashless society by 2020, as per the Smart Government initiative.
At 4.2 per cent of total sales, e-commerce penetration in the UAE beat Mena and GCC averages of 1.9 per cent as well as 3 per cent, according to the latest Visa study.
Higher internet penetration, an advanced digital infrastructure and a younger population eager to embrace technology-driven solutions were behind the higher growth numbers.
The typical value of an e-commerce transaction in the UAE in 2018-2019 was $144, which was sizeable compared with averages for mature and emerging markets at $79 and $26, respectively.