Online shopping soars in UAE as pandemic transforms consumer attitudes

Shoppers spent 40 per cent more per visit online than they did in stores in 2020

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UAE shoppers spent 40 per cent more per visit on supermarket websites than in-store during 2020 as the Covid-19 pandemic sparked a shift in consumer attitudes.

The initial surge in online shopping came in March as the onset of the virus prompted authorities to introduce stay-at-home measures.

But new data indicates the change in spending patterns could be here to stay.

The biggest gap between e-commerce and in-store transactions was recorded in November, with average online basket spends amounting to Dh279, more than double the Dh138 spent in-store, according to digital payments company Network International.

The past year has fundamentally transformed one of our biggest weekly chores

This can be compared to a 45.6 per cent difference in the early stages of the outbreak in March 2020, when the e-commerce basket spend was Dh294 compared to Dh202 in stores.

Another potential long-term trend can be seen in the way residents pay for their goods.

Contactless spending volumes climbed since the start of the pandemic lockdown, up 53 per cent in March and increasing further to 64 per cent in December.

Regular cash-based transactions were down by 54 per cent in the last month of the year.

These changes should be seen as permanent shifts in consumer behaviour, said group CEO Nandan Mergroup.

“The past year has fundamentally transformed one of our biggest weekly chores, driving a significant portion of the population to do their supermarket shopping online.

“Looking ahead, it’s clear that an increasing number of consumers may continue to shop from the comfort and safety of their homes, appreciating the convenience that e-commerce and contactless transactions can bring them,” he said.

The rise in per visit spend is accompanied by a 93 per cent surge in overall online supermarket spending during March.

This increase in online orders continued throughout 2020, jumping to 114 per cent in May, and 280 per cent and 152 per cent in November and December, respectively.

Safety concerns and conveniences were two key drivers in this exponential growth, but the increase can also be partly attributed to UAE supermarkets quickly developing online delivery services, and the start-up of new e-grocery platforms.

Spinneys started delivering online orders in June, while Waitrose launched its first e-commerce platform outside of the UK in October. Abu Dhabi-based Agthia Group registered a 100 per cent growth across its own e-commerce channels in 2020, after swapping from supplying malls and supermarkets to delivering direct to consumers.

Food delivery and ride-hailing apps also rapidly pivoted during the early days of the pandemic to include groceries and other essentials as part of their offering.

Meanwhile, spending from physical visits to supermarkets in the UAE consistently declined, falling from 32 per cent (68 per cent online) in March to 6 per cent in June, before rallying briefly to 12 per cent in December during the Dubai Shopping Festival.