UAE E-Commerce Booms To $17bn By 2025 On Quick-Commerce & Metaverse - Smart Zones® UAE
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UAE E-commerce Market Projected to Reach $17 Billion by 2025, Fueled by Growth in Quick Commerce and Metaverse Integration

The UAE’s e-commerce sector is experiencing phenomenal growth, with projections indicating a market value of $17 billion by 2025. This expansion is attributed to several key factors. Government initiatives play a significant role in fostering a supportive environment for online commerce. Additionally, rising internet penetration and widespread smartphone adoption have created a robust digital infrastructure. Most importantly, consumers are increasingly embracing the convenience and efficiency of online shopping experiences.

The research by YallaHub, a UAE-based quick-commerce-as-a-service (QaaS) platform, highlights the growing popularity of quick commerce as a major driver of this trend. Notably, the market is also witnessing the emergence of “metaverse e-commerce,” which presents exciting new opportunities for brands to engage with customers.

To ensure orderly and sustainable growth, the UAE has recently implemented new regulations for licensing and governing the e-commerce sector. This signifies the government’s commitment to fostering a robust and trustworthy online marketplace.

The study further identifies advancements in digital payment methods and the rising popularity of “buy now, pay later” (BNPL) options as contributing factors to the e-commerce boom.

UAE E-commerce Market Poised for Explosive Growth

Market analysts predict a surge in the UAE’s e-commerce market in the coming years, with projections reaching $9 billion by 2024. This translates to a market penetration of 66.1% and a Compound Annual Growth Rate (CAGR) of 6.54% between 2024 and 2028.

Product Categories Leading the E-commerce Boom

The research reveals that toys, DIY (Do It Yourself) and hobbies-related products topped e-commerce sales in the UAE in 2023, accounting for 29% of the market. Fashion goods followed closely behind at 27%. Electronics and media (18%), food and personal care (13%), and furniture and appliances (12%) comprised the remaining significant categories.

Shifting Consumer Preferences Drive Online Sales of Home and Laundry Care Products

Significantly, YallaHub’s research indicates a remarkable surge in demand for online home and laundry care products in 2023. Consumers are increasingly comfortable purchasing these everyday essentials through e-commerce platforms, demonstrating a shift in shopping behavior.

The YallaHub study projects continued growth for this segment, with home and laundry care revenue expected to reach $75.66 million by 2024. Furthermore, the research anticipates a steady rise in market penetration for this category in the years to come.

Similar positive outlooks are forecasted for the e-commerce market for tissue and hygiene care products, hair care products, and the emerging “metaverse e-commerce” space.

MENA Region Poised to Follow UAE’s E-commerce Growth Trajectory

Industry experts predict that the Middle East and North Africa (MENA) region will mirror the UAE’s e-commerce growth trajectory. This is driven by the adoption of cutting-edge technologies and evolving consumer preferences across the region.

A report by EZDubai, in collaboration with Euromonitor and 1115 Inc., projects the MENA e-commerce market to reach $57 billion by 2026. This growth is further fueled by significant investments in the sector, including acquisitions and collaborations with international businesses.

The YallaHub research underscores the immense potential of the UAE’s e-commerce market, particularly with brands adapting to changing consumer preferences and embracing innovative solutions like quick commerce.

“Platforms like ours, with cutting-edge technology and regional expertise, are well-positioned to capitalize on this opportunity,” said Leo Dovbenko, CEO of YallaHub. “We empower brands to navigate the exciting and ever-evolving e-commerce landscape.”


Publish 6 Mar 2024


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