Home quarantine as a result of the outbreak of the coronavirus has confined majority of individuals to their homes. In light of the measures imposed by countries globally to counter the spread of the “COVID-19” epidemic individuals are increasingly resorting to online shopping for their basic needs. This has hence widened the scope of the e-commerce sector giving them the opportunity to grow and expand their reach.
Mauro Romano, Co-founder and CEO of ArabClicks, said, “Several factors play an important role in the prosperity of this electronic commerce sector, including the infrastructure in the field of technology, the quality of internet connection and the rate of internet penetration in society. These are factors governing the Gulf in general, particularly United Arab Emirates, in which this sector is expected to achieve a constant growth rate of 23% on an annual basis until 2022.”
Romano added that the above numbers were derived from the end of last year but could change considering the impact of the outbreak on consumer habits. This is because a large segment from individuals to companies are currently buying online, due to the lack of options or the absence of other options.
In 2019 the value of e-commerce in the UAE alone totaled AED59 billion (about $16 billion), , due to the ease in online shopping, the diversity of services and channels, government support for non-cash transactions and the adoption of the state Electronic procedures for official transactions, providing multiple online payment options and site censorship.
The Middle East and North Africa region is witnessing a noticeable digital transformation, the Kingdom of Saudi Arabia and United Arab Emirates in particular, as digitization efforts are accelerated as part of their economic development programs. The youth are major contributors of this transformation due to their constant use of latest technologies providing them an easier, fast and more effective shopping experiences.
The retail sector in the Gulf will jump to about $308 billion by 2023, according to the latest data, up from $253 billion achieved in 2018. It is expected that Saudi Arabia and the UAE will account for 77% of the increase, making UAE rank fifth among the 10 most prosperous countries in the retail sector worldwide, Romano added.
He stated that the e-commerce sector will greatly benefit from this growth, especially in the current situation and in the coming months, as preliminary government data for the first quarter of 2020 showed a significant increase in online shopping by residents of the United Arab Emirates.
During the first few months of this year, continuous growth was recorded in the UAE e-commerce market, exceeding 5% of sales. This preliminary data documented a group of consumer behaviors after using smart applications, which now cover more than 60% of government and banking transactions.
Romano added that this rise in electronic shopping during the past two months, were suggestive of the fact that these services help reduce time and effort. It also effectively helped reduce crowds in shopping centers. The article further suggests that the sector will witness qualitative leaps in the next few months, providing multiple opportunities for growth, especially considering the presence of internet, technologies, innovation and the change in lifestyle imposed by the pandemic.