UAE – Mubasher: Card payments represented 40.80% of online purchases across the UAE in 2023, according to a survey by GlobalData.

The UAE’s e-commerce market witnessed an 18.50% surge to AED 92.40 billion ($25.20 billion) in 2022. It is expected to increase by 16.40% to AED 107.60 billion ($29.30 billion) in 2023.

Ravi Sharma, Lead Banking and Payments Analyst at GlobalData, noted: “E-commerce in the UAE has registered healthy growth in the past five years, mainly due to rising internet and smartphone penetration coupled with increasing consumer confidence in online transactions.”

“The pandemic accelerated the shift in consumer preference from brick-and-mortar to online channels. Online shopping events such as Black Friday and Cyber Monday have also supported the growth of e-commerce,” Sharma elaborated.

Meanwhile, the UAE government is taking initiatives to boost e-commerce market growth in the country.

In this regard, a free zone for e-commerce companies by the Dubai Free Zones Council (DFZC) encourages widening foreign direct investment (FDI) in the sector in Dubai.

The GlobalDat reported that 88% of UAE consumers carried out online transactions over the past six months, while only 5% never shopped online.

Alternative payment tools rank second, collectively equivalent to 27.70% share of e-commerce transaction value in 2023, higher than 24.40% a year earlier.

Furthermore, bank transfers are widely used and account for 19.20% of total e-commerce payments value in 2023.

In spite of the rise in electronic payments, around 12.40% of e-commerce purchases are still paid in cash.

Sharma highlighted: “The UAE will continue to witness strong growth in e-commerce sales, registering a compound annual growth rate (CAGR) of 12% between 2023 and 2027 to reach AED 169.50 billion ($46.20 billion) in 2027.”

“Among payment tools, while alternative payments are gradually displacing traditional modes of payments, there is still a long way to go before they can disrupt the dominance of payment cards,” he concluded.