United arab emirates Country Commercial Guide
Learn about the market conditions, opportunities, regulations, and business conditions in united arab emirates, prepared by at U.S. Embassies worldwide by Commerce Department, State Department and other U.S. agencies’ professionals
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eCommerce
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The UAE is the eCommerce leader among Gulf Cooperation Council (GCC) states, where the market jumped by 53% in 2020 with a record of $3.9 billion in eCommerce sales, which constituted 10% of total retail sales. That, in large part, was driven by a COVID digital shift. The Dubai Chamber of Commerce and Industry forecasts eCommerce to generate $8 billion in sales by 2025 as the UAE market has almost 100% of the population with internet and mobile phone access.

In 2017, Amazon.com acquired Souq.com, the largest domestic online merchant, giving the global operator a large share of sales in the UAE. Traditional store-based retailers are rising to the eCommerce challenge by improving the online shopping experience for customers. The product categories that produce the most revenue in online sales in the region are consumer electronics and appliances, media products, computers, fashion accessories, women’s apparel, cosmetics, and perfumes. The most important factors for online shoppers in the UAE were price, customer service, and ease of use. 

Other major in-country purchases include travel related expenses for cabs, airline tickets, and hotels. Mohamed Alabbar, Chair of Emaar, launched Noon.com in 2017 as a regional competitor to Amazon. Noon struggled to stay in business but as of 2023 is profitable. Traditional brick-and-mortar retailers often provide customers with an additional online retail platform to augment their revenues. For instance, Carrefour and Lulu Group, two of the largest retailers in the Middle East, launched online shopping portals in the UAE.

Though much of the dramatic growth in eCommerce was a reaction to COVID-19, consumers report an increased trust purchasing products online, along with the UAE having the highest smartphone penetration rate in the MENA region. E-government services are migrating to online platforms as well, where they are integrated with online payment platforms to provide residents faster and more effective public services. This includes services such as utility billing, traffic services, licensing, visa issuance, etc. That too has made consumers more comfortable with online transactions. The Dubai Free Zones Council (DFZC) announced new eCommerce regulations for free zones that will enable greater foreign direct investment (FDI) in the eCommerce sector in Dubai. DFZC’s initiative will primarily focus on encouraging the adoption of eCommerce in cooperation with Dubai authorities.

Retailers realize that language and localization are extremely important factors to be considered when entering the UAE eCommerce market. Luxury brands have launched Arabic language sites to attract local customers who have avoided e-shopping due to language barriers. Many online shoppers in the Middle East now use cross-border eCommerce shopping. Online shoppers in the UAE made 58% of their online purchases from overseas vendors due to trust in gateway security, along with reliable and free shipping methods. Products and brand reviews on social media platforms influence e-shopping behavior. ECommerce players can leverage social media to increase sales much in the same way as other foreign markets.

Although eCommerce in the Middle East is potentially highly lucrative, in part because of the region’s young and tech-savvy population, there are barriers that remain in the UAE’s eCommerce market. These include the prevalence of cash on delivery over other electronic payment methods; consumer wariness of the safety of eCommerce system; security concerns; inadequate logistics; a lack of a unified address system which creates challenges for last-mile delivery; and the inability to touch and test products before purchasing them

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Global Business Navigator Chatbot Beta

Welcome to the Global Business Navigator, an artificial intelligence (AI) Chatbot from the International Trade Administration (ITA). This tool, currently in beta version testing, is designed to provide general information on the exporting process and the resources available to assist new and experienced U.S. exporters. The Chatbot, developed using Microsoft’s Azure AI services, is trained on ITA’s export-related content and aims to quickly get users the information they need. The Chatbot is intended to make the benefits of exporting more accessible by understanding non-expert language, idiomatic expressions, and foreign languages.

Limitations

As a beta product, the Chatbot is currently being tested and its responses may occasionally produce inaccurate or incomplete information. The Chatbot is trained to decline out of scope or inappropriate requests. The Chatbot’s knowledge is limited to the public information on the Export Solutions web pages of Trade.gov, which covers a wide range of topics on exporting. While it cannot provide responses specific to a company’s product or a specific foreign market, its reference pages will guide you to other relevant government resources and market research. Always double-check the Chatbot’s responses using the provided references or by visiting the Export Solutions web pages on Trade.gov. Do not use its responses as legal or professional advice. Inaccurate advice from the Chatbot would not be a defense to violating any export rules or regulations.

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The Chatbot does not collect information about users and does not use the contents of users’ chat history to learn new information. All feedback is anonymous. Please do not enter personally identifiable information (PII), sensitive, or proprietary information into the Chatbot. Your conversations will not be connected to other interactions or accounts with ITA. Conversations with the Chatbot may be reviewed to help ITA improve the tool and address harmful, illegal, or otherwise inappropriate questions.

Translation

The Chatbot supports a wide range of languages. Because the Chatbot is trained in English and responses are translated, you should verify the translation. For example, the Chatbot may have difficulty with acronyms, abbreviations, and nuances in a language other than English.

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