Growing use of online channels has caused a surge in the Middle East and North Africa’s e-commerce market which touched about $37 billion in 2022 showing a 16% hike from the $31.7 billion seen the previous year. Projections from the e-commerce zone, in collaboration with Euromonitor International, anticipate that figure reaching $57 billion by 2026 at a compound annual growth rate of 11 per cent. The rising use of the internet, the growing consumption visa digital payment platforms and increased online shopping is driving this growth. This is aided by the MENA countries commitment to solid infrastructure and stable policies which contribute to economic stability. Investments in the tech sector are geared towards a tech-savvy market and this has in turn enabled the digital landscape of the region. Saudi Arabia and the UAE, the biggest economies in the Arab World, and Israel, impressively, make up more than 72% of the e-commerce market. “The Mena region’s e-commerce industry has experienced rapid growth in recent years, driven by a combination of factors, such as increasing internet and mobile penetration, rising consumer demand for convenience and value, and the emergence of innovative business models,” said Mohsen Ahmad, chief executive of Dubai South Logistics District, where the EZDubai is based. “It is worth noting that government initiatives have also played a vital role in supporting this growth, with several regional governments implementing policies to support digital transformation and encourage entrepreneurship and investing in the necessary infrastructure and technology to facilitate e-commerce operations.”
E-commerce is a driving force in most economies today and in the MENA region, this is quickly starting to keep pace with global giants like China, with many online retailers scaling up services to avoid a break in future supply chain that may result due to macroeconomic and geopolitical issues, such as Covid 19.
The UAE’s e-commerce market worth is expected to reach $9.2 billion by 2026. That is over a 90% increase from 2021, according to the Dubai Chamber of Commerce, which made these projections last October. This seems to be evidenced in market activity as Amazon opened a new centre in the Dubai South recently and is in the process of constructing the Middle East’s most technologically advanced warehouse in Abu Dhabi. The digital retail giant also launched an academy in Saudi Arabia that is geared to supporting the the human capital programme for digital economy.
An EZDubai study found that Israel continues its upwards trajectory in this space with a rising demand for e-commerce delivery services. E-commerce revenues in Israel are likely to reach $7.5 billion in 2023, according to data from eCommerceDB, the intelligence platform. They also said that the UAE and Saudi Arabia are projected to touch $11.78 and $11.98 billion this year. “The demand for online shopping services in the Mena region is expected to continue growing,” Engy Naguib, senior engagement manager for Mena at Euromonitor International, stated in this report. “To sustain growth, e-commerce players should prioritise the personalisation of the online experience, adopt an omnichannel approach and improve last-mile delivery services.”