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Abu Dhabi, UAESunday 21 April 2019

UAE among global leaders for online shopping readiness, UN index shows

Emirates in top five developing nations for its e-commerce preparedness

The purchase of the local online retailer Souq.com by Amazon in May 2017 helped the UAE's ranking. Pawan Singh / The National
The purchase of the local online retailer Souq.com by Amazon in May 2017 helped the UAE's ranking. Pawan Singh / The National

The UAE is the fourth most prepared developing economy for online commerce, according to a new index from the United Nations Conference on Trade and Development (Unctad).

Unctad’s 2019 Business-to-Consumer (B2C) E-Commerce Index, which measures an economy’s preparedness to support online shopping, found the Emirates fared highly in terms of internet usage and number of accounts “with room to improve for secure servers and postal reliability”.

“One sign is the purchase of the UAE online retailer Souq.com by Amazon in May 2017 for $583 million,” the report said. “Another is the $735m Dubai CommerCity, the first dedicated e-commerce park in the Middle East and North Africa.”

The ranking of 151 economies is calculated from the average of four indicators: account ownership at a financial institution or with a mobile-money-service provider; individuals using the internet; postal reliability; and secure internet users.

According to a report by Fitch Solutions Macro Research, a unit of Fitch Group, the Middle East’s e-commerce sector is growing at the fastest pace globally with online sales expected to double to $48.8 billion by 2021. The UAE is set to be one of the world leaders, with e-commerce spending in the country increasing 170 per cent to $27.1bn in 2022, from $9.7bn in 2017.

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According to Unctad’s index, Singapore is the top ranked developing economy for e-commerce readiness followed by Hong Kong and South Korea.

However the UAE was tied top for the highest proportion of individuals using the internet, at 95 per cent of the population.

“All but one of the top 10 developing countries are from the East or West Asian regions and all are upper middle-income or high-income economies,” the report said.

Saudi Arabia took the 10th sport on the list of the top 10 developing economies, as it has the largest B2C e-commerce market in the Arabian Gulf region according to Unctad.

“In a 2017 report, the Government makes note of the index and how the country can improve its ranking: ‘Saudi Arabia could move higher up in the ranking through boosting banking and credit card penetration and optimising the number of secure internet servers per 1 million people,'" the Unctad report said.

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In the global index of all nations, eight of the top 10 countries for online shopping are in Europe with the Netherlands taking the top spot, followed by Singapore in second and Switzerland in third. The UAE’s global ranking came in at 33.

“The Netherlands has high values for most indicators, particularly in secure servers – a proxy for e-commerce shops – where it is top-ranked among all 151 countries included in the index,” said Shamika Sirimanne, director of Unctad’s division on technology and logistics. “The country also has the second-highest proportion of online shoppers in the world [with] 76 per cent of the population aged 15 and older.”

A June poll from global payments company Visa found that more than two thirds of UAE shoppers are now comfortable making purchases and paying bills online, with card payments the top method for online purchases.

Updated: December 10, 2018 12:38 PM

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