UAE mobile spend to reach Dh20bn by 2019, says report

Online marketplaces are driving the country’s e-commerce growth

ABU DHABI , UNITED ARAB EMIRATES , DEC 13  – 2017 :- One of the person using Amazon website on her mobile for online shopping in Abu Dhabi .  (Pawan Singh / The National) Story by LeAnne Graves
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UAE residents are increasingly opting to shop on their smartphones with mobile spending set to grow 26 per cent between 2018 and 2019, reaching Dh20 billion, according to a survey.

The momentum in mobile spending is expected to continue till 2020 with a further 25 per cent growth, according to the findings of a report compiled jointly by PayPal and Ipsos.

“With some of the highest levels of smartphone penetration globally, it is unsurprising that the smartphone is the device of choice for online shopping in the UAE,” said Efi Dahan, general manager for Eastern Europe, the Middle East and Africa, at PayPal.

"We see m-commerce [mobile phone shopping] as the driving force in online transactions as people increasingly want to make a transaction, wherever and whenever they choose, through their mobile device," he said.

With many young and affluent ­customers, deep internet penetration and advanced logistics network, the Middle East's e-commerce sector is growing faster than anywhere else in the world. As of March this year, internet penetration in the region was 64.5 per cent, higher than the global average of 54.5 per cent, according to Statista.

Mergers and acquisitions in the sector have also picked up pace in the past year after Amazon acquired Souq.com for $650 million in 2017.

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The joint report, which was released on Wednesday, predicts overall online spending will continue to grow in the UAE to reach Dh36bn by the end of 2018. Almost half of the adults surveyed (49 per cent) said they will spend more online in the next year.

Another 37 per cent indicated they intend to increase or start shopping on marketplace websites. An online marketplace is an e-retail website where products are offered by various third parties, while transactions are processed by the website operator.

“The UAE’s commerce revolution is well under way and, backed by the country’s diverse and truly global population plus improving logistics services, consumers are increasingly looking internationally to source their favourite products and services,” said Mr Dahan.

In the survey, the US was cited as the most popular cross-border online shopping destination for UAE shoppers, followed by India and China.