LAUNCHES THIRD E-COMMERCE REPORT HIGHLIGHTING DOUBLE-DIGIT GROWTH OF MENA E-COMMERCE MARKET

The third edition of EZDubai’s “E-commerce Report in the MENA region” was released in collaboration with Euromonitor International, the top global business intelligence provider, market analysis, and consumer insights. EZDubai is a fully dedicated e-commerce zone in Dubai South. The report revealed that the MENA region’s total e-commerce market reached US$37 billion in 2022, with a doubledigit growth rate from 2021 and a 32% CAGR over 2018 - 2022.

The MENA’s double-digit growth is due to robust internet usage, a well-developed infrastructure, and supportive policies. Several trends also contributed, including the increasing popularity of digital payment platforms, the rise of online grocery shopping, and expanding tech initiatives. Furthermore, economic stability, technology investment, and a young, tech-savvy population which has fueled the strong development of the digital landscape in the MENA region, as highlighted in the report.

The UAE, KSA, and Israel accounted for 72.1% of the total market size, with the growth in these countries attributed to factors including their technologically advanced populations, high-internet usage rates, and strong government finances. Specifically, Israel’s innovative economy and the rising demand for speedy delivery services propelled it to the forefront of the market. The report also notes that companies in the UAE use dark stores to streamline inventory management and provide delivery. Meanwhile, the KSA’s rapidly growing population, technological advancements, and development of secure payment systems contributed to its strong performance in the e-commerce sector.

The MENA e-commerce market is expected to reach US$57 billion in 2026, with a CAGR of 11% over 20222026. Although countries like the UAE, KSA and Israel are expected to remain leaders in e-commerce market share, countries like Algeria are expected to see strong growth.

In his comments, Mohsen Ahmad, CEO of Dubai South Logistics District, said, “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. 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. At EZDubai, we recognise the strategic importance of e-commerce to the region’s economic development. We are committed to further working closely with the government sector and local and international businesses to support this dynamic industry’s growth and success.”

Engy Naguib, Senior Engagement Manager, Public Sector MENA region at Euromonitor International, added, “The demand for online shopping services in the MENA region is expected to continue growing. In particular, consumer electronics are expected to have a penetration rate of 29% for KSA and 50% in Egypt within total ecommerce by 2026. Meanwhile, the food and drink industry in the UAE is projected to experience strong growth, with penetration rates reaching 13% by 2026. Additionally, the KSA’s average order size is expected to increase by 50% in 2026. To sustain growth, E-commerce players should prioritise personalisation of the online experience, adopt an omnichannel approach, and improve last-mile delivery services.”

EZDubai was designed to attract leading e-commerce companies and create a benchmark with its infrastructure. The e-commerce zone, launched in January 2019 by HH Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, aims to promote the emirate’s position as a hub for regional e-commerce.

The Dubai Economic Agenda (D33), which aims to place Dubai among the top three global cities and double its economy in the following ten years, was discussed at the meeting of the Dubai Free Zones Council (DFZC), presided over by His Highness Sheikh Ahmed bin Saeed Al Maktoum, Chairman of the Council.

The Council confirmed its commitment to attaining the aims of D33 through many initiatives and addressed its plan of action in light of the UAE’s preparations to host the Conference of the Parties to the UN Framework Convention on Climate Change (COP 28) at the Dubai Expo City. This was done by detailing its packages that streamline services and improve the experience of international investors. The Council also emphasised the significance of working with the Emirati Human Resources Development Council in Dubai to encourage Emirati talent to work in free zone enterprises in Dubai and several other issues about the economic sectors in the free zones.

Free Zones Energy Demand Management Strategy 2030

The Council discussed the results of the Free Zones Energy Demand Management Strategy, which aims to lower the demand for electricity and energy consumption by free zone businesses to achieve sustainability and help realise the vision of Dubai’s wise leadership to solidify its position as a global leader and create creative and environmentally friendly communities. In combination with the Year of Sustainability and preparations for hosting COP 28, this plan opens the path for advancing the goals of the UAE Net Zero strategic initiative, which aims to achieve climate neutrality by 2050.

The strategy aims to reduce demand for energy and water by 30% by 2030 for free zones and companies, in addition to providing added value to businesses. The strategy also describes how to collaborate with the relevant government organisations to lessen the carbon impact of free zones while introducing innovation, awareness technology, and procedures linked to energy demand reduction and sustainability.

Unified Service Packages

The Council also explored a proposal to unify the title and classifications of services at Dubai free zones. This adheres to the Dubai Model’s philosophy, which provides packages that streamline benefits, improve service channels in free zones, satisfy client needs and expectations, and boost customer happiness.

Attracting Emirati Talents

The Council reviewed the efforts and successes accomplished over the previous period to explore the significance of luring Emirati talent to work in free zone enterprises in Dubai. It was also reaffirmed how important it is to maintain collaboration with free zone authorities to encourage their businesses to hire UAE citizens and use government capabilities and incentives like the Nafis programme. In order to achieve the best results and develop a new generation of Emirati talents in various industries within Dubai Free Zones, the Council emphasised the necessity of supporting these initiatives and collaborating with work teams and the Emirati Human Resources Development Council in Dubai.