According to the latest report by YallaHub, the UAE's e-commerce market is expected to reach a record high of $17 billion by 2025. This growth is primarily driven by the increased use of the internet, the widespread popularity of smartphones, and enhancements in online shopping experiences. Leo Dovbenko, CEO of YallaHub, stated that by 2024, the UAE's e-commerce market is projected to hit $9 billion in revenue with a market penetration rate of 66.1%. The Compound Annual Growth Rate (CAGR) from 2024 to 2028 is anticipated to be 6.54%.
The report highlights that the quick commerce sector is a major driver of growth in the UAE's e-commerce market, with sales expected to reach $162 million in 2024. The adoption of "buy now, pay later" payment methods is rapidly increasing in the UAE, and it is expected that nearly 90% of sellers will offer this option by 2024. As online shopping becomes more prevalent, the UAE's metaverse e-commerce industry is also expected to expand significantly, with a projected growth of 37% from 2024 to 2030.
In 2023, toys, DIY products, and interest-related products topped the sales charts in the UAE's e-commerce market, accounting for 29% of total sales, followed by fashion items at 27%. Electronics made up 18% of the market share, while food and personal care products accounted for 13%, and furniture and home appliances comprised 12%. Notably, there was a significant increase in demand for online home and laundry care products in 2023, with consumers showing a strong preference for purchasing these items on e-commerce platforms. The online market for paper towels and sanitary care products is also growing rapidly and is expected to reach $19.41 million by the end of 2024, with a CAGR of 11.41% from 2024 to 2028. The user base for this segment is projected to grow to 1.6 million by the end of 2028. The hair care products market is also experiencing considerable growth, with revenues expected to reach $50.47 million by the end of 2024. The study further indicates that with the expansion of the metaverse e-commerce sector, a 37% growth is expected from 2024 to 2030.
The UAE's e-commerce market is undergoing rapid growth, transforming this desert oasis into an economic hub that attracts numerous local and international e-commerce platforms. Amazon.ae (formerly Souq), as a global giant, plays a pivotal role in this landscape. Local platforms like Noon and Namshi stand out with their unique local flavors and trendy product lines. Jumbo Electronics also holds a strong position in the electronics sector. Additionally, traditional brick-and-mortar retailers like Carrefour and Lulu Group are swiftly transitioning to online retail. UAE consumers are keen on cross-border shopping, with Chinese platforms like AliExpress and JD.com being popular for their price advantages and wide range of products. While local platforms are competitively strong, the entry of international giants has intensified market competition. As the UAE deepens its digital transformation, the future market is expected to become more diverse, providing more opportunities for various e-commerce platforms and independent sellers.