UAE leads Mena's $1.8 billion e-commerce boom
The e-commerce landscape in the Middle East is undergoing a remarkable transformation with the region recording a 30 per cent surge in online orders.
The UAE and Saudi Arabia have emerged as frontrunners in this booming market, contributing significantly to the gross merchandise value (GMV) of online sales.
A recent study from Flowwow, a UAE-based gifting marketplace, and Admitad, a partner marketing platform, highlights that the UAE experienced a 7.0 per cent increase in online orders, while Saudi Arabia saw a 9.0 per cent rise. This growth underscores their dominance in the region's e-commerce sector, which is currently valued at $1.8 billion
The study, which analysed more than 6.8 million online orders across Mena, including Turkey and Pakistan, identifies Saudi Arabia, the UAE, and Kuwait as top contributors to the region's online sales, driven by robust consumer spending and digital expansion. Turkey and Egypt follow closely in the GMV rankings, bolstered by their large populations and increasing Internet penetration. Other countries such as Morocco, Pakistan, Qatar, Algeria, and Bahrain are also witnessing growth, particularly in mobile commerce.
The UAE's e-commerce sector is thriving, with an impressive increase in average order values (AOV). The AOV in the region grew from $30 in 2023 to $35.6 in 2024. Notably, the UAE's AOV jumped from $89 to $102, while Saudi Arabia's rose from $49.6 to $52.5. These statistics indicate a growing trend of consumers opting for higher-value purchases.
The study also highlights the top product categories driving order growth in 2024. Online gaming took the lead with a remarkable 32 per cent increase in orders, followed by B2B services at 25 per cent and fashion at 23 per cent. In the UAE, the demand for B2B online services surged by 32 per cent, with online gaming also showing a strong growth of 30 per cent. Other notable categories include electronics (+19 per cent), home goods (+18 per cent), and car products (+16 per cent).
'The rapid development of e-commerce and gifting markets, coupled with support for local SMEs, is driving economic growth and creating new opportunities in the region,' said Slava Bogdan, CEO of Flowwow. 'The record-breaking results of 2024 set the stage for exponential growth ahead, with expectations of a fourfold increase in the coming years.'
Factors contributing to this growth include government initiatives aimed at digital transformation in both the UAE and the broader Mena region. Programmes such as the UAE's Digital Economy Strategy and Saudi Arabia's Vision 2030 are pivotal in fostering a more efficient online ecosystem, ultimately benefiting both businesses and consumers.
As Mena e-commerce evolves, there is a noticeable shift towards AI-driven personalisation and community-oriented strategies. Platforms like TikTok and Pinterest are emerging as key shopping hubs for Generation Z, reflecting a changing consumer landscape. However, while AI streamlines operations, the importance of human-centric customer service remains crucial for building trust and loyalty.
The gifting sector in the UAE is witnessing unprecedented growth, with recent research indicating a projected CAGR of 14.7 per cent from 2024 to 2030. The influx of over 200 nationalities and a strong culture of gift-giving during occasions such as weddings and birthdays is driving this trend. Flowwow's data reveals that the Mena gifting market is expected to reach $6.38 billion by 2030, with the UAE attracting more than 13,000 customers in 2024, resulting in a staggering 20,782 gift orders annually.
The UAE market has seen remarkable revenue growth of 212.6 per cent, with the number of gift purchases increasing by 198.21 per cent and the number of buyers growing by 160.03 per cent compared to 2023.
Dubai leads the sales with over 11,000 customers annually and the highest average order value at Dh352, followed by Ras Al Khaimah (Dh295), Abu Dhabi (Dh229), Ajman (Dh188), and Sharjah (Dh175). The average order value in the UAE increased by 4.92 per cent, reaching Dh254.69.
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