Why is it the Right Time To Start Your E-Commerce Business in the UAE?

The UAE is the fastest growing nation in the e-commerce sector. With an online retail booming, the UAE has the most advanced e-commerce market in the whole MENA region. The UAE's e-commerce market is valued at a staggering AED 104 Billion today, projecting average annual growth of 23 percent. Several factors have contributed to positioning the UAE as the global e-commerce hub. Here are the top reasons why there's never been a better time to start an e-commerce business in the UAE.

  1. 1. Increasing Online Shopping Trends in the UAE:

    • Many people in the UAE are moving away from traditional shopping modes to online shopping, thereby signifying the viability of e-commerce businesses in the country.
    • Online shopping now plays a huge role in consumers' everyday lives. Research indicates that online shopping has grown by 1500% in the Middle East over the last decade.
    • Today's soaring number of online shoppers has led to the upsurge of e-commerce businesses that can promptly capitalize on this trend.
  2. 2. Covid-19 Pandemic Impact on E-Commerce:

    • Due to various lockdown restrictions across the UAE and closure of shops and shopping malls, people are increasingly turning to online shopping from the comfort and safety of their homes.
    • As most people are currently working from homes, they have more time to shop online.
    • There is a significant surge in online grocery orders with at least 10-15 times an increase in the usual traffic. So, there has never been a better opportunity for e-commerce businesses to tap a highly-engaged online audience.
  3. 3. Rise of the Tech-Savvy Consumers:

    • Tech-savvy consumers are increasingly shopping online for either personal consumption or their businesses. Experts estimate that by 2040, 95% of purchases will be online.
    • There is a growing awareness, and consumers are learning to make the right purchase decision through a series of online experiences. They do online research, learn and educate themselves, share information online, validate their friend's choice, and then make a decision.
    • The increasing proportion of tech-savvy consumers is a significant source of growth for e-commerce businesses.
  4. 4. Deep Preference for Local UAE Websites:

    • An astonishing number of people in the region prefer shopping online from local UAE-based websites more than foreign-based platforms. This preference indicates immense growth potential for local UAE websites that face stiff competition from global e-commerce giants like Amazon and Alibaba.
  5. 5. Rise of Online Retail/E-Commerce Businesses:

    • There are more than 100 best shopping websites and apps existing in the UAE today. For example, e-commerce platforms Dubizzle (nicknamed "Amazon of the Middle East") and SOUQ, founded in 2005, are now worth more than USD 1 Billion each.
    • With such positive growth prospects, the e-commerce market opens the doors of opportunity to countless new entrepreneurs to launch their e-commerce start-ups.
  6. 6. Supportive Role of the UAE Government:

    • Cashless Payment: The UAE government plays a vital role in reinforcing online transactions between businesses and consumers by expanding cashless payment options for various types of purchases and government services in the country.
    • Online Services: The UAE government has made significant efforts to establish itself as an e-commerce hub by providing the basic online services at par with some of the top European Union states.
    • Investor-Friendly Government Policies: The UAE government offers multiple benefits to foreign investors to operate a free zone company, including 0% personal income or corporate tax, 100% business ownership, 100% repatriation of business profits, and negligible custom duties.
  7. 7. Growth of Social Media:

    • The growth of social media has further fuelled the growing trend of online purchases.
    • SMEs and start-ups are increasingly championing the social media platforms, using it for online sales, marketing, and customer engagement.
  8. 8. Growing Internet Penetration & Presence of PayPal:

    • Statistics indicate that internet penetration in the UAE is one of the highest in the world.
    • With the growth of broadband/high-speed internet connectivity in the region and improvements in the security of transactions, payment execution, and technology speed, the online space is likely to continue to flourish.
    • The presence of PayPal and other online payment platforms in the GCC has grown substantially with an increase in the value of e-commerce transactions.
  9. 9. Availability of World-Class Infrastructure & Logistics:

    • Typically, infrastructure and logistic facilities in the UAE are one of the best in the world. Everything is unmatched from world-class amenities to affordable office space options, round-the-clock security, and business support utilities.
  10. 10. Hassle-Free Licensing Procedure:

    • The licensing procedure for business setup in the UAE is swift and easy.
    • Business owners can choose a suitable legal entity to start their online business either in a free or non-free zone.

With all the positive factors leading to the growth of the UAE's e-commerce economy, it's high time to start your e-commerce business now more than ever!

Starting a new e-commerce business in Sharjah Media City (Shams) free zone is quick, easy, and hassle-free. If you are looking to set up your company in Shams, call Shams free zone authorities on 800 (Shams) 74267 or visit www.shams.ae.


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