UAE Experiences 140% Increase in Monthly Online Shoppers Over the Past 48 Months

Maryam Pervez -

Consumers in the UAE have increasingly embraced online shopping, with a 140% rise in monthly e-commerce shoppers since 2020, according to a recent study.

The report, released by Checkout.com during the Seamless Middle East 2024 exhibition in Dubai, reveals that 49% of UAE consumers plan to increase their online shopping in the coming year. The report, titled "The State of Digital Commerce in Mena 2024: A Tale of Rapid, Sustained Growth," highlights the dynamic growth of the region’s digital commerce landscape, emphasizing the shift towards digital payments and the importance of digital platforms in meeting consumer needs. As the MENA digital economy strengthens, the report provides insights into consumer behavior, preferred transaction platforms, and opportunities for merchants to enhance their digital payment performance. Checkout.com’s report, based on four years of data, captures significant trends and changes in the digital commerce sector over the past 48 months.

The State of the Digital Economy

This year’s report highlights the resilience and growth potential of the digital economy in the UAE, with nearly half of consumers (49%) planning to increase their online spending in the next 12 months. The study also notes a 23% rise in weekly online shoppers and a 10% increase in daily online shoppers among UAE residents, reflecting a significant and lasting shift in consumer behavior and trust in online platforms. The UAE's adoption of digital commerce is accelerating, driven by a strong preference for online shopping.

Regionally, the report reveals a nearly seven-fold (658%) increase in digital payment transactions in the Middle East and North Africa (MENA) since 2020. Half of MENA consumers anticipate increasing their online spending over the next year. Remo Giovanni Abbondandolo, General Manager for MENA at Checkout.com, observes that the UAE is experiencing a transformative era in digital commerce, marked by a shift towards digital payment methods and a focus on payment security, fostering consumer trust. The UAE's advanced infrastructure, platforms, and policies are contributing to the impressive growth in digital commerce and the widespread adoption of digital payment tools by merchants across various industries.

Payment Security is the Key Loyalty Driver

The report highlights a significant shift in the UAE towards convenient and secure digital payment options, driven by consumers' increasing preference for payment security. Key findings include:

  • Consumer Spending Habits: The most popular online purchase categories are clothing/fashion (56%), electronics and food/prepared meals (both 53%), and groceries (46%).
  • Importance of Payment Security: 36% of consumers rank payment security as their top concern when shopping online, aligning with the 35% of UAE consumers who have experienced online payment fraud.
  • Impact of Payment Performance: 29% of UAE shoppers would switch to a competitor after a single failed payment, highlighting the need for optimized payment systems.
  • Balancing Usability and Security: Abbondandolo emphasizes the importance of balancing ease of use with robust security to foster trust, retain customers, and enhance overall payment performance.

The report underscores that while ease of use is important, security is the foundation of consumer trust in digital payments. Prioritizing both can lead to a healthier relationship between merchants and customers, boosting loyalty and satisfaction.

The Unmistakable Demise of Cash

The report highlights a significant shift from cash on delivery (COD) to digital payment methods in the UAE, with a 37% decrease in preference for COD over the past 48 months. This trend reflects growing trust and acceptance of digital payments, with 74% of UAE consumers preferring card payments if COD were unavailable. The report also notes the rapid adoption of digital wallets like Apple Pay and Google Pay, which have seen significant growth from 2020 to 2023, indicating more diverse payment preferences.

"As confidence in digital payment methods grows, the decline in preference for COD is unsurprising. This shift presents businesses with an opportunity to reduce costs. Advanced payment solutions offer a more scalable and consumer-friendly experience, reducing the complexity and expense of legacy operations,"

said Abbondandolo.

Diverse Spending and Payment Preferences

This year’s report reveals significant growth in digital commerce across various retail sectors, expanding beyond essential items like food, groceries, and clothing. There has been a noticeable increase in online purchases of household items, electronics, furniture, event tickets, travel services, and beauty and luxury products. This trend indicates that digital commerce, fintech, wallets, and remittances are becoming integral to everyday life, covering a wide range of goods and services.

News Source: Khaleej Times