In the latest news, Dubai and the UAE were ranked first in the list of most rapidly expanding e-commerce industries in the Middle East and North Africa region. As a result of the UAE's advancement initiatives, including the Dubai Smart City, the UAE and Dubai are at the forefront of e-commerce growth in the MENA region due to their demand for technology and a supportive environment that promotes start-ups.
It is quite easy now for consumers to find a wide range of consumer products and services with a few clicks, taps of the finger, or swipes of a card in the globalized economy of today.
According to a report jointly published by the Dubai Economic Department and the global payment technology company Visa, the UAE has emerged as the e-commerce sector with the fastest growth rate in the Middle East and North Africa (MENA) region. Forbes ranked it as the highest-ranking company on its list of 'World's Best Regarded Companies.
It is fair to say that the 'emPay' digital wallet launched by Dubai Economic and the Dubai Commerce initiative has been lauded as a very good initiative to promote e-commerce and provide more convenient access to digital transaction channels.
As the UAE moves towards the end of the century, digitalization will dictate the future of business. Consumer penetration of mobile phones has now reached a world record high of two hundred and nine percent, according to estimates. UAE residents are among the top 10 worldwide in terms of internet and social media use, spending an average of approximately eight hours per day on the internet and social media. Cell phone penetration, which has been a reality in the UAE for years, is the benchmark for mobile wallet adoption. With global giants such as Samsung Pay, Google Pay, and Apple Pay joining the fray, along with local players such as Beam Wallet and Etisalat Wallet, the use of mobile wallets in the UAE has risen. Paying bills anywhere, whether at a gas station, the cinema, or a department store, is possible with only a mobile phone.
The UAE's logistics support is excellent in the e-commerce sector. It's also worth noting that logistics is a game-changer for any company involved in e-commerce. Due to the UAE's location as a central delivery center and the low cost of logistics as well as its state-of-the-art infrastructure, it is a perfect place for e-commerce to flourish. Visa survey points out that it enjoys a distinct advantage as a major global trans-shipment hub, with the port of Dubai International Airport (the sixth busiest cargo airport in the world) and Jebel Ali offering a high level of logistics services.
Government policies that are pro-business have been critical for tackling the barriers to a cashless society in the UAE and developing a digital culture there. Digital commerce and cashless payments were listed as top government priorities in the UAE Vision 2021. Authorities have also taken several measures to promote it, such as the wage security scheme.
As a result of the recent Visa-DED trend survey involving customer perceptions of digital payments and online shopping, 68 percent of people say they are trusting of online shopping, and more than 70 percent of people say they are trusting of online payments. Customers, retailers, and financial institutions all have an opportunity to benefit from this trend. We should therefore continue to develop the trust of consumers and strengthen the online payment system so that consumers can benefit from a seamless, more satisfying, and safer shopping experience.
Another critical factor is striking a balance between frictionless client service and reliable security. In the UAE, banks and payment providers such as Visa are working to strengthen card protection for online transactions, adding to the process an extra layer of security. Online retailers will collaborate with payment processors to follow Verified Visa protocols, ensuring that the legitimate owner makes payments of the Visa account by giving the shopper a one-time password.
We have seen domestic and international growth on the digital merchant side, including a range of digital startups with in-app and mobile world-class shopping experiences. Simultaneously, we have seen conventional retailers go digital across all industries, and global brands have opened delivery services to the UAE, making it easier for customers to obtain seamless products.
The UAE is a long way off from going digital, with 75 percent of all transactions still being conducted in cash, but the country has already laid a solid foundation for going digital. Dubai is among the quickest economies in the region to move away from cash. Card payments continue to rise in the UAE, with Visa's research reporting a 70 percent increase in 2018 compared to 68 percent in 2017.
Despite being late to the game, the MENA e-commerce market has gained traction over the past couple of years. If the ecosystem continues to develop, it will experience substantial growth. E-commerce adoption in the area is still at its early stages, and there will be several forms in the future.
The growth trend of e-commerce has varied depending on the industry. Bringing in major players could help accelerate the transition to e-commerce and customer readiness as well as the growth of the ecosystem's various components.
The MENA region has made significant progress in solving some of the problems associated with the e-commerce ecosystem over the past few years. Nonetheless, quantum leaps are required in some places to facilitate the long-term growth of e-commerce, payments, and logistics.
In the MENA e-commerce market, there has never been a better time. Currently, the market is worth 8.3 billion dollars, but it is expected to reach 28.5 billion dollars by 2022. There is a need in the area for a more comprehensive online range of products and shopping experiences. Companies that specialize in e-commerce expand into new markets and product categories. E-commerce is central to retailers' strategies. Payments and logistics have come a long way even though there are many obstacles in the e-commerce ecosystem.
E-commerce is entering a critical region as the momentum of the last few years grows. Customer, company, investor, and ecosystem players all depend on the opportunity. If the three Ps: product selection, payments, and product delivery come together quickly, the growth rate will be exponential or linear. The adoption of the internet and investment in digital media has been undergoing exponential growth over the past few years.
Over the years, e-commerce growth in the UAE has been largely driven by the retail sector and the mall community. A number of new e-commerce businesses are predicted to make significant waves in the UAE's e-commerce industry. The business-friendly climate of Dubai and other places in the UAE attracts e-commerce companies from developed countries.
For the readers, Shams media city free zone authority is providing an e-commerce license for AED 5,750 for one year and if you are going for multiple years there will be huge discounts. We can apply for up to six visas for the e-commerce activity from the free zone. Read more on e-commerce license for AED 5,750