During the Covid-19 epidemic, internet shopping acquired exceptional traction. Lockdowns were imposed worldwide, causing people's movements to be limited or completely stopped. Many companies rushed to develop an online equivalent of physical locations. Businesses with a vision and hunger to examine the e-commerce environment saw their profit margins skyrocket.
During the epidemic, the UAE experienced a lot of interest in e-commerce. In 2020, sales in the online retail industry hit a new high of $3.9 billion. In addition, the consumer electronics sector increased by 31%, while the food and beverage business earned over $400 million. Therefore, the UAE is the proper place to launch an online e-commerce business.
If you are determined to open an e-commerce business in Dubai, for example,, you must obtain a license for the same. Read more about the e-commerce license in Dubai.
Top E-commerce Start-ups in UAE
Let’s have a look at some of the successful start-ups in the UAE:
- The Luxury Closet.
Factors Responsible for Growing E-commerce Startups in UAE
The factors that drive the e-commerce entities to boost in the ground of UAE includes:
- Due to its geographic and economic settings, the United Arab Emirates (UAE) is well-positioned to capitalize on the booming e-commerce business.
- Furthermore, Dubai is regarded as a gateway to the rest of the world, having one of the worlds most significant and most technologically sophisticated logistical infrastructures and a favorable environment for corporate growth and employment creation.
- Even though Covid-19 has sparked the reforms, there are additional attractions luring investors and businesses to the UAE:
- First, the UAE government is committed to helping entrepreneurs succeed.
- Area 2071, Hub71, FinTech Hive and Dubai Future Foundation are some quick business incubators available to entrepreneurs.
- The UAE has an internet penetration rate of 100.9 per cent.
- The UAE government's policy measures to promote a cashless economy and transaction digitization;
- Smart Dubai, Payfort, Ali Pay, CC Avenue, and PayTabs are examples of e-payment platforms that have been adopted.
The faith that online consumers have in e-commerce and e-payment platforms has improved significantly. The UAE has unrivalled logistical infrastructure.for example, there is a whole free zone in Dubai solely for logistics. Learn more about Dubai Logistics City (DLC) free zone.
Future Scenario of the E-commerce Industry in the UAE
The estimated value of e-commerce sales in the United Arab Emirates in 2022 is USD 27 billion. The UAE has the most advanced e-commerce sector in MENA, with a penetration rate of 4.2 per cent, which is predicted to rise by an average of 23 per cent by the end of 2022.
According to the Dubai Chamber of Commerce and Industry, retail sales in the UAE are predicted to return and expand by 13% to USD 58 billion this year. A cultural transformation would be the most important stimulus for the healthy development of the regional e-commerce business.
Is e-commerce capable of replacing the conventional purchasing experience? Or will both in-store and online commerce networks flourish and complement each other?
It'd be great to learn what tactics significant players have to overcome cultural hurdles. But one thing is certain: e-commerce in the UAE will continue to thrive.
If you form an e-commerce company, that is not the last process. Learn more about the steps to be taken after incorporating an e-commerce company in Dubai.
Emerging Opportunities in E-commerce Industry in the UAE
New and established business owners can concentrate on the following areas:
1. Clothing and Fashion
Dubai is, without a doubt, the fashion capital of the Middle East. According to projections, the fashion industry is expected to reach $4.68 billion in 2022.
The fashion sector's entrance into the e-commerce business has significantly increased sales. So, if you operate a firm in the fashion industry, make a call by developing a new app or website.
The UAE has become a hub for international events requiring decorating and expanding the flower culture or flower business scope.
Whether for giving or any other event, the delivery of flowers in a short period has motivated some entrepreneurs to enter the market and push the sector.
Grocery applications are another rapidly developing e-commerce area. If you want to open a grocery store in Dubai, you must have a license. Learn more about the grocery license in Dubai.
Shopkeepers can create their app or connect with a third party to help them with delivery.
If you're looking to start a similar business in Dubai, here's a guide to getting a grocery license in Dubai.
4. Food Distribution
One of the most profitable divisions of the e-commerce industry is food delivery. Restaurants aren’t the only ones that may benefit from partnering with an e-commerce platform to expand their business.
Even homeowners can register with a third party or develop their own app to deliver home-cooked meals.
So opening an e-commerce startup in the UAE will be profitable if you are willing to do one.
However, opening a startup in a foreign country is not easy. You need professional help here.
Business Setup Worldwide can assist you in the process. In addition, we offer a range of activities relating to the company formation process.
Contact us anytime, and our professionals are always ready to help you out.
1. Does one have to be physically present during the company formation process?
No, it is not necessary.
2. Who will issue the trade license in Dubai mainland?
Department of Economic Development (DED).
3. If I operate my e-commerce company remotely, do I have to have an office in the UAE?
Yes, having a registered office is mandatory.
4. What is the B2B model of business?
In a B2B business model, a company sells its product or service to another company.