Hamburg-based business research firm yStats.com’s new report, “UAE B2C E-Commerce and Payment Market 2020 & COVID-19’s Impact,” provides insights into the development of online retail sales in the Emirates. The publication reveals that the boost to digital shopping in the UAE because of the coronavirus pandemic will likely be sustained long term despite underlying weakness in the economy.
Rapid growth in online commerce during the pandemic
Since the onset of the COVID-19 pandemic, the UAE has experienced a boost in its already developing E-Commerce market. Owing to the lockdown restrictions, consumers started turning more towards online shopping, which resulted in an increased number of new online retail businesses. The E-Commerce sector received the highest number of permits issued to any retail business in the UAE. During the lockdown period, online retail sales increased by more than half as the regularity of making online purchases increased. According to a report cited in the yStats.com publication, one-third of Internet users in the UAE increased their online shopping activities in March 2020.
Clothing and food are the most ordered items amid the health crisis
After the coronavirus health crisis hit the UAE, the best-selling product categories purchased online were clothing and footwear followed by electronics, packaged food and fresh grocery. Furthermore, shoppers have started buying some products online more than before, such as home entertainment items, food takeout and delivery as well as beauty products. The pandemic kindled an overall change in the choice of products purchased online and other online verticals such as digital entertainment. During the COVID-19 health crisis, a significant share of adults started using online streaming services more than before the outbreak, according to a June 2020 survey cited in the yStats.com report.
Increased share of consumers are switching to digital payment methods due to COVID-19
Cash on delivery was the top payment method used by online shoppers in the UAE prior to the outbreak. However, due to the fear of contracting the COVID-19 virus by touching cash, consumers started opting for more hygienic and secure payment methods which resulted in an increased share of shoppers who switched to digital payment methods. Furthermore, according to a study in June 2020, more than half of digital payment users preferred using contactless cards to pay in-store. Another important study cited by yStats.com mentions that a large quota of shoppers in the UAE plan to continue the use of contactless payments even after the pandemic is over.