Sectors such as fashion and beauty are seeing rapid growth, reflecting the evolving tastes of a diverse consumer base. Dubai’s digital readiness offers a clear competitive advantage for startups like Eyewa, an omnichannel eyewear retailer that recently raised $100 million.
“Dubai has one of the most digitalised economies in the world. This allows digital-native startups like ours to leapfrog. We move from idea to roll-out at lightning speed and are met with customer adoption very quickly,” says Anass Boumediene, Co-founder and CEO of Eyewa, an omnichannel eyewear retailer, that recently raised $100 million.
Driving forces behind the boom
The Dubai Chamber of Commerce and Industry forecasts e-commerce to generate $8 billion in sales by 2025, mirroring the global market, which is projected to reach a revenue of US$6.35 Trillion by 2027, as highlighted in the paper by Deloitte, The thriving e-commerce landscape in the Middle East.
This surge in e-commerce can be attributed to factors like the widespread adoption of smartphones, enhanced internet connectivity, and the convenience of online shopping, according to the report. Additionally, the global demand for quick-fix solutions and rapid delivery services has taken hold in Dubai as well.Policy-driven initiatives and government interventions have also played a pivotal role in this growth. Beyond significant investment in digital infrastructure, Dubai has created specialised e-commerce zones, offering businesses attractive incentives to establish and expand their operations.
Several key drivers shape Dubai’s e-commerce boom:
- Technological advancements: Technological advancements, the use of artificial intelligence (AI) and machine learning (ML), in particular, play a crucial role in shaping the e-commerce landscape in the Middle East, especially in personalising shopping experiences.
- Robust digital payments: Increasing adoption of secure and user-friendly digital payment systems has removed significant barriers to online shopping.
- Government support and policies: The UAE e-commerce law (Federal Decree-Law on Trading by Modern Technological Means) aims to regulate and reorganise e-commerce activities, fostering a favourable environment for digital trade.
- Freezones, e-commerce zones, accelerator programmes: Freezone DMCC and the Dubai Government have launched the DMCC E-Commerce Ecosystem to accelerate the growth of the e-commerce sector across the MENA region, which is currently valued at $32bn and is expected to reach $50bn by 2025.
- Diverse consumer demographics: Dubai’s multicultural population and rising disposable incomes fuel demand for various product categories, from fashion and electronics to health and wellness products.
Landmark achievements
Some of the recent business tidings from the region are also a testament to Dubai’s growing resilience and adaptability and the maturity of its startup space. Talabat, the leading on-demand delivery platform in the MENA region, made its debut on the Dubai Financial Market (DFM) on December 10, marking the largest global technology IPO of 2024.
Meanwhile, WORLDEF—the largest e-commerce fair in the Gulf region—hosted its Dubai edition in December 2024, featuring insights into how its state-of-the-art infrastructure, seamless logistics, and strategic location enable businesses to scale globally.
India-Dubai: Strengthening ties
The UAE government actively supports businesses through various programmes and resources, making it easier for Indian entrepreneurs to thrive in the competitive landscape.
The India-UAE Comprehensive Economic Partnership Agreement (CEPA) was signed between the two countries on 18 February 2022. This historic agreement is expected to accelerate trade between UAE and India and benefit exporters from the country. This allows Indian exporters in various sectors such as textiles, agriculture, dry fruits, gems, and jewellery to get duty-free access to the UAE market.
Opportunities for Indian entrepreneurs
For Indian businesses, Dubai is more than an opportunity—it’s a gateway to a world of possibilities, offering the perfect blend of growth, innovation, and global reach.
- A booming market: Dubai’s vibrant economy and diverse customer base offer endless growth opportunities, making it a prime hub for ambitious businesses.
- Affluent consumers: High disposable incomes translate into significant spending power, creating a lucrative market for quality products and services.
- Ease of doing business: Low taxes and straightforward registration processes make it hassle-free for Indian enterprises to set up and operate.
- Strategic gateway: Perfectly positioned at the crossroads of East and West, Dubai provides seamless access to key markets across the Middle East, Africa, and Asia.
- World-class infrastructure: From top-tier logistics to cutting-edge technology, Dubai ensures smooth operations and efficient delivery, helping businesses stay ahead.
- A melting pot of tastes: With a multicultural population, Dubai offers the chance to appeal to a wide range of preferences, unlocking new market potential.
- Innovation-friendly environment: A hub for creativity and technology, Dubai encourages businesses to adopt fresh ideas and innovative practices.
- Networking goldmine: The city’s trade shows and industry events provide invaluable opportunities to connect with partners, investors, and thought leaders.
- E-commerce on the rise: With online shopping gaining rapid traction, now is the perfect time for e-commerce businesses to establish a presence in this thriving market.
Having worked across India and the UAE, Aina Garg, Regional CEO – of Lenskart, Dubai, says the UAE spearheads an “omnichannel revolution”. While she credits government-backed fintech and logistics investments in Dubai, she also acknowledges “the influx of new residents” in reshaping consumer demand.
“Dubai’s advanced digital ecosystem and high connectivity are transforming how consumers shop, creating a frictionless retail environment,” says Garg.
Emerging trends: The road ahead
Personalisation and customer experience have become crucial aspects of e-commerce in the Middle East. Online retailers employ data analytics and customer segmentation strategies to deliver personalised product recommendations, targeted promotions, and tailored shopping experiences. For instance, Boumediene says, “Eyewa has quickly become the largest network of optical stores in the GCC, having surpassed 150 stores in less than four years from the opening of our first store…This (the) approach of being hyper-local and focused on our customer base has made us successful.”
Investments in logistics infrastructure, fulfilment centres, and innovative delivery solutions are essential to respond to evolving consumer demands and optimise the e-commerce supply chain.
Looking ahead, the future of e-commerce in the Middle East appears promising with heightening opportunities for cross-border e-commerce.
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