The e-commerce market in the United Arab Emirates (UAE) is projected to experience significant growth, with estimates indicating it will surpass AED 48.8 billion by 2028. This growth is attributed to the increasing demand for online shopping and rapid advancements in the digital economy.

In 2022, the Dubai Chamber of Commerce had predicted that the UAE’s e-commerce retail market would reach $9.2 billion by 2026. However, the market exceeded expectations by crossing $11 billion in 2024. Some industry sources estimate that it will reach $25 billion by 2029, reflecting an annual growth rate of over 12 percent. Various market studies by government and independent agencies, including Euromonitor, Statista, and Mordor, have recognized this rapid expansion.

Proactive leadership and favorable policies have positioned the UAE as an attractive destination for e-commerce. The emirates of Dubai, Abu Dhabi, and Sharjah are leading efforts to foster a vibrant e-commerce ecosystem through their respective free trade zones. Simplified licensing procedures and strategic initiatives have encouraged new entrants and startups, with the e-trader license category in Dubai growing at 25 percent, resulting in over 14,000 licenses issued last year, according to a report by Black Sawn Services.

The Abu Dhabi Chamber has introduced an ambitious UAE Digital Commerce and Innovation Growth Plan, while Shams Sharjah Media City is home to local e-commerce firms. The Ras-al-Khaimah Economic Zone (RAKEZ) has also been actively promoting e-commerce businesses. Dubai CommerCity, the first dedicated free zone for digital commerce in the Middle East and North Africa, aims to create a comprehensive ecosystem for businesses in this sector.

The quick commerce market is also gaining traction in the UAE, driven by the population’s density and fast-paced lifestyle. Revenue from this market is anticipated to reach $3.65 million by 2025, with a projected annual growth rate of 8.02 percent from 2025 to 2029, resulting in a market volume of $4.97 million by 2029. Recently, Flowwow reported a 62 percent increase in purchases in the MENA region, along with an 86 percent growth in sales turnover compared to the previous year.

Consumer behavior indicates that around 49 percent of UAE residents shop online frequently, with approximately 47 percent using credit cards for online transactions. This reliance on digital commerce is significantly higher than the global average of 18 percent, showcasing the advanced state of e-commerce in the UAE.

Acknowledging the importance of this sector, the Dubai Chamber of Commerce has established the e-Commerce Business Group (ECBG) to facilitate policy changes and legislative improvements that enhance business operations. The e-commerce sector is poised to be a major economic driver in the UAE, contributing to its reputation as a leading global business hub.

Dr. Dhrupad Mathur, a founding member of the e-Commerce Business Group and an Associate Professor in Technology Management at S P Jain School of Global Management in Dubai, emphasizes the significance of these developments in shaping the future of the e-commerce landscape in the region.