How is the UAE E-Commerce Logistics Market Positioned?
The retail industry in the Middle
East and North Africa (MENA) is on the verge of a pivotal shift. E-commerce is
becoming a reality, reinventing consumers’ path to purchase, forming new
customer experiences, disrupting business models, and creating growth opportunities
for large and small retailers as well as for a new generation of e-commerce
pure players. Mass Internet adoption in MENA took off around the mid-2000s,
mostly driven by smartphones and social media and underpinned by faster
internet speeds.
Currently, the UAE is considered the most advanced e-commerce market in MENA, with a penetration rate of 4.2% in 2017. The UAE enjoys many advantages that make it ideal for e-commerce growth. Its consumer demographic consists of a young internet-savvy population, with high social media usage. These people are more likely than some of their cohort globally to spend time online. E-commerce companies, whether they are online marketplaces, domestic retailers, or cross-border merchants, are tapping into the high latent demand, disposable incomes, and digital penetration that is favorable for the sector. The UAE’s e-commerce landscape is defined by its demographic profile and high income levels, with a high percentage of digital native young adults between the ages of 20 and 39. With all infrastructures, tools and options within ready reach, the UAE consumer, at most times, is only a click away from an online purchase. Brick-and-mortar players in UAE have been following different go-to-market strategies. Alshaya, Apparel Group, Chalhoub Group and Landmark Group established distribution partnerships with third-party e-commerce pure players in addition to launching their own brands online.
UAE
E-commerce Logistics Market has been
observed in its growth stages
of development, thus growing year on year majorly due to rising E-retailing coupled with increase in
the number of online orders. The average last mile delivery charges in
the UAE were evaluated at AED ~ per order in 2015 which further declined to AED
~ in the year 2020.
By Channel
The market has highly dominated
by the 3PL players with a massive share of ~% in terms of annual shipments
delivered during the year 2020. Marketplaces like Amazon and Noon which have
their in house logistics arm are also dependent on 3PL partners to deliver
their orders.
By Domestic
and International Shipments
Domestic shipments (fulfillment
model & marketplace model) dominate the e-commerce delivery in UAE.
Domestic players through effective collaborations with global companies are
enhancing their reach to the remote areas of UAE.
By Mode
UAE being a small country, most
of the shipments are delivered via road. Air express is used majorly for
products coming from abroad. Moreover, ground express plays a significant role
in first mile & last mile deliveries.
By Delivery
Period
1-3 day delivery has dominated
the market in terms of number of orders owing to increasing focus of the
companies on providing better services coupled with increasing customer needs
for better service.
By Type of
Products
Fashion & Accessories and
Consumer Electronics have dominated the online retail sector in UAE in 2020.
Foods and Personal care is the third leading e-commerce category in UAE.
By Payment
Mode
Emiratis still prefer COD over
Prepaid Shipments owing to Lack of Trust but the trend is rapidly changing
owing to increasing adoption of contactless payment options. During Covid,
there has been an increasing interest shown towards digital payments but only
on the trusted websites. Most of the SMEs still offer COD as the only payment
mode in UAE.
By Return
Rate
~% of the online orders got
replaced / returned in 2020. Fashion is the category with maximum returns due
to inappropriate sizes received by the customers followed by Electronics, as
customers return these products due to defective pieces received.
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Key Topics
Covered in the Report
- UAE E-Commerce Market Overview
- Cross Comparison- Major E-Commerce Players in
UAE
- UAE E-Commerce Logistics Market Overview
- Cost Component for UAE E-commerce Logistics
Industry
- UAE E-Commerce Seasonal Demand
- UAE E-Commerce Logistics Market Size
- UAE E-Commerce Logistics Market Segmentation
2020
- UAE E-Commerce Warehousing Landscape
- UAE E-Commerce Warehousing Clusters
- UAE E-Commerce Shipments Pricing Analysis
- UAE E-Commerce Return Logistics Overview
- UAE E-Commerce Logistics Market Growth Drivers
- UAE E-Commerce Logistics Market Trends &
Developments
- UAE E-Commerce Logistics Market Government
Role and Initiatives
- UAE E-Commerce Logistics Market Logistics
Constraints
- UAE E-Commerce Logistics Market SWOT Analysis
- Competitive Landscape of UAE E-Commerce
Logistics Market
- UAE E-Commerce Logistics Market Cross
Comparison
- Future Market Size and Segmentations,
2020-2025F
- Covid-19 Impact on UAE E-Commerce Logistics
Market
- Analyst Recommendations
For more
information on the research report, refer to below link:
Cost
Component in UAE E-Commerce Logistics Market
Related
Reports
Contact Us:-
Ken Research
Ankur Gupta, Head Marketing &
Communications
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