Showing posts with label UAE delivery service provider Market. Show all posts
Showing posts with label UAE delivery service provider Market. Show all posts

Monday, April 17, 2023

UAE E-Commerce logistics is aiming to reach AED 3.0 Bn Market by 2027. Will it be able to achieve it?: Ken Research

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The global e-commerce market has grown dramatically over the past years, transforming the dynamics of consumer behavior and business models in various industries. In the retail sector, the global e-commerce market is expected to continue growing between 2022 and 2027. Escalation in the number of smartphones in the country, high consumer confidence, changing consumer preferences, etc. have augmented the growth of e-commerce leading to surging demand for e-commerce logistics as well in the country. The e-commerce industry in the country is not limited to retail, several industries have demonstrated an increase in e-commerce volume shares such as entertainment, travel services, and airlines.

UAE E-Commerce Logistics Market

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1. E-Commerce Logistics Players in UAE delivered ~60.0 Mn Orders in 2020, growing due to high internet penetration & Smartphone users.

UAE E-Commerce Logistics Market

9.98 million people in the UAE are internet users in 2022, which represents 99.01% of the total population. UAE’s smartphone users make up a total of 9.80 million and they spend around 4 hours and 35 minutes on the internet. This internet is used for shopping, travel, entertainment and a variety of other reasons. Due to people having access to fast internet services and high rate of smart phone users in the country, more and more orders were placed. This lead to the millions of orders placed, especially during the pandemic.

2. Amazon, Noon & Namshi are highly preferred for online shopping owing to large variety & better quality of products.

UAE E-Commerce Logistics Market

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In the last 5 years, e-commerce companies like Souq.com and Namshi have exploded in popularity. The ease of online payments through other applications have made people more fond of online payments for e-commerce, thus increasing internet retail by 40%. Amazon’s acquisition of Souq.com for $580 million paved the way for the American technology giant’s entry into the MENA Region in 2017. Moreover, marketplaces such as Amazon (formerly Souq), Carrefour UAE, Noon, Jollychic and Farfetch are poised to continue to put pressure on traditional brick-and-mortar stores due to strong digital infrastructure and improved trust in these big e-commerce players.

3. 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.

UAE E-Commerce Logistics Market

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E-Commerce accounts for a bigger share of total UAE card payment transaction values in 2020, compared to pre-pandemic predictions. 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. Post Covid outlook is that 43% will continue using contactless payments and 48% will opt for digital payments online over COD for future e-commerce purchases. Furthermore, government initiatives for cashless transactions have created familiarity with the process of E-Payments and facilitating availability of channels. These factors are giving a major boost to Ecommerce Industry.

4. Major Warehousing Concentration Lying in Dubai Emirate owing to presence of major Seaports, Airports & Retailers in the region.

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Companies such as DHL, UPS and FedEx have penetrated the local market through effective collaborations with domestic companies. These companies have built warehouses to cater to the cross border shipments. Moreover, warehouses are concentrated mainly in Dubai region with few warehouses located in Abu Dhabi, Ajman & Sharjah.

The country’s recent efforts at economic diversification to decrease reliance on oil exports’ revenues have proven successful in building and maintaining a strong economic ecosystem, which has driven investments and created job opportunities, thus attracting global talents will play a big role in achieving the AED 3 Bn mark by 2027. Furthermore, fast adoption and innovation, has enabled the UAE’s e-commerce growth. Moreover, the e-commerce industry in the country is not limited to retail, several industries have demonstrated an increase in e-commerce volume shares such as entertainment, travel services, and airlines. All these factors will likely contribute in reaching AED 3 Bn mark by 2027.

Thursday, April 13, 2023

Changing Landscape of the UAE E-Commerce logistics Market post-Pandemic: Explore the key trends that are driving AED 500 Mn Market: Ken Research

 UAE E-Commerce Logistics Market, which surged ahead with over 21.6% year-on-year growth in 2020, is poised to be a staggering AED 3.0 Bn industry by 2025, as per findings released by Ken Research.

The UAE E-commerce industry has witnessed an upward trajectory over the past 5-6 years with an increase in internet penetration in the region. Escalation in the number of smartphones in the country, high consumer confidence, changing consumer preferences, etc. have augmented the growth of e-commerce leading to surging demand for e-commerce logistics as well in the country. The COVID-19 pandemic has also pushed the demand in the market as the need for social distancing has forced people to rely on online shopping. The growth in the E-commerce orders for logistics has been majorly driven by an increase in internet affinity and demand for value-added services.

UAE E-Commerce logistics Market

Click to Read Full Article: UAE E-Commerce Logistics Market

1. Impact of COVID-19 resulted in shift in preference among UAE residents from Cash to Online Payment Methods.

UAE E-Commerce logistics Market

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With initial concerns regarding disruptions in supply chain, Logistics industry of UAE displayed resilience and adapted to ‘new normal’ delivery techniques. 68% respondents have reduced shopping at physical stores and are undertaking online purchases.  COVID-19 and followed restrictions prompted customers to switch to undertake online payments over COD. Moreover, imposed social distancing measures and curfews caused a mass switch to online shopping. Furthermore, traditional brick-and-mortar brands started restructuring product offerings to meet new consumer demands by going digital and selling online.

2. Dubai & Abu Dhabi account for more than half of the Total E-commerce Shipments in UAE Owning to Large Tourist Base with Decent Purchasing Power.

UAE E-Commerce logistics Market

Currently more than half of the demand comes from Dubai & Abu Dhabi region. However, this share is expected to come down in future, as tier II and lesser cities will become new demand centers driven by increased internet penetration, increase in number of smartphone users, rise in per capita income and increasing propensity to purchase online. Currently, high proportion of online shoppers that is ~80-85% of them belong to Dubai, Abu Dhabi & Sharjah Emirate. Strategic geographical location with access to large number of markets such as GCC, Africa, Europe, China, India and Japan lead for high concentration of warehouses in this part of UAE.

3. High number of orders are placed in Ramadan, Black Friday & Holiday Season sale Months in UAE with an Average Growth of 20-30% compared to Non Seasonal Days.

UAE E-Commerce logistics Market

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The holiday shopping season (in December near Christmas) is the busiest moment of  the year for most retailers. In 2019, searches for ‘Black Friday deals’ were also up ~25%, and started to rise 3 weeks before the moment. Moreover, in the same year, ~50% of consumers noted that they increased their spending during the Holy Month. In 2020, Ramadan related searches started to rise up to 2 months prior to the Holy Month and continued until one week after. Furthermore, Valentine’s Day has become one of the biggest opportunities of the year for digital retailers, with queries like ‘same day delivery (up 22% from 2019)’ and ‘romantic restaurants’ showing massive growth.

4. Initiatives such as Dubai CommerCity & Dubai E-Commerce Strategy have been the Few Government Regulations which Has Promoted the Market.

UAE E-Commerce logistics Market

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Dubai Government has committed to building a free trade zone specifically dedicated to e-commerce, Dubai CommerCity, split into three clusters. The three clusters are Business, Logistics and Social. Additionally, with an area covering 2.1 Mn sq ft and an investment of around $3.2 billion, it is uniquely designed for the best and upcoming e-commerce players. Moreover, the UAE remains the most active in attracting funding, with UAE-headquartered start-ups garnering 30% of all deals and 70% of total funding. This is attributed to continued govt. support, corporate venture interest and growing investor appetite for start-ups. Furthermore, the country has been successful in attracting quality talent and labor from around the world at globally competitive rates.

Because of the COVID-19 outbreak, there has been a shift from offline to online sales, which is expected to continue to grow significantly in the future. The country's e-commerce logistics market is expected to grow as a result of new technologies such as Automation, Blockchain, and the Internet of Things, which will be investigated in order to increase efficiency, improve customer experience, and improve service quality.