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Dubai marketplace structure and why Dubai is lucrative for selling products online?

Dubai marketplace is huge and a hub of millionaires and billionaires mainly because of their business-friendly policies.  Dubai’s online economy has changed a lot before and after the COVID. Historically speaking, most of the UAE residents were reluctant in e-commerce adoption and relied more on brick and mortar businesses and cash on delivery as a way of payment. Now they use digital payments and prefer online shopping.  In this blog post, we will cover the Dubai marketplace from the socio-economic perspective and how selling in Dubai is easy and lucrative with on-point stats.

Table of Contents

Dubai marketplace structure: Socio-economic

The population of Dubai is 3.3 million and rising where Emirati citizens are in minority in Dubai and UAE both as a major population is expatriates from around the world.  Dubai is one of the wealthiest cities in the UAE with a large middle class and extensive labor class. This city has more men than women as the economy relies heavily on the expatriate unskilled labor force. Some eye-opening stats to consider:

  • Dubai ranks as the 29th most popular city for the world’s ultra-wealthy.
  • UAE’s financial wealth improved to $600billion in 2020 despite the Covid situation.
  • More millionaires were created during Covid 19 pandemic than ever before.


MENA Region including Dubai was not as fast in adoption of eCommerce

Compared to other parts of the world, the MENA region, UAE and Dubai are historically the least ones to adopt eCommerce. They preferred brick-and-mortar businesses and cash-on-delivery or in-person relationships with sellers.

After Covid, the consultancy firm Kearney revised its predictions for the e-commerce market in the Gulf region (GCC) from $21bn in 2020 to $24 billion. By 2025, they estimate the market in this part of the Middle East will have doubled to $50 billion per year.

Factors contributed towards eCommerce adoption

There are a number of factors that could be associated with the adoption of eCommerce in Dubai and the Middle East overall.

1-Digital savvy youth

2-Youth population is more

3-More usage of smartphones

4-Lockdowns amid Covid 19

5-Increased choice for consumers online

6-Launch of digital frontiers (Virtual Dubai Mall, Lulu Hypermarket online service)

Factors contributed towards ecommerce adoption in Dubai marketplace

Top 7 industries by number of deals – FY 2019 vs Q3 2020 (Image from JETRO MENA Venture Ecosystem)

Top 7 industries by number of deals
A report by WAMDA and the Legatum Center for Development and Entrepreneurship at MIT notes ‘that “today, 80% of young Arabs shop online frequently, compared to 71% in 2019. In addition, 50% of those aged 18-24 in MENA are shopping more online after the pandemic.”

E-grocery market revenue doubled in UAE and KSA in COVID 19

The residents of Dubai caught their habit of online shopping during COVID and there is no going back. The revenue of e-grocery market doubled in Dubai, UAE, KSA during COVID.

E-grocery market revenue doubled in UAE and KSA in COVID 19

This is good news for governments and investors all across the region who have taken steps for this kind of encouragement in online shopping compared to the previously hesitant buyer.

Existing ecommerce properties flourished

In the last year and 2021, ecommerce properties have seen growth. There is an acquisition of Mumzworld (one of the largest mother and baby ecommerce portals in the Middle East) by the Tamer group in Saudi Arabia. One of the steps towards online expansion. Two companies like Saudi Technology Ventures (STV) and Middle East Ventures Partners (MEVP) are kept on investing in online apps making payments cashless like Saudi e-grocer Nana (secured $18m in Series B funding in 2020). Do you know ecommerce and fintech companies are growing like crazy in Dubai and MENA region? According to MAGNiTT, ecommerce (43 deals closed) and fintech (43 deals closed) are the best performing industries in the Middle East.

1-Dubai SMEs proactively built their digital presence during COVID

COVID has forced SMEs to respond digitally as they develop their digital presence during the pandemic and introducing online shopping capabilities from grocery, medicine to retail and hoteling.  Also, from another report by WAMDA ‘80% of young Arabs shop online frequently than 71% from 2019. And this is no surprise that ‘50% aged 18-24 in MENA’ like we mentioned earlier.

2-Contactless payments

A UAE-wide survey conducted in 2021 by Visa, Dubai Police, and Dubai Economy (DED) revealed that there is an increase in digital payments and this is in the context of contactless cards and mobile wallets.  This survey also emphasized the figure that 45% of the respondents say that they will keep on buying via contactless payments more.

Digital payments, mobile wallet development, cashless payment system, or development of an eCommerce store with an in-built digital payments system – we can do it all really well. Reach out.

What’s required to move a business online?

An insight from McKinsey

Five main capabilities to move online

Do i need a license to sell online in Dubai?

Yes, you need to have a license to sell online in Dubai/UAE.  E-trading (where the seller owns the product) company can be incorporated within 3 working days and this will cost you USD 4.500+. Requirements include a copy of passport, last utility bill, CV, and bank reference letter.  Ecommerce based setup requires 3 working days and costs you USD 8.300+. You must have a copy of your passport, last utility bill, CV, and bank reference letter.

Final verdict

Dubai businesses are looking to tap into the growing market of online shoppers. Dubai marketplace has tremendous growth potential because it’s still in its nascent stages. The youthful population and high usage of smartphones make the Dubai marketplace even more lucrative.  Whether you have a new online business and want an e-commerce development or already have a retail business and want an online presence, we can help.

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