Though the covid pandemic has slowed down all global economies, the GCC’s retail market is projected to grow by almost 22 per cent to approximately USD 308 billion in 2023 with the UAE and Saudi Arabia leading from the front and accounting for the major share of retail sales over the coming five years.
The GCC’s physical retail infrastructure has become highly developed and so has the consumer’s familiarity with online shopping portals. The two biggest economies in the Arab world, the UAE and Saudi Arabia, would contribute more than 75 percent of sales over the next five years, a forecast revealed.
An increase in per capita GDP along with population growth will be primarily responsible for the high growth rate. Tech-savvy young generations and higher consumer awareness are also facilitating a boost in the retail sector market and help these two countries to diversify their economies in the non-oil sector. As the tourism sector opens up, the retail sector will see further growth in revenues.
As the economy of UAE grows at a faster pace compared to its other GCC peers due to sound government policies such as easing of visa restrictions and renewed infrastructural spendings and economic stimulus packages, UAE is expected to lead the retail sector growth in the GCC. The yearly growth in retail sales is projected between 2.2 per cent to 5.1 per cent in the GCC in the next four to five years.
E-commerce in the UAE is also witnessing staggering growth and becoming the fastest-growing economic sector in the entire Middle East region on the back of improved digital connectivity, better infrastructure and substantial growth in demand in apparel, white goods and consumer electronics sectors. The recent Amazon annual White Friday Sales in UAE with a huge discount of 70 per cent bears testimony to how popular the e-commerce market is becoming in this country.
The Riyadh Chamber of Commerce also reported recently that the e-commerce sector in the Kingdom is growing at a faster pace and the transaction volume in the sector hit SR21.375 billion last year.
The statistics available with the Saudi Ministry of Commerce revealed that in comparison with 2019, there has been an increase in the number of licensed online stores in 2020 by almost 14 per cent. The online stores also registered an all-time high commercial record of 28,676. Electronic platforms have also registered considerable growth in recent times. While e-commerce in the UAE is 4.2 per cent of total retail, in KSA it is around 3.8 per cent.
The social restrictions imposed by the governments to mitigate the coronavirus pandemic has resulted in an increase in online spending in the GCC. The e-commerce space in the region is witnessing an annual growth rate of 25% and will touch USD 28.5 billion in 2022, a high-level official of Amazon commented.
Big e-commerce companies such as Amazon and JD.com have already decided to expand their operations in the KSA. Many GCC startups are also showing interest in company formation in Saudi Arabia for providing localized solutions and gaining access to the relatively nascent but fast-expanding market in the country.
To address its expansion strategy of doing business in Saudi Arabia, Amazon recently embarked on opening five new delivery stations in Saudi Arabia including cities of Jeddah, Mecca, Abha, and Dammam with a 36,000 sqm floor area in total.
There is an immense potential for employment generation in the e-commerce sector and the logistics and delivery service areas greatly promoting the economic environment in the GCC. As technology helps humans reach millions of products online sitting at the comfort of their homes, online retail both globally and in the GCC are all expected to grow leaps and bounds soon.
The GCC’s physical retail infrastructure has become highly developed and so has the consumer’s familiarity with online shopping portals. The two biggest economies in the Arab world, the UAE and Saudi Arabia, would contribute more than 75 percent of sales over the next five years, a forecast revealed.
An increase in per capita GDP along with population growth will be primarily responsible for the high growth rate. Tech-savvy young generations and higher consumer awareness are also facilitating a boost in the retail sector market and help these two countries to diversify their economies in the non-oil sector. As the tourism sector opens up, the retail sector will see further growth in revenues.
As the economy of UAE grows at a faster pace compared to its other GCC peers due to sound government policies such as easing of visa restrictions and renewed infrastructural spendings and economic stimulus packages, UAE is expected to lead the retail sector growth in the GCC. The yearly growth in retail sales is projected between 2.2 per cent to 5.1 per cent in the GCC in the next four to five years.
E-commerce in the UAE is also witnessing staggering growth and becoming the fastest-growing economic sector in the entire Middle East region on the back of improved digital connectivity, better infrastructure and substantial growth in demand in apparel, white goods and consumer electronics sectors. The recent Amazon annual White Friday Sales in UAE with a huge discount of 70 per cent bears testimony to how popular the e-commerce market is becoming in this country.
The Riyadh Chamber of Commerce also reported recently that the e-commerce sector in the Kingdom is growing at a faster pace and the transaction volume in the sector hit SR21.375 billion last year.
The statistics available with the Saudi Ministry of Commerce revealed that in comparison with 2019, there has been an increase in the number of licensed online stores in 2020 by almost 14 per cent. The online stores also registered an all-time high commercial record of 28,676. Electronic platforms have also registered considerable growth in recent times. While e-commerce in the UAE is 4.2 per cent of total retail, in KSA it is around 3.8 per cent.
The social restrictions imposed by the governments to mitigate the coronavirus pandemic has resulted in an increase in online spending in the GCC. The e-commerce space in the region is witnessing an annual growth rate of 25% and will touch USD 28.5 billion in 2022, a high-level official of Amazon commented.
Big e-commerce companies such as Amazon and JD.com have already decided to expand their operations in the KSA. Many GCC startups are also showing interest in company formation in Saudi Arabia for providing localized solutions and gaining access to the relatively nascent but fast-expanding market in the country.
To address its expansion strategy of doing business in Saudi Arabia, Amazon recently embarked on opening five new delivery stations in Saudi Arabia including cities of Jeddah, Mecca, Abha, and Dammam with a 36,000 sqm floor area in total.
There is an immense potential for employment generation in the e-commerce sector and the logistics and delivery service areas greatly promoting the economic environment in the GCC. As technology helps humans reach millions of products online sitting at the comfort of their homes, online retail both globally and in the GCC are all expected to grow leaps and bounds soon.
