How e-commerce is shaping the world


E-commerce has become a new reality in customer journeys around the globe. Companies transform their business models to create innovative and engaging online experiences, and with the right technologies and tools, they can efficiently address the clients’ needs and develop trust for years to come.

GCC e-commerce is on the rise

While considering the global context of COVID-19 pandemic, e-commerce has strengthened its position as the new norm in the MENA region while creating various opportunities in this fast-growing market.  

As data from a recent MIT study revealed, e-commerce annual gross merchandise value (GMV) in MENA increased by 52% YoY and reached $22 billion in 2020. Moreover, it is expected to further grow by 35% and reach $30 billion in 2021.    

The significant growth was generated by consumers’ new shopping patterns, as they preferred to pay upfront for priority products such as grocery, medical and home entertainment. Moreover, the e-commerce boom created a ripple effect across neighbouring logistics and fintech sectors. The leading e-commerce categories in 2020 were electronics, fashion and food delivery. The fastest-growing category was grocery, which saw a jump of about $1.2 billion from 2019 to 2020.

The most rapid changes could be observed in two leading GCC countries, the UAE and Saudi Arabia, where e-commerce has seen the highest market penetration. According to MIT, the UAE e-grocery market saw a 300% growth in the third quarter of 2020 and now is worth $1.1 billion, whereas in Saudi Arabia, it rocketed by 500% constituting $530 million.  

The key e-commerce drivers

Besides the impact of the COVID-19 pandemic, the sharp increase of e-commerce in GCC was generated by the regions’ internet penetration, the high share of digital native millennials at ease with technology, the new ways of shopping, as well as the favourable investment climate and partnerships backed up by strong digitalization focus of the regional governments’ visions and strategies.

1. Internet penetration leading to growth. Being digitally savvy, the UAE and Saudi Arabia are among the leading countries in internet penetration worldwide, which facilitates e-commerce growth – 99% and 96% of the countries’ population in 2020 were engaged respectively according to Hootsuite.    

According to AT Kearney and Consultancy-me, the e-commerce share of retail in the GCC region constituted 6.4 % in 2019, while post-covid it is projected to increase to 9% - 11% in 2021 and is further expected to reach 12% - 16% by 2025. The online retail market in the UAE and Saudi Arabia alone was estimated at $7.5 billion pre lockdownand reached $11 billion or 50% of all the e-commerce regional GMV by the end of March 2020.

2. The online presence of the young population. Alongside the Internet penetration, 80% of youth in the MENA region shop online frequently according to MIT, while half of the consumers aged 18 - 24 buy more online because of COVID. According to a report, 47% of consumers in the GCC region are expected to shop online more frequently in 2021.

3. New ways of shopping. Conversational commerce and super apps are opening new e-commerce markets and segments in the region. According to RedSeer, conversational commerce, where shopping occurs over messaging apps, proved itself as both a viable low-cost option for small players to enhance their digital presence, and an opportunity for larger players to scale at a minor cost. One good example in the UAE is Yanzo, a WhatsApp digital personal assistant. It undertakes the research for the customer’s request, identifies the right suppliers, shortlists options to fulfill an order, and is integrated with a third-party company that delivers the products. Moreover, some of the players are expanding their platforms to multi-functional superapps – like Careem, a vehicle for hire company in the UAE. Onboarding offline retailers to become a part of the ecosystem, the company offers users to purchase products with its mobile wallet and have it delivered by its drivers. Since its launch in June 2020, the company’s riders grew by 1,000%, delivery increased by 400%, and financial transactions doubled

4. VC investments in e-commerce. Investments in e-commerce and marketplace startups is the cornerstone of the entire startup ecosystem of the MENA region. According to a MAGNiTT report, $665 million was invested in e-commerce startups between 2016 and 2019, which made up almost 20% of all the investments in startups during that period.

5. Emerging partnerships. Furthermore, traditional brick and mortar conglomerates created partnerships with startups to migrate online during the pandemic restrictions. For example, Emaar Malls in the UAE, a subsidiary of an Emirati multinational real estate development company, set up an online Dubai Mall in cooperation with Noon.

“Amazon and Noon dominate the e-commerce sector in MENA, accounting for more than 50% of market share.” - Legatum Center, MIT

Other examples include the partnership between Chalhoub Group, a luxury goods retailer and distributor, and Farfetch, a fashion platform aiming to deliver franchised fashion brands, as well as Majid Al Futtaim (MAF), the owner and operator of shopping malls, retail and leisure establishments, partnering with Mr. Usta, an online home service marketplace, as the preferred after-sales solution provider for MAF brands in the UAE.

E-commerce potential in the region

The GCC region has one of the most tech-savvy consumers in the world. According to a Visa report, the region’s population is among the countries with the highest levels of online presence, including smartphones and social media inclusion.

As Hootsuite statistics show, the share of Internet users aged 16 - 64 who shopped online on any device as of January 2021 was 67.2% in the UAE and 77.4 % in Saudi Arabia, while in Indonesia and the UK it constituted 87.1% and 85.5 % accordingly.

Moreover, the usage of mobile devices in making purchases is highly popular among the GCC customers as well. Slightly more than half of the UAE customers used mobile websites and applications to shop online, and in Saudi Arabia, 65.1% made purchases via their smartphones in the same period (vs. 79.1% in Indonesia and 74.2% in Thailand). Only up to 30% of consumers made purchases from desktops, which is almost two times lower than those in Poland (62.6%) and Austria (57.5%). These figures demonstrate the region’s e-commerce further adoption potential across multiple platforms.

The future of the GCC e-commerce

The boom of the e-commerce sector provides businesses with great opportunities in the region. Some of them include:

  1. Omnichannel ecosystems. Today, companies earn customers’ loyalty and trust by the development of omnichannel ecosystems incorporating various in-store and online customer experience channels and different devices in a single intertwined shopping process. Such an approach provides clients with a more integrated, intuitive and personalized customer journeys while ensuring safer and faster delivery.  
  2. Direct-to-consumer (D2C) platforms: D2C approach is a way of selling products directly to customers without the engagement of third-party retailers. Such strategy eliminates many barriers between businesses and their customers, facilitating the former to develop trust. While interacting with consumers directly, companies have more control over the customer journey through hypersegmented analytics, as well as increase their clients’ engagement with their brand, marketing and sales. While being widely adopted by large market players worldwide, it may as well facilitate future growth for small and medium enterprises.
  3. Live commerce: Live commerce is the combination of livestreaming and e-commerce currently virally popular in Asia and making its way to the US and Europe. Customers are offered to buy goods and services during a hosted live video broadcast, which is integrated in the online marketplace and can be accessed from any device. Hosts demonstrate products, answer the viewers’ questions in real time and recommend similar items, and the viewers may simultaneously add the desired products to the basket and purchase them instantly. This new shopping format has great potential for both the broad audience and the exclusive events. Infinite, by JMIND is a white label product for livestreaming and video sharing that can help companies to create shoppable livestreams video platforms.


While gaining increased popularity across the globe, e-commerce has become the new norm in the GCC region. By disrupting various segments and related industries, e-commerce continues its growth in the UAE and Saudi Arabia. Alongside doing business in the new COVID reality, it provides the companies with various opportunities to deliver even more value to their clients addressing their needs in the most innovative, comprehensive and personalized way.

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