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UAE, Saudi and Israel dominate e-commerce space in Mena

Report shows market reached $27b in 2022

The e-commerce market in the Middle East and North Africa (Mena) region $37 billion in 2022, with a double-digit growth rate from 2021 and a 32 per cent compund annual growth rate (CAGR) over the 2018 - 2022 period, a report showed on Monday.

The UAE, Saudi Arabia and Israel accounted for 72.1 per cent of the total market size, acccording to the ‘E-commerce Report in the Mena region’ issued by EZDubai, the fully dedicated e-commerce zone in Dubai South, in collaboration with Euromonitor International, the provider of global business intelligence, market analysis and consumer insights. This is the third edition of the report

The Mena’s double-digit growth is due to robust internet usage, a well-developed infrastructure, and supportive policies. Several trends also contributed, including the increasing popularity of digital payment platforms, the rise of online grocery shopping, and expanding tech initiatives.

E-commerce growth in the UAE, Saudi Arabia and Israel was attributed to a number of factors, including their technologically advanced populations, high-internet usage rates, and strong government finances.

The Mena e-commerce market size is expected to reach $57 billion in 2026, with a CAGR of 11 per cent over the 2022-2026 period. Although countries like the UAE, Saudi Arabia and Israel are expected to remain leaders in e-commerce market share, countries like Algeria are expected to see strong growth.

Mohsen Ahmad, CEO of Dubai South Logistics District, said, “The Mena region’s e-commerce industry has experienced rapid growth in recent years, driven by a combination of factors. Government initiatives have also played a vital role in supporting this growth, with several regional governments implementing policies to support digital transformation and encourage entrepreneurship and investing in the necessary infrastructure and technology to facilitate e-commerce operations. At EZDubai, we recognise the strategic importance of e-commerce to the region’s economic development. We are committed to working closely with the government sector, and local and international businesses to further support the growth and success of this dynamic industry.”

Engy Naguib, senior engagement manager, public sector Mena region at Euromonitor International, said that the demand for online shopping services in the Mena region is expected to continue growing. In particular, consumer electronics are expected to have a penetration rate of 29 per cent for Saudi Arabia and 50 per cent in Egypt within total e-commerce by 2026.

Meanwhile, the food and drink industry in the UAE is projected to experience strong growth, with penetration rates reaching 13 per cent by 2026.

EZDubai was designed to attract leading e-commerce companies and create a benchmark with its infrastructure. The e-commerce zone aims to promote the emirate’s position as a hub for regional e-commerce.