The retail sales in the United Arab Emirates are expected to make a recovery and grow by 13% to reach $58 billion by the end of 2021, an analysis from Dubai Chamber of Commerce and Industry has projected.
The COVID-19 pandemic disrupted a lot of the business in the UAE as well as across the globe but things are starting to recover despite the third-wave of pandemic on the cards. The growth is primarily down to the pent-up demands of the consumers, COVID-19 vaccinations, and Expo 2020.
The long-term projects (by 2025) were estimated to be around $70.5 billion, which was forecasted on the expected 6.6% annual growth rate. The store-based retailing growth forecast at a CAGR of 5.7%, while non-store retailing is forecast to grow at a CAGR of 14.8%.
UAE has ramped up its efforts for the COVID-19 vaccination as well to ensure that everyone has a safe environment. This will also attract the tourists and help to get the customers back into the traditional stores, which will ultimately help in boosting the economy.
The Dubai Expo 2020 was postponed due to the first-wave of COVID-19 but is expected to kick off later this year in October; this is considered to be a major catalyst for the recovery of the retail sector. It is worth pointing out that the government also extended huge support and lots of incentives to these a number at a federal and local level during the pandemic.
As for the e-commerce industry, UAE is well ahead of Middle East and North America in terms of household spending on e-commerce at $2,554, which is considered to be twice the global average of $1,156, and four times more than the MENA region average which is $629.
According to JLL:
Dubai saw 110,000 square metres (sqm) of retail gross leasable area (GLA) completed in 2020, which brings the emirate’s total retail stock to 4.2 million sqm.
The Abu Dhabi retail stock, however, remains unchanged at 2.8 million sqm.
Lastly, the report concluded that due to the pandemic there has been a shift to the digital side, which has opened up doors to new growth opportunities for regional expansion. It has also helped convert a number of customers online and reaffirm their faith in e-commerce marketing that will be hugely beneficial in the long run.