The UAE’s retail sector is currently growing at a CAGR (Compound Annual Growth Rate) of 3.7%, reaching “no less than 275 billion dirhams ($74.87 billion) by 2028," according to the President and CEO of Dubai Chambers.

E-commerce has been a significant driver of this growth, which grew by 10% in 2023 and it will continue a “double digit” trajectory over the next five years to top AED 42 billion, said Mohammad Ali bin Rashed Lootah.

Speaking with Zawya on the sidelines of The Retail Summit at the Atlantis The Palm, Lootah said the Dubai Chambers’ focus in retail is now to bridge the gap between brick and mortar and e-commerce by leveraging opportunities in the traditional sector.

“Since the pandemic, people have realised that the hybrid model is not only a necessity but a growth opportunity. The Dubai Chamber of Digital Economy has been facilitating this drive through e-commerce initiatives, but not limiting to this alone. We are cutting across the tech sector to fuel expansion in Agri-tech, FinTech, EdTech, telemedicine – the list goes on,” said Lootah.

The UAE is ranked as the 45th largest market globally for e-commerce, with a projected revenue of more than $6.7 billion in 2024, according to Euromonitor data.

The Dubai Chambers head said the organisation has been actively working with local retailers to enhance their omnichannel capabilities.

“We try to utilise the advanced digitalisation that the digital economy provides by enhancing productivity in traditional sectors. Secondly, investing in human capital and knowledge and exchange opportunities, which will eventually touch the end consumer directly through appetite and behaviour,” he said.

New e-commerce players are also poised to enter the market, which will drive the “continued growth in Foreign Direct Investment” in the UAE, he said.

“We’ve had some key names enter the UAE market in recent years and there are some new players from markets such as China with retail offerings that are different from what we have seen before that have immense growth potential here,” Lootah said, without mentioning names.

He continued: “We have also seen players coming in from important markets such as Turkey and the EU in recent years and this has been happening because the country’s infrastructure supports both bricks and mortar and e-commerce experiences so effectively.”

Lootah said they were looking to build on networks already in place in emerging markets such as Latin America, Asia and Africa.

“Ultimately, we expand to new markets as the need arises and to follow the directives set forth for us by the UAE’s Digital Economy Strategy,” he said, referring to directive launched in April 2022 by the UAE government to double the contribution of the digital economy to the UAE’s GDP from 9.7% in 2022 to 19.4% within 10 years.

(Reporting by Bindu Rai, editing by Seban Scaria)