Analyst Insight by Karen Van Diesen - Research Analyst
Bricks and mortar retailers in the UAE have long been in denial about the internet being a viable threat to their businesses. But, as the rising growth of this channel in recent years has illustrated, internet retailing is not only making its mark, it is here to stay.
With all the mall extensions in the UAE, one can be forgiven for not thinking internet retailing has much potential in the country. The strong shopping culture, challenging logistics and a weak investment climate for online retailers have all posed a strong hurdle, hindering the channel from really taking off. In recent years, however, e-commerce players have been making strong headway in overcoming these barriers. Euromonitor International’s growth figures show the channel has tripled in size over the past five years, with sales reaching AED2.0 billion in 2014. And, the future of internet retailing also looks bright, with an expected constant value CAGR of 38% between 2014 and 2019.