There is hardly any industry that has been left unaffected by the COVID-19 global pandemic. Whether its education, entertainment, brick & mortar businesses, or ecommerce around the world, every industry has got a taste of it. For some industries, the pandemic has not been less than a nightmare causing them to close during the lockdown. For others, the period of lockdown has proved to be a blessing causing them to reach new heights.

E-Commerce around the world witnessed an unprecedented growth during the lockdown. With people stuck at homes and offline retailers closed, either partially or fully, E-commerce seemed a safe and convenient option. This is evident from the sales all major online stores registered. Amazon, the world’s largest online store made a profit of an extra $24bn between January and April 2020. Tesco, a multinational groceries and general merchandise retailer indicated a 28.7% surge in pre-tax profits till August 2020. Nike’s digital sales grew 82% year-on-year between June and August.

E-Commerce Growth in Dubai during Covid-19

Dubai is the business hub of the world. Like everywhere else in the world, traditional businesses in Dubai have been hit hard by the pandemic. The Dubai chamber of commerce held a survey in April 2020 that revealed that the kind of economic slowdown and business loss awaiting the Dubai business community would be bigger than the greater economic crisis in the Middle East that affected Dubai too. Half of the hotels and restaurants, according to the survey, may halt operations next month. The travel and tourism sector is also deeply affected. Logistics, transport, and storage companies are also in the process of being shut down, the chamber reports.

On the contrary, ecommerce businesses flourished following the pattern. While people in Dubai still prefer to shop in physical stores, COVID-19 certainly played its part pushing people to try e-commerce for the first time. According to a study, 35% of respondents in the UAE said that they were currently shopping online for things they would normally shop for in-store. This resulted in a considerable increase in online sales of Dubai based ecommerce businesses. According to MazenKaspo, regional category manager for Amazon.ae, “Coronavirus has become a catalyst for the biggest spike yet which is evident from our data.” The E-commerce giant in Dubai saw a 50% increase in its sales during March and April 2020. The following are some more encouraging statistics for the ecommerce business in Dubai that signify a sustainable shift towards ecommerce.

• 196 licenses were issued to the e-commerce retail business sector in the UAE during May 2020 - the highest number of business licenses to be issued in a sector;
• a 300% increase in consumer demand for e-commerce services in the UAE was recorded in the first five months of 2020; and
• the DED Trader license in Dubai, which supports the growth of UAE e-commerce, has also seen a surge in applications - 943 licenses were issued to new businesses in the first three months of 2020 (a 179% increase from the first three months of 2019). Source

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The Future of Ecommerce in Dubai after COVID-19

E-Commerce has become more prevalent globally, but with quarantine affecting so many people worldwide, the sector is set to grow and diversify even more rapidly. In Italy alone, between February & March, retailers registered an increase in sales by 90%. The UAE is already in the lead with regards to e-commerce. The current digital economy contributes to 4.3% of the nation’s GDP and the UAE’s e-commerce industry is set to reach US$ 63.8 billion by 2023.

These trends are expected to continue even after the lockdown since people’s trust on ecommerce has increased. Online shopping will become a new normal. E-commerce is not just here to stay but grow.48% of consumers answered in affirmative when asked if they would continue their current shopping behavior after the pandemic. Although digital shopping is not going to replace the in-store shopping experience, with more and more people resorting to virtual shopping, ecommerce will continue to grow.

The COVID-19 has fundamentally changed the way we think, shop, and interact. Buying online is the new normal and will be so even after the lockdown has subsided. Post pandemic, when we think about buying, even though we have the ability to go to physical location, our first thought won’t be which brick and mortar store should I drive to, but rather which website should I buy that from?

This change in our shopping behavior will lead to ecommerce growth in the years to come. Other reasons why ecommerce businesses will surely stay and grow are:

Convenience: Online shopping offers absolute convenience as everything is delivered to your doorstep without you having to leave your room. Last year, convenience topped the list of reasons for online shopping.

Continued social distancing: Things might take a long time before they come back to normal. There is another spike in Coronavirus infections expected later this year. People’s continued focus on personal hygiene and social distancing will encourage them to opt for online shopping.

Greater Competition: As more and more sellers go digital, the competition is on the rise. They will do everything in their power to attract new customers and retain the existing ones through sales, referrals, subscription models, and price reduction.

Greater Competition: As more and more sellers go digital, the competition is on the rise. They will do everything in their power to attract new customers and retain the existing ones through sales, referrals, subscription models, and price reduction.

Summary:

The future is ecommerce, not only in Dubai but worldwide. It’s time for businesses to embrace the new normal and adapt to the changing trends. Only the companies that have the courage to take timely action will capture market share and emerge after the crisis as market leaders. Those who don’t will doom themselves to failure.