DUBAI: The UAE’s consumer spending increased by 17 percent between February and March, a new study has revealed, raising hopes that the retail economy is on track to make a full recovery
Emirati e-commerce has doubled its 2019 level. By February, e-commerce spending increased by 30 percent year-on-year.
The study is the first in a series of quarterly reports launched by Majid Al-Futtaim, the leading shopping mall, communities, retail, and leisure pioneer across the Middle East, Africa, and Asia.
Data from the report series titled “State of the UAE Retail Economy” showed that consumer business in the UAE dropped only by 12 percent compared to the 22 percent decline seen by the wider economy due to the coronavirus disease (COVID-19) pandemic.
According to the International Monetary Fund, the UAE’s overall economy is expected to grow by 3.1 percent in 2021.
The country’s central bank also sees economic activity picking up during 2021 by 25 percent and expects a full recovery in 2022, with overall real gross domestic product reaching 3.5 percent.
“In 2020, we experienced a rapid shift from established consumer patterns to the need for emerging innovation like e-commerce, to meet consumers’ changing needs,” said Alain Bejjani, CEO at Majid Al-Futtaim.
Bejjani said he is confident that the promising signs seen during the first few months of 2021 will continue to drive a positive outlook on economic recovery.
The report indicates a rise in tourist spending in the first quarter of 2021 with a notable increase in fashion and accessories (91 percent), watches and jewelry (207 percent), and electronics (90 percent) compared to Q1 2019.
The report added digital shopping has become established alongside physical shops, heralding the arrival of the “phygital” age.
The data also suggests that sustainability is a focus for consumers in the UAE, with more than two-thirds (66 percent) showing concern for the environment and half now more likely to buy products that are kinder to the planet.
A quarter of the country’s electronic sales, up to 9 percent of fashion purchases, and up to 8 percent of grocery sales now take place online in the UAE.
“Looking ahead, we continue to see an acceleration in consumer expectations toward omnichannel experiences, as digital and technology solutions become further integrated into everyday life. We also look forward to seeing further recovery in tourism-related sectors, bolstered by the opening of EXPO2020 later this year,” Bejjani said.
