Hyper growth in MENA’s digital economy is expected to continue for the foreseeable future with growth expected in the GCC, according to a new report released by Tradeling, a business-to-business (B2B) marketplace in MENA. The study shows the UAE’s e-commerce sector is poised to make major contributions via its high internet penetration rate of more than 90%, a growing smartphone user base, and an increasing demand for online shopping; consumers have grown to prefer such convenience over traditional brick-and-mortar stores since the outbreak of COVID. Favorable government policies are also supporting the country’s e-commerce rise.
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The UAE government has implemented several initiatives to promote entrepreneurship and innovation in the country’s e-commerce space while also developing frameworks that protect consumers and businesses; this includes regulating payment systems and establishing dispute resolution mechanisms among other efforts. As a result, MENA’s digital economy is rapidly gaining ground on emerging markets like Indonesia and India which are respectively valued at around $70 billion and $135 billion.
Out of necessity, increased worldwide digital adoption was witnessed at the onset of the pandemic. Despite the World Health Organization (WHO) declassifying COVID-19 as a global emergency, MENA is projected to maintain its upward trajectory by adding approximately 100 million new digital service users over the next five years. This progress is predicted to see as many as 125 million new digital users by 2030 while boosting the region’s digital economy from its $100 billion value in 2022 to an eye-popping $500 billion by the end of the decade.
Additionally, the paper highlighted that the pandemic-induced trend of digital adoption across several industries is set to continue with a relatively young and technologically inclined population driving this projection. The region’s median age of 26 for its younger population is reported to be significantly lower than the global average, and this is forecasted to boost e-commerce spending by 15% in 2023 when compared to the previous year.
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