The report showed that e-commerce spending continued growing in 2023, with a 15 per cent growth rate since 2022
The UAE’s retail sector boomed in 2023, defying global trends, revealed the latest State of the UAE Retail Economy report released by regional retail giant Majid Al Futtaim.
The report, which highlights key economic data, trends and insights into consumers’ behaviour patterns, highlighted that the UAE’s economy witnessed a 3 per cent GDP growth, driven by strong performances in non-oil sectors.
Inflation stayed below the global average (at 6.9 per cent) and considerably lower than the Middle East average (at 13.9 per cent). the report shared.
Ahmed Galal Ismail, CEO at Majid Al Futtaim – Holding, said: “Over the past 12 months, its proven resilience to external pressures, coupled with progressive policy-making and an investor-friendly business environment has seen the UAE further strengthen its position as a lighthouse for the MENA region.
“The nation’s ability to act as a magnet for global talent, investors and entrepreneurs, has translated to a record number of visitors, far surpassing pre-Covid levels, fuelling consumer confidence and further contributing to its thriving retail sector.”
State of the UAE Retail Economy report: Key highlights
Consumer spending in the retail sector saw a notable uptick of 13 per cent in 2023 compared to the previous year, showcasing sustained economic activity. While there was a temporary slowdown in the latter half of the year, attributed to a high base effect from the FIFA World Cup in 2022, overall spending remained evenly distributed across the year, according to the report.
Segments that saw positive growth included fashion (31 per cent rise), general retail (16 cent rise), and leisure and entertainment (15 cent rise).
The UAE’s e-commerce landscape witnessed exponential growth, with penetration doubling since 2019. This surge accounted for a 15 per cent increase in consumer spending in 2023, with around 70 per cent of transactions attributed to mobile phones.
The retailer’s point of sales (POS) data also showed a 15 per cent growth in e-commerce consumer spending in the UAE retail economy in 2023.
The rise in e-commerce spend was driven by growth in consumer spending in hypermarkets and supermarkets (19 per cent), and retail general categories such as F&B (57 per cent), electronics (271 per cent), and hotels (10 per cent).
The UAE’s travel and tourism sectors experienced a significant rebound in 2023, surpassing pre-pandemic levels. Notably, Dubai emerged as a magnet for international visitors, hosting 17.2 million overnight guests.
Hotel occupancy records hit a record high of 77 per cent in 2023, up from 73 per cent in 2022.
The report revealed that 53 per cent of international visitors came from Western Europe, South Asia, and the GCC, with a rise in the number of Chinese visitors, which rose by 287 per cent compared to the previous year.
The country’s property sector was also a strong performer with record-breaking real estate sales volumes and values, particularly in Dubai, which saw property prices grow 20 per cent in 2023.
Transactions were up 18 per cent over the previous year, with sales values increasing by 39 per cent to Dhs370bn in 2023.
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