UAE e-commerce sector thriving during pandemic: Euromonitor study

E-retail companies in the UAE have succeeded despite the challenges of high demand due to the spread of Coronavirus (Covid-19) and disruption of supply chain worldwide, said the Dubai Chamber of Commerce and Industry in a new report.

The companies have managed to achieve benefits beyond the domestic market to include neighbouring markets as well, said the analysis, based on updated data from Euromonitor.

The report attributed this success to the fact that it was due to the support of government initiatives, the presence of modern infrastructure, and a strong logistical sector, which was reflected in the resilience of e-commerce in the UAE.

The analysis reviewed the percentage of goods that are not in stock in 38 major economies around the world, and monitored the levels of inventory for the major e-commerce platforms, and the daily percentage of stock keeping units (SKUs) that were marked as goods not available on the retailer websites for each country.

The UAE occupies an advanced position globally, due to the UAE’s pivotal position in the global trade map, its large storage capacity and its extensive logistical networks which contributed to record low percentages of materials that were out of stock before the outbreak of the epidemic (3.4% on January 21), the report said.

The country’s position further advanced after the outbreak of the epidemic, as unified exceptional measures taken by the government, logistical support companies and commercial companies helped to ensure the continuous flow of necessary materials during the emerging pandemic, and this resulted in a decrease of this percentage to 1.8% by April 21, which made the UAE occupy sixth position in the world, surpassing many developed economies.

The benefits of the UAE’s strong logistics and warehousing sector extend beyond the domestic market to neighbouring markets, for example, Saudi Arabia, which has a similar low rate of 2.2%, given that the Kingdom is the top regional trading partner for the UAE.

The emerging market economies in general recorded a low percentage of the basic materials that ran out of stock because most of their products are obtained locally, while the developed markets have more sophisticated supply chains as a large part of their products are brought in from abroad, in order to take advantage of the low production costs. This explains why the great impact of the emerging epidemic is more evident in e-commerce supply chains in Europe and North America.

India is an exceptional case among emerging market economies, and this is already reflected in its record of a high percentage of commodities that have run out of stock even before the outbreak of the epidemic. This could indicate the existence of challenges facing the e-commerce environment where it is hampered by the lack of advanced infrastructure, which is a key factor to facilitate the flow of goods.

According to the availability schedule of products in the Emirates, stocks of low-life products, such as fresh food, are always refilled with a rate of products not available in stock at zero or close to zero for basic materials such as eggs, poultry, starchy roots and vegetables.