Future of Retail Store Business in the UAE

by Zaara 14, Feb 2022

The experience has been entirely understood by anyone who has spent time visiting the retail stores in Dubai and UAE. For several years, the vastness of the malls has been spoiling consumers for alternatives. For the last 20 years, the renowned Dubai shopping festival has attracted travellers as the "Mecca for a big bargain," and such is the phenomenon that it has become one of the most sought-after shopping festivals in the world.

With only ten malls and 2600 participating stores, the Dubai shopping festival began in 1996. Today, with 6000+ retail outlets, it has more than 70 shopping malls. Dubai has drawn 56 million tourists since 1996 and has contributed at least DH 145 billion to the economy of Dubai.

The shopping festival, which runs annually from January to February, has an average of 4.4 million visitors, with a total expenditure of DH 15 billion.

Dubai hosts several shopping festivals all year round. So it is not that the retail shops are busy throughout these two months, they are engaged throughout the year. Based on the 2015 edition of "How Worldwide is the Retail Business?" Dubai has 55.7% of the world's retailers, led by Shanghai with 53.4%.

Overview of the Retail Sector in the UAE

With thousands of square feet of retail space, Dubai has made excellent use of its resources to attract tourists from around the world. The UAE is frequently praised as the queen of "Shopping Malls" and has been called the world's second most significant market. For Dubai's economy, retail is undoubtedly a cash cow.

Over the past two decades, Dubai retail has seen a significant transformation. It is perceived to be a joint effort by the private and government institutions by the proponents of DSF. The UAE is the largest GCC and the world's largest dealer. According to a business advisor, if Dubai continues the momentum of its retail growth, this position has not altered much and will continue to hold. It is also a very significant market for the world's largest brands and a launchpad for the newest brands. UAE retailing is projected at DH200 billion by 2017.

All these are potent signs that for the majority of brands looking to enter the area for the first time, it remains a consistent destination of choice.

The Overview of E-commerce in the UAE

One of the critical growth stories in the UAE region relates to eCommerce. In the last decade, several folds have risen in online trade. Taking instances from the rise of Souk.com and Namshi fashion portal, one million+ demand from across the Mena region reported. In general, shopping online saves time, access to great prices, diversity, and privacy.

However, online shopping accounts for less than 2% of Dubai's overall retail sales by volume, which is considerably lower than that of the US and European markets. E-commerce is the biggest challenge, as well as the most significant opportunity when we look at Dubai's market. As distributors seek growth, it becomes essential to minimise expenses and choose an efficient medium. Thus, for manufacturers, e-commerce is an incredibly successful medium.

Electronics Sector

Dubai also has electronics of high quality at competitive prices. Being a tax-free state is a benefit for residents and tourists to get the best electronics offers. In this area, products are cost-effective because they are the marketplace or supplier for East Africa and the European region, and no tax also adds to the retailers' advantage. Areas in Al Deira- Bur Dubai have a range of electronics stores and a significant tourist attraction. Online shopping today has also ventured into the selling of electronics. JadoPado is one such e-tailer that has gained the attention of consumers and has attracted the interest of investors.

Analyse/ Observe

The study from AT Kearney indicates that the UAE is an attractive and low-risk business choice for retailers.

A significant sector is a retail and wholesale trade in the UAE. The Chamber of Commerce of Dubai points out that the UAE is cementing its position as a retail hub and is on the road of growth. In the GCC nations, a lot of retail space is available, and many projects are underway. Foreign players are rising their presence, and current distributors are also growing. So far, the region has been immune to declining oil prices.

Some of the positive trends that have led to the growth of retail sales in the GCC region include economic development, ongoing diversification, and an increasing population, especially among high-worth individuals.

It is preferable to have a digital and off-line presence to get the best experience.

So if you are a foreign brand or an emerging leader in the store outlets and are looking for business set-up consulting, please contact us today.


What license is required to start a retail sector in the UAE?

A general trade license must be obtained.

What is the estimated growth for retail e-commerce market value?

The growth is expected to reach USD 8 billion by 2025.

By how much did the UAE retail market 2021 grow?

 The growth was 4.5% in terms of consumer spending.

What was the percentage growth for online shopping spending in 2021?

 The spending increased by 104%.

How much growth was observed in the card transactions?

The share of card transactions increased by 53% in 2021 as compared to 40% in 2019.