Be Like Amazon: Achieving a Competitive Advantage Based on Digital Footprint Analysis

Organization Background: Understanding The E-Commerce Market In Uae

According to Visa (2021), the eCommerce market in the United Arab Emirates (UAE) is on a path of visible growth, in comparison to other both emerging and mature economies. High internet penetration ratio (Internet World Stats, 2020), reaching 100%, along with eCommerce payments, driven mainly by government-initiated and education-driven transactions, make the country unique. But still in the long run UEA’s role among other big eCommerce players (like China, US, UK) is negligible. Comparing the retail eCommerce sales worldwide, predicted for 2021 by eMarketer (2019) as $4.93 trillion, eCommerce revenue brought locally, according to Statista (2021), the amount totaling to $7.456 million, which seems insignificant. However, one needs to understand that these numbers are generated by a society of 9.5 million inhabitants, with a 66% eCommerce adoption rate (We Are Social, 2021). Moreover, is not only the current status of the market, with expected CAGR of 10.30% for 2021-2025, (resulting in a projected market volume of $11,034million by 2025, with predominant component coming from the Fashion Industry, instead of leading now government-related transactions) and expected average revenue per user (ARPU) with an amount of $1,075.81 (Statista, 2021). Worth noting is as well the fact that for the same period predictions of Euromonitor International (2021) predict the Retail Value RSP in the UAE (2021-2025) for the eCommerce 15% and 18% for mobile eCommerce.

According to Fielding & Armstrong (2020) e-commerce in the UAE represents currently 4.2% of the retail revenue and is estimated to grow by an average of 23% by 2022. What is important, more and more visible becomes the transition from a characteristic offline shopping experience towards digital shopping, online self-service, and everyday e-commerce transactions. Previously preferred CoD (Cash on Delivery) is being replaced with credit card payments and wire transfers. The ease of digital payments starts to play an increasingly important role. This transition has not happened by coincidence but was triggered by pandemic circumstances and “hard lockdown” between March and June 2020, which visibly sped up the digital transformation. Moreover, the same approach was visible everywhere. According to McKinsey (2020), calculating the average share of digital customer interactions in comparison to all exchanges, globally the digital adoption accelerated by 3 years, being the most visible in the Asia-Pacific region, with an average of 4 years. Digitization of almost all industries in the Emirates was therefore inevitable and as per data of Emirates News Agency (2020) in the first five months of 2020, an increase of 300% in consumer demand for e-commerce services was recorded. Moreover, the DED Trader license in Dubai (which supports the growth of UAE e-commerce) noted 943 licenses were issued to new businesses in the first three months of 2020, leading to a 179% YoY increase in comparison to the same period in 2019. With a society willingly “embracing tomorrow and foreseeing the future”, the shift towards digital was obvious. Not only on the big scale – like digitization of processes, government transactions but impacted everyday life - work from home, grocery shopping and facilitated digital payments.