The Future of E-Commerce Business Setup in UAE

The Future of E-Commerce Business Setup in UAE

The Future of E-Commerce Business Setup in UAE

The United Arab Emirates is the GCC state that pioneered e-Commerce. Global B2CE E-Commerce Business Setup in UAE expenditure increased to $3.8 trillion in 2017. Emirates’ success in the e-commerce business is not solely due to the private sector. Building trust in online e-commerce has necessitated the implementation of e-government projects. In recent years, the process of implementing paper-based service providers such as utility billing/payments, traffic services, visas, licenses, and other government services has migrated to online channels in order to provide citizens and residents with government services more quickly and efficiently.

UAE E-commerce Sector

In the United Arab Emirates, the e-commerce sector is on the rise. In comparison to both emerging and developed economies, the government’s embrace of eCommerce payments on Dubai Smart City systems is driving this unique growth plan. Government payments dominate the E-Commerce Business Setup in UAE environment, despite strong growth in other areas such as fast service transportation and restaurants.

In the United Arab Emirates, 2019 has been dubbed “Internet Shopping Year.” As the local and international eCommerce markets gain traction, users may now get their hands on a wide selection of consumer goods and services, all available with a click, tap, or swipe. When it comes to e-commerce company operations, the country has done it all with the help of  Business Setup Consultants in UAE.

The UAE estimated $16 billion in eCommerce transactions in 2019, with an annual rise of 23% between 2018 and 2022.

Factors Affecting the Development of the UAE’s E-Commerce Industry

1. Increased Digital Inclusion

The expansion of e-commerce coincides with the UAE’s shift to a digital future. Mobile penetration has reached a world-record high of 210.9 percent, according to Visa’s research. Even UAE inhabitants rank among the top ten in the world when it comes to spending time online. Such interpretations have aided in the widespread adoption of digital technology.

2. The Use of Portable Wallets Is Increasing

The deep penetration of cell phones, which has been a fact in the UAE for years, is the baseline for mobile payment. Citizens can now pay with a quick tap of their smartwatch or smartphone in supermarkets, hotels, retail stores, gas stations, taxis, movies, and many other locations.

3. The Policies of the Government

The government’s pro-E-Commerce Business Setup in UAE policies have aided in the country’s digital transition and the removal of many of the barriers to becoming a cashless society. UAE Vision 2021 identifies digital commerce and cashless payments as major government priorities.

4. Going Cashless

At first look, the UAE appears to be a long way off, with 75% of all transactions still involving cash, yet the country has already set solid foundations for going totally digital. It is one of the fastest-moving regional economies in terms of shifting away from money.

5. Digital Shopping’s Possibilities are Expanding

On the virtual merchant side, the UAE has seen domestic and global expansion, with several online firms offering world-class in-app and mobile purchasing experiences.

Issues in the E-Commerce Industry

1. Overburdened logistics in the e-commerce industry

The region’s massive trade obstacles make it difficult to deliver goods via logistics and online shops. These barriers affect small e-commerce players because of high tariff rates, changing laws, and volatile currency exchange rates.

2. Payment Methods and Shipment Issues

In the United Arab Emirates, credit cards are not distributed. Due to a lack of trust in online payment systems and internet fraud, purchasers made 60-70 percent of their e-commerce transactions via the cash on delivery, according to an A.T. Kearney study.

3. The presence of VAT

The implementation of VAT in the UAE has also posed a challenge to the eCommerce sector. Because most online transactions are dispatched from outside the country, the tax will be applicable not just to products but also to services. Because the country’s corporate tax structure is new, businesses must have effective VAT enforcement procedures, which will result in greater expenses with the help of UAE Business Setup Consultants.

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