United Arab Emirates flag United Arab Emirates: Buying and Selling

The distribution network in the United Arab Emirates

Evolution of the Sector
The UAE remains one of the most attractive market in the region for retailers, behind Saudi Arabia. UAE retail market was valued at USD 22 billion in 2020 (+14.4% compared to 2019), with grocery sales making up 44.2% of retail sales, at USD 9.7 billion (USDA). The sector is growing due to various factors such as rising per capita income, growing tourism industry, increasing expatriate population. According to Majid Al Futtaim, consumer spending increased by 14% in Q1 2022 compared to the same period in 2019, as the economy continued to recover from the Covid-19 pandemic.

The country remains very attractive to retailers as 87.5% of the population lives in urban centres (Data Reportal, 2022). UAE has a high penetration of supermarkets and hypermarkets due to high rate of urbanization. When it comes to modern grocer retailing, omnichannel (online and offline purchase) is becoming a growing trend. The UAE is the most advanced eCommerce market in the Middle East and North Africa (MENA) region and the sector is booming. Over 95% of purchases are predicted to be made online by 2040. Retail e-commerce is projected to grow 60% to more than USD 8 billion by 2025 from 2021 (EZDubai and Euromonitor). Online retail spending tripled in the Q1 2022 compared with the first three months of 2019, led by the food and beverage
and hypermarket/supermarket sectors (Majid Al Futtaim).

A number of selling methods are possible in the Emirates; direct sales are not very widespread. The most common way is to market products through local commercial agents. Many firms will choose a different distributor or commercial agent in each emirate. Imports and exports of food products have typically been entrusted to companies specialising in this field. However, the Government has recently abolished the monopoly of agents, and has proceeded to open up this sector. Finally, companies tend to make use of the geographic position of Dubai as a regional hub for stocking their goods before re-exporting them to other markets, e.g. India or Iran. Moreover, the use of franchising is rapidly expanding.
Market share
Supermarkets have the largest market share of sales in UAE. These are followed by wholesale sales, shopping malls, trade fairs and exhibitions and, lastly, specialist shops. Major retail groups in the UAE include: Carrefour, Lulu Group, Union Co-operative Society, Abu Dhabi Cooperative Society and Sharjah Cooperative Society (USDA).
Retail Sector Organisations
Dubai Chamber of Commerce and Industry

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Latest Update: April 2024

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