The UAE recorded an increase in online consumer spending primarily driven by a 21% jump in the number of online platform, as the world witnessed an exponential boom in retail e-commerce with an additional USD 900 billion being spent in 2020.
Shipa, the digital logistics and e-commerce arm of Agility, has recently opened two state-of-the-art e-commerce fulfilment centres in Dubai to manage online purchases and deliver to customers in the UAE, Saudi Arabia, Kuwait, Qatar and Bahrain.
Boksha, an Emirati-founded e-commerce platform selling Khaleeji-themed fashion items, has raised $1 million in early-stage funding. The startup will use the fund to improve its operations, and invest in technology to further expand across the Gulf and the wider Middle East.
Way Forward for E-Commerce in UAE: In the past few years, the UAE has managed to position itself as one of the fastest-growing e-commerce markets in the world. It is currently the most advanced e-commerce market in the Middle East and North Africa, revealing an estimated annual growth of ~17% between 2020 and 2025. While customers continue to enjoy the 'destination shopping' aspect of visiting a physical store, COVID-19 has encouraged many people to try e-commerce for the first time. This jump in online users is not expected to reduce. The country has transformed into a digital hub providing access to high-speed internet to its citizens. This along with other factors has led to a rise in the popularity of online shopping. From business-friendly laws and regulations to a rise in the popularity of online shopping culture, a variety of factors would continue to drive the rapid growth of e-commerce in the area.
Promoting E-Commerce Logistics Development in UAE: Opening up of logistics hubs along with the introduction of new web technologies in last mile logistics would provide the much needed boost to the shipping companies as well as the consumers. The growth of e-commerce logistics companies will highly depend on their last mile delivery model. Mobile Depots are expected to make urban deliveries faster as where in mobile depots will carry parcels of the day from the fulfilment centers to the city centre for last mile delivery. New models for handling the last mile such as "click and collect" locations are further anticipated to drive the growth of E-commerce logistics. Moreover, local retailers are expected to increase their presence in the e-commerce segment and would partner with an e-commerce logistics company to deliver the products. Companies would focus more on technology upgradation such as GPS Monitored Robots, Drones, Inbuilt RFID, GPS, IoT, telematics for better inventory management.
Long Term Positive Impact of Covid-19: The sudden onset of the pandemic has essentially interrupted and unsettled social and economic activities worldwide. Despite the slump faced by the commercial sector at the onset of the pandemic, long stretches of progress have occurred recently with the offline market moving to the web. This growth can be mainly attributed to the increased demand for quick, comfortable, and speedy delivery of products and services. 49% customers are shopping more online since the start of pandemic with high share of spends attributable to Groceries, Retail Goods, Apparels, and Electronics etc. Online retailers have seen a huge decrease in cash on delivery (COD) orders, and a remarkable expansion in digitally paid orders. The abrupt flood in the utilization of online businesses resulted in a demand to upscale the existing logistics networks. Businesses were increasingly reliant on advanced logistical networks with the demand for competent delivery partners increasing by 60% during the first 3 to 4 months of COVID-19. Logistics companies are likely to invest more on technologies such as AI to derive information and insights, such as delivery packaging, weight, and the like from images, detect anomalies, perform quality assurance checks, or build delivery schedules.
The Filipino E-commerce industry has witnessed a moderate rise over the past 5-6 years with an increase in internet penetration into the country. Escalation in the number of smartphones in the country, fast-growing middle-class population, high consumer confidence, changing consumer preferences, etc. has augmented the growth of e-commerce leading to surging demand for e-commerce logistics as well in the country. Manila and some other cities including Central Quezon City, Cebu, and Davao have emerged as the key hub for demand and supply of e-commerce logistics The COVID-19 pandemic has also pushed the demand in the market as the need for social distancing have forced people to rely on online shopping. The growth in E-commerce orders for logistics has been majorly driven by an increase in internet affinity and demand for value-added services.
The industry is dominated by Sea and land freight Movements considering its huge import and Exports with Asian countries such as China and India. The country has strong trade relations with Australia, European countries, US, and neighboring South East Asian countries such as Thailand and Vietnam. No international freight is by Land due to its geographical limits. Airfreight is quite expensive than any other Mode and is usually used for Express Shipments. Indonesia also has a strong warehousing market segment with huge space catered by warehousing players and renting out at quite high rates. Warehouses are concentrated in areas of Greater Jakarta, Surabaya and Makassar due to high population and presence of Seaports. The Courier, Express, and Parcel market is driven by growth in Last-Mile deliveries and the E-Commerce segment in the country.
Turkey logistics and warehousing market displayed a consistent growth during the period 2013 to 2018. The growth in the automotive exports coupled with rising e-commerce sector was witnessed to drive the Turkey logistics market. The country also has a robust manufacturing sector that contributes to almost 25% of the country's GDP and provides the boost to the logistics industry in Turkey. In addition to this, the implementation of Vision 2023 and Logistics Master Plan 2023 by the government also indicates a positive outlook for the industry. The market has increased owing to high domestic consumption and the efforts of government to boost infrastructure. The investments in infrastructure and technology have impacted Turkey logistics market positively.
In 2011 Myanmar's economy opened up to the rest of the world. Foreign investment has since then been steadily coming in, reaching USD 7.5 billion in 2018, 13% growth since 2013. International companies are looking at Myanmar as a potential growth market. One of the lucrative factors for investing in Myanmar is the abundant supply of natural resources and one of the cheapest labor costs in Asia. However, there has been underinvestment in Myanmar with respect to the transportation sector, with merely 5% of government expenditure going towards the Transport and Communications sector even though Transportation services contribute 11.2% to the GDP. More than 80% of enterprises in Transportation and Storage Sector in Myanmar are operating with only 0-9 workers. This suggests that the market is majorly unorganized.
Logistics is vital for the economic performance of any economy. Nigeria has poor infrastructure and logistical issues along with delayed custom procedures and congestion on the roads. It is an import based country and the economy is dependent on the export of crude oil. Nigeria was ranked 145 out of 190 economies in 2018 in ease of doing business Index and ranks 112 in the Logistics Performance Index (2018). The growth in Nigeria logistics Market has been due to the Infrastructural developments in Railways and Airways, improvement in foreign ties with other countries and the rising e commerce sector.