UAE’s E-Commerce Growth Accelerated Across FMCG and T&D Sectors
The UAE’s e-commerce sector has seen tremendous growth, particularly in the fast-moving consumer goods (FMCG) and technology and durables (T&D) industries. According to NielsenIQ, FMCG e-commerce grew by 29% in 2024, reflecting the increasing reliance on digital shopping platforms. The T&D sector also saw strong online sales, with more than 25% of total revenue coming from digital channels. This shift is fueled by improved logistics, secure digital payment options, and attractive online discounts, making e-commerce more accessible and appealing to consumers. Retailers are actively expanding their digital presence, offering competitive pricing, and introducing customer-friendly return policies to cater to the growing online demand.
UAE Consumers Prioritize Quality Over Price
A key trend emerging in the UAE is the consumer focus on quality. In 2024, 72% of shoppers in the country stated they would be willing to pay more for high-quality products, emphasizing a shift in purchasing behavior. This trend is especially visible in the T&D market, where flagship smartphones, premium computing devices, and high-end home appliances continue to be top choices for buyers.
However, while premium products are in demand, many consumers still look for cost-effective deals. As a result, retailers are adopting hybrid strategies—offering both high-end luxury items and budget-friendly alternatives, along with installment plans, loyalty rewards, and exclusive online discounts to cater to all consumer segments.
Saudi Arabia’s E-Commerce Growth Surpasses UAE
While the UAE has experienced significant e-commerce growth, Saudi Arabia has outpaced it in the FMCG sector, with an impressive 46% growth in 2024. Saudi consumers, traditionally reliant on organized retail stores, are becoming increasingly comfortable shopping online, thanks to improved digital platforms and faster delivery services.
Despite this shift, physical retail remains important, with organized retail still the dominant shopping channel in both Saudi Arabia and the UAE. However, an increasing number of consumers in both markets are exploring alternative shopping channels for better pricing and product availability.
Traditional Retail Remains Strong in the UAE
Despite the rapid rise of e-commerce, traditional brick-and-mortar retail continues to play a crucial role in the UAE. Independent retail stores in the country saw nearly 10% growth in 2024, highlighting the continued importance of in-person shopping experiences. Similarly, in Saudi Arabia, small independent stores contribute 25% of the country’s total retail revenues and have maintained stable growth at 1.7%.
The preference for physical retail is particularly evident in segments such as groceries, luxury fashion, and high-end electronics, where consumers prefer to see and experience products before making a purchase. Many retailers have adapted to this trend by integrating online and offline experiences, offering services like in-store pickup for online orders and hybrid shopping options.
Rise in Product Innovation and New Brand Entries
The UAE’s retail sector is witnessing a surge in new product introductions. In the FMCG industry, 1,090 new stock-keeping units (SKUs) were launched in 2024, averaging 90 new products per month. Similarly, the T&D industry experienced significant expansion, with 457 new brands entering the UAE market and 493 brands launching in Saudi Arabia. This high level of product innovation demonstrates the competitiveness of the market, as brands continuously release new products to attract consumers and stay ahead of shifting trends.
Premium and Budget Brands Compete for Market Share
A major shift in the UAE’s T&D sector is the competition between premium and entry-level brands. Premium brands accounted for 55% of total revenue in the UAE, reflecting a strong demand for high-end products. However, budget-friendly brands have also gained traction, recording over 10% year-on-year growth in both the UAE and Saudi Arabia.
This trend highlights the evolving purchasing habits of consumers, who are increasingly balancing their desire for high-quality products with cost-conscious decision-making. To cater to this demand, brands and retailers are expanding their product portfolios, ensuring that consumers have access to both luxury and affordable options.
Market Outlook for 2025: Innovation and Consumer Adaptability
As the retail landscape in the UAE and Saudi Arabia continues to evolve, brands must focus on innovation and adaptability to stay competitive. According to NielsenIQ’s Andrey Dvoychenkov, Middle Eastern consumers are becoming more deliberate in their spending choices, emphasizing both quality and affordability.
Moving into 2025, success in the FMCG and T&D industries will depend on how well brands understand shifting consumer behaviors. Companies that invest in technology, personalized marketing, and seamless online-to-offline experiences will have a competitive edge in the rapidly growing retail market. The UAE’s e-commerce sector is expected to maintain its strong momentum, with digital sales playing an even bigger role in shaping the future of retail in the region.
