Wondering what’s happening with the ecommerce industry UAE this year? As of May 2025, the ecommerce and digital trade industry in Dubai and the wider UAE continues to experience significant growth, positioning itself as a central pillar of the region’s economic future. Driven by proactive governmental initiatives, robust infrastructure, and strong consumer adoption, the UAE’s digital economy is projected to surpass $9 billion in ecommerce revenues by the end of this year, reflecting its integral role in the national economic diversification strategy.
Market Size and Growth Trends
Currently, the UAE’s ecommerce market, valued at approximately $8 billion in early 2025, is expected to reach around $9 billion by the close of the year.
Recent industry studies suggest that online retail sales could even exceed this, hitting approximately $17 billion by the end of 2025. This dramatic growth is fuelled by nearly universal internet penetration, widespread smartphone use, and increasing consumer preference for convenience-driven online shopping.
Mobile commerce continues to be a significant driver, with over 70% of online transactions now completed via smartphones. Social commerce has seen remarkable expansion, with revenues projected to achieve $3.73 billion this year.
Quick commerce, offering ultra-fast deliveries, remains rapidly growing, with revenues forecasted at approximately $162 million by the end of 2025.
Key Industry Segments
B2C Ecommerce
Business-to-consumer (B2C) ecommerce remains the dominant segment, led by retail giants Amazon.ae and Noon.com. Amazon, following its acquisition of Souq.com in 2017, maintains its market-leading position with over 21 million monthly visitors, while Noon continues to expand, holding a strong market presence in the UAE and Saudi Arabia.
Niche ecommerce platforms such as Mumzworld and Namshi continue to experience significant sector-specific successes, reflecting ongoing consumer appetite for specialised online retail services.
B2B Digital Trade
B2B digital trade remains on an upward trajectory. Tradeling, a government-backed B2B ecommerce platform, consistently reports impressive month-on-month revenue growth, currently around 35%. With over 80% of UAE companies planning to increase their use of digital trade solutions, the B2B sector presents substantial ongoing opportunities.
Dropshipping and Digital Services
Dropshipping and reselling via global platforms remain popular due to low barriers to entry and manageable startup costs. Digital goods and services continue to flourish, with UAE digital service exports already surpassing $48 billion in early 2025. Successful startups such as Careem, Kitopi, and Anghami highlight the region’s ongoing digital trade prowess, further solidifying its global position.
Infrastructure and Government Initiatives
Dubai CommerCity, the region’s first dedicated ecommerce free zone, continues to exemplify the UAE’s strategic commitment to digital commerce. Offering comprehensive business setup packages, warehousing, logistics, and marketing support, it has significantly simplified the entry and operational processes for online businesses.
Digital payment infrastructures have seen considerable enhancements, with digital payment methods steadily replacing traditional cash-on-delivery transactions. Government initiatives towards a cashless economy continue to drive fintech growth, with Buy Now Pay Later (BNPL) services already used by over 40% of UAE consumers.
Logistics infrastructure remains robust and sophisticated, supported by major investments from ecommerce giants Amazon and Noon, both expanding their warehousing and delivery capacities. Amazon notably launched a substantial 175,000 sqm fulfilment centre in Abu Dhabi in late 2022, bolstering its operational capabilities.
Regulatory Environment
The regulatory framework continues to evolve significantly, supporting growth and consumer protection. The Federal Decree-Law No. 14 of 2023 provides clear online trade regulations, requiring comprehensive licensing and adherence to consumer protection and cybersecurity standards. Ecommerce entities must comply with stringent data protection laws introduced in 2022, enhancing consumer trust.
Taxation also influences digital trade significantly. The introduction of a 9% corporate tax in mid-2023 affects businesses earning above $102,000 annually, though free zones offer attractive exemptions and incentives, helping maintain the UAE’s competitive position.
Access to Global Markets
The UAE maintains its position as a strategic hub connecting local businesses to global marketplaces. Initiatives such as Dubai CommerCity’s partnership with eBay facilitate seamless access to international markets. Recent Comprehensive Economic Partnership Agreements (CEPAs) with major trade partners, including India, Israel, and Turkey, further streamline cross-border ecommerce, removing tariff barriers and simplifying customs processes.
Key Players In The UAE
Several UAE-founded ecommerce companies have emerged as prominent players in Dubai’s digital trade landscape:
Noon.com
A major B2C marketplace launched in 2017, Noon commands significant market share with approximately $1.37 billion in GMV by 2026. With over 4 million daily users and an extensive product catalogue, Noon has expanded rapidly, notably acquiring Namshi in 2022.
Namshi.com
Leading fashion and lifestyle ecommerce platform with revenue reaching around $586 million by 2024. Namshi boasts over 4 million monthly active users, holding the top position in UAE online fashion.
Ounass.com
Specialises in luxury fashion and accessories, reporting around 35% annual growth and approximately 4 million monthly active users. Ounass has a high average order value of about $550.
Mumzworld
The largest mother, baby, and child ecommerce retailer in MENA, experiencing tenfold growth over five years, building a community of 2.5 million mothers.
Desertcart
Focused on cross-border ecommerce, Desertcart connects UAE consumers to over 100 million global products and serves over 11 million customers worldwide.
Cartlow
Specialises in refurbished electronics and reverse logistics, achieving significant environmental impact by saving 10 million tons of e-waste. It has handled over 25 million returned or refurbished units.
Tradeling
Dominant B2B ecommerce platform in MENA, reporting a 35% month-on-month revenue growth, connecting over 126,000 registered buyers and sellers.
InstaShop
A pioneer in quick commerce, InstaShop achieved a GMV of approximately $631 million in 2024, growing rapidly post-acquisition by Delivery Hero.
These companies illustrate the vibrancy and diversity of the UAE’s ecommerce sector, underscoring significant entrepreneurial opportunities.
Entrepreneurial Opportunities and Challenges
Dubai’s digital infrastructure and supportive regulatory environment continue to offer substantial opportunities for entrepreneurs. The availability of specialised licences, comprehensive startup incubators, and attractive visa schemes, including Golden Visas for entrepreneurs and digital professionals, enhance the region’s appeal.
However, the market remains highly competitive, dominated by established giants, and marked by high customer acquisition costs and demanding consumer expectations. Businesses must strategically differentiate themselves through unique offerings, superior service quality, and niche targeting to thrive.
Future Outlook
The UAE’s ecommerce and digital trade landscape is set for continued robust growth, driven by government strategies like the UAE Digital Economy Strategy and Dubai Economic Agenda (D33). Investments in advanced technologies, sustainability initiatives, and infrastructure expansions, including the Etihad Rail network, promise further efficiency and growth.
Looking ahead, the digital trade sector is anticipated to become an even larger proportion of national GDP, reinforcing the UAE’s status as a global digital trade hub. Entrepreneurs entering this dynamic market must leverage robust infrastructure, proactive regulatory frameworks, and consumer readiness to capitalise on growth potential and successfully navigate the evolving digital economy. Reach out to us today at Virtuzone for more information.
