São Paulo – The surge in growth in the e-commerce sector in the United Arab Emirates has seen increased demand for warehousing space in Dubai, one of the main emirates in the country, global consultancy firm Deloitte said in a report.
“Growth in the e-commerce segment has increased the requirement for storage and fulfilment centers, boosting the demand for warehouses,” the consultancy firm said, as Saudi newspaper Arab News reported it its website on Tuesday (2).
The report said the arrival of online retail giants such as multinational Amazon and Saudi Arabia’s Noon has seen increased demand for same-delivery options from customers. Deloitte predicts that this will create a need for local delivery hubs close to major residential and business districts.
While demand is growing, warehouse rents are lower than in 2019 due to the constrained business environment. Deloitte observed that a number of small and medium enterprises are now seeking annual lease contracts. Prior to COVID-19, landlords were able to demand three- or five-year contracts.
According to website Statista, revenue in the e-commerce sector is projected to reach USD7.5 billion in 2021 in the UAE and grow at a compound annual rate of 10.3% to reach USD11 billion by 2025.
A survey by payment company Visa and Dubai Economy found that 49% of respondents in the UAE said they have been shopping more online during the pandemic.
Consumers in the Arab country have an annual spend per online shopper at USD1,648, and UAE online shoppers spend an average of USD122 per transaction, compared to USD76 in mature markets and USD22 in emerging markets.
Translated by Guilherme Miranda
