The ecommerce market is flourishing greatly in the MENA region, particularly the UAE, on account of major increases in startup deals, changing habits of consumers and swift economic recovery alike. Investors are now finding the best investments in UAE 2020 across varied sectors including real estate and also major startups in a variety of fields including ecommerce, technology and the like. Startup players have been able to successfully tide over the challenges posed by the coronavirus threat over the last 9 months or so and the recovery is visible through the peak threshold of $803 million that has been invested till now in MENA startup entities (2019 saw investments of $802 million).
These encouraging trends have been highlighted by the Khaleej Times which has featured multiple research reports and studies to this effect. The ease of doing business in Dubai is a major factor behind the growth of startups along with the pro-active approaches adopted by the Government.
Business opportunities in UAE 2020 flourish as per industry experts
The UAE comes first amidst COVID-19 by way of its share of 26% in all deals for this region and also for the capital invested. Ecommerce is the clear winner on top with 21% deal share this year, surpassing the Fintech sector. Together, both sectors have managed to garner a hefty 40% in overall deal share for the third quarter in the MENA region. The number of startup investments did come down by 50% for the third quarter in comparison to the second quarter although the first half of the year had a new record being set for capital deployment. Average deal sizes also went up by a sizable 34% and 91% for Series A and Series B investments as compared to last year.
Ecommerce is the biggest winner in the UAE, predicted to reach $27.08 billion within the next couple of years as per several studies and 92% of people have already changed buying habits due to COVID-19, preferring online shopping, as per an Ernst & Young study. Studies have also reported that footfalls have come down hugely at offline outlets, forcing retailers to switch to online platforms with 40% of people now buying more online in comparison to pre-COVID levels. Tanuj Shori, CEO and Founder at Square Yards, has opined that the startup environment is highly vibrant in the UAE and it has shaken off all hurdles during COVID-19 to rebound in style. In 2008, the tech sector was a huge winner after the market crash, when there was a large rebound. Similarly, according to Shori, in 2020-21, the Middle East region, spearheaded by the UAE, will be suitably placed for outstripping all other big startup markets, backed by fast economic recovery.
Several sectors including real estate, sustainable energy, automobiles and agriculture, have shifted towards a culture of innovation and technological adoption, covering aspects such as automation, thereby creating a genuine need for interaction, knowledge-sharing and network building amongst industry leaders, government bodies and innovators. The UAE has facilitated the creation of such a platform, bringing together leading technology entrepreneurs from across the world and helping them interact with innovators, potential investors and leading industry players. The UAE offers the suitable gateway for the MENA region’s best opportunities for doing business while offering quality infrastructure, manpower, diversified economic sectors and a business-friendly outlook as well. Local UAE businesses are cashing in on numerous startup benefits for expanding to fast-growing markets outside the region as well, while enjoying access to funding networks at a global level. Additionally, multiple global companies are now foraying into new locations and the MENA region will naturally be one of the biggest regions on their radar. Shori feels that foreign companies and startups who wish to expand in one of the world’s most profitable and strategically placed markets, should certainly consider the UAE.
Square Yards is a technology-enabled, global real estate aggregator and India’s largest player for primary residential real estate. It’s subsidiary Square Capital is one of the largest marketplace for secured mortgages in India. Square Yards platform offers an integrated consumer experience & covers the full real-estate journey from search, discovery to research, transactions, home loans and post-sales service – fully integrating buyers to an extensive network of 500+ partner real estate developers, and 90+ banks & NBFCs. Square Yards is led by accomplished professionals, ex-bankers, and Ivy school alumni and is backed by the competence of more than 2500 employees in 30 cities and ten countries.