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Dubai retail sector is projected to record a compound annual growth rate of 5.2% over the 2018-2023 period, supported by strong international visitor spend, robust demand fueled by a high frequency of mega-sales and shopping festivals, and growing e-commerce activity, according to new analysis conducted by Dubai Chamber of Commerce and Industry.

The analysis, based on recent data from Euromonitor International, was released ahead of The Retail Summit 2019 in Dubai, an international forum which is being organized under the patronage of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, in partnership with Dubai Chamber and Meydan One.

Other key factors that are expected to fuel the growth of Dubai retail sector in the medium term include the growing popularity of traditional and app-based delivery services, sector expansion ahead of Expo 2020 and an increasing number of tourists from China, Russia and other top source markets following recent decisions to ease visa restrictions.

According to the analysis, Dubai retail sector generated an estimated AED 142 billion in sales during 2018, marking a growth rate of 6.8%. Store-based retailing continues to dominate sales, accounting for a market share of 95%, while e-commerce continues to grow rapidly, with 19% y-o-y growth and AED 5.5 billion worth of sales recorded in this segment.

Key drivers of e-commerce activity in Dubai include strong government support in line with its commitment to transform Dubai into the world’s smartest city, and a high mobile penetration rate, along with Dubai’s expanding logistics networks.

Furthermore, despite the implementation of VAT, many hypermarkets have managed to keep their prices competitive which have helped offset such costs. Meanwhile, smaller retailers, such as convenience stores, have continued attracting consumers by enhancing their customer service with extended opening hours and delivery services.

Dubai’s grocery retailers generated an estimated AED 47.1 billion in sales in 2018, the analysis reveals, while apparel and footwear specialist retailers saw an estimated AED 26.9 billion in sales during 2018, realizing y-o-y growth of 3%. Dubai’s health and beauty specialist retailers finished 2018 on a strong note, generating an estimated AED 14.7 billion in sales and realizing a 9% growth y-o-y.


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