The State of E-commerce in the UAE in 2025: What Actually Happened

The UAE’s e-commerce sector continued its post-pandemic expansion through 2024 and into 2025, but at a slower and more grounded pace than many earlier forecasts suggested. The headline forecasts of USD 17 to 20 billion by 2025 that circulated in 2021 and 2022 reports did not materialise. Independent measurements published in 2025 and 2026 place the market at roughly USD 8.8 to USD 12.3 billion depending on methodology, still impressive growth, but a more sober picture than the optimistic mid-pandemic projections.

This retrospective covers what actually happened: how the UAE e-commerce market grew, which platforms gained ground, how payment behaviour shifted with the rise of buy now pay later, what new regulations took effect, and what UAE businesses should take from the period when planning their next move online.

1. UAE E-commerce Market Size: Forecast vs Actual

Multiple independent sources tracked the UAE e-commerce market through 2024 and 2025. The numbers vary based on what each report counts as “e-commerce” (retail-only versus retail plus services, B2C only versus B2C plus B2B, cross-border treatment), but they all paint the same picture: real, sustained growth, just lower than the most aggressive earlier forecasts.

The Euromonitor figure of USD 8.8 billion in 2024 (AED 32.3 billion), published via the official Emirates News Agency, captures retail-focused B2C e-commerce. Mordor Intelligence’s higher figure of USD 12.30 billion in 2026 includes a wider scope, covering B2B, B2C, and C2C transactions. Both confirm the UAE as MENA’s leading e-commerce market by GDP contribution, just at different scopes.

For context, the U.S. International Trade Administration documented in its UAE Country Commercial Guide that UAE e-commerce jumped 53% in 2020 to a record USD 3.9 billion as the pandemic accelerated digital adoption, with the Dubai Chamber of Commerce and Industry projecting USD 8 billion by 2025. The 2024 actual figure of USD 8.8 billion landed close to this Dubai Chamber forecast.

2. What Actually Drove Growth in 2024 and 2025

Growth in this period was not a story of one big shift, it was the compounding of several smaller ones.

📋 Mobile commerce became the default, not the alternative

According to Mordor Intelligence’s market analysis, smartphones processed 78.67% of all e-commerce transactions in 2025, with the segment forecast to expand at 16.24% CAGR through 2031. The EZDubai/Euromonitor research independently confirms this: more than 75% of online purchases in Dubai are completed on mobile.

This is not a small adjustment. It changes how you think about your store. A “mobile-friendly” desktop site (one that scales down) is no longer enough. Your primary design surface is a 6-inch screen, your primary checkout method is biometric authentication, and your primary speed budget is set by mobile networks, not office WiFi.

📋 Digital wallets crossed the 50% threshold

The shift to wallet-based payments accelerated significantly. Per the EZDubai/Euromonitor 2024 report, digital wallet usage rose from 41% in 2020 to 53% in 2024 of all online transactions. Mordor Intelligence’s 2025 measurement places digital wallets at 43.92% of payment value share (slightly different methodology, same direction of travel).

Names like e& money (Etisalat), PayIt, Apple Pay, and Google Pay now sit beside cards at most checkouts. The UAE Central Bank’s directive to retire SMS-based one-time passwords by March 2026 is accelerating this shift further, since wallets already use biometric authentication that meets the new standard.

📋 BNPL became mainstream, not niche

Buy now pay later was the breakout payment story of the period. According to the UAE BNPL Business Report 2024 cited by Khaleej Times, BNPL gross merchandise value in the UAE reached USD 2.45 billion in 2024, growing 18.5% year on year, and is forecast to grow at a CAGR of 11.2% through 2030.

The clearest signal of BNPL’s institutional acceptance came in February 2025, when Tabby announced a USD 160 million Series E at a USD 3.3 billion valuation. The official announcement confirmed Tabby had nearly doubled its annualised transaction volume to over USD 10 billion across the UAE, Saudi Arabia, and Kuwait, with more than 15 million registered users and over 40,000 sellers using the platform.

For UAE store operators, this changes the maths on average order value. BNPL options like Tabby, Tamara, Postpay, and Spotii visibly lift basket sizes for fashion, electronics, and furniture, and they are now table stakes at any meaningful UAE checkout. Customers expect to see the option, and they bounce when they do not find it.

📋 The marketplace landscape consolidated, then specialised

The duopoly of Amazon.ae and Noon.com remained the entry point for most UAE shoppers, but the picture became more nuanced through 2024 and 2025. Per Mordor’s analysis, Amazon.ae, Noon, and Carrefour UAE jointly controlled 45 to 50% of UAE e-commerce GMV in 2025. Around them, vertical specialists kept gaining ground: Namshi for fashion, Ounass for luxury (with average order values reportedly around USD 550), Sharaf DG for electronics, Mumzworld and FirstCry for parenting and kids, and Tradeling crossing USD 1 billion in annualised B2B GMV after a USD 100 million Series B.

Quick commerce was the most volatile sub-segment. Talabat’s USD 32 million acquisition of Instashop in March 2025 consolidated the 15-minute grocery space, prompting Noon Minutes and Careem Now to match the speed promise at considerable subsidy cost. Whether this is a sustainable economic model or a venture-funded race to the bottom remains an open question.

3. Regulatory Changes That Shaped the Period

2023 to 2025 brought meaningful regulatory clarity to UAE e-commerce, which removed friction for legitimate operators and added compliance overhead for everyone.

📋 Federal Decree-Law No. 14 of 2023

The most consequential change was Federal Decree by Law No. 14 of 2023 Concerning the Modern Technology-based Trade, which now governs e-commerce in the UAE. The law treats trade conducted through technology platforms (websites, apps, social media) on equal footing with traditional trade, sets specific criteria for digital traders (legal capacity, valid licenses, secure infrastructure, cybersecurity compliance), and establishes consumer protection rules including the obligation to provide detailed digital invoices.

For practical purposes, this means any UAE-licensed business selling online must maintain proper licensing, follow advertising rules, secure customer data, and be ready for audit. For UAE businesses, it formalises what was previously a patchwork of guidance.

📋 TDRA NoC for digital activity

All eTrade licences require approval from the Telecommunications and Digital Government Regulatory Authority (TDRA), which issues a No-Objection Certificate for practising digital activity. This is a prerequisite for selling online under your UAE license. We cover the full process in our guide on how to get a free TDRA NoC for your UAE e-business.

📋 BNPL regulation by the UAE Central Bank

In December 2023, the UAE Central Bank introduced new rules requiring BNPL operators to either operate as agents of licensed banks or financial institutions (with central bank approval), or to apply for restricted license finance company status themselves. This formalised the BNPL sector and added a barrier to entry for new operators, while protecting consumers from unregulated short-term credit.

4. Why Your Own Domain and Website Still Matter

Marketplaces remained the dominant entry point through 2024 and 2025, but the strategic case for owning your own domain and storefront grew rather than shrank. Five reasons stood out.

1. Brand identity that compounds. A domain purchase like yourbrand.ae signals legitimate UAE presence and professionalism. Customers remember the URL, not your seller-page slug on Amazon. Search engines associate your content with your domain, building authority that no marketplace shop ever does for you.
2. Full control of customer data. Marketplaces keep customer data behind their walls. Your own site lets you analyse user behaviour, customise product pages, run loyalty programs, send targeted email, and build the customer relationships that produce repeat purchases. Federal Decree-Law No. 14 of 2023 also makes proper data handling a compliance requirement, not just a nice-to-have — see our guide on how to secure your e-commerce website.
3. Margin retention. Marketplace fees range from 5% to 20% depending on category and program tier. On a USD 100 product, that is USD 5 to USD 20 you keep when the same customer buys directly from your site. Multiplied across thousands of orders per year, this is the difference between thin and healthy margins.
4. Organic discovery via SEO. Content you publish on your own domain (blog posts, product guides, comparisons) builds search engine visibility that compounds over time. We covered this in detail in our guide to web design for SEO in Dubai.
5. Long-term stability. Marketplace policies, fees, and algorithmic visibility change without notice. Sellers who built businesses entirely on a single platform have found themselves squeezed when the rules shift. An independent site insulates you from those changes.

5. The Practical Strategy: Both Channels, Together

The pattern that worked best for UAE businesses through 2024 and 2025 was hybrid: marketplaces as customer acquisition, own site as customer retention.

1. Use marketplaces to find new customers. Amazon.ae and Noon give you immediate access to a large audience. The customer lifetime value calculation includes the marketplace fee as a customer acquisition cost.
2. Drive returning customers to your own site. Once a buyer recognises your brand, give them reasons to come back to your domain instead: better prices, exclusive ranges, loyalty rewards, faster delivery, free returns.
3. Track and compare channels. Look at acquisition cost per channel, average order value, repeat-purchase rate, and lifetime value. Reallocate budget based on what produces profitable customers, not just what produces orders.
4. Maintain consistent branding. Same logo, same tone, same product imagery, same support quality across every channel. Customers should not feel like they are dealing with two different companies depending on where they buy.

6. Trends That Played Out and Trends That Emerged

Some trends from earlier predictions delivered, others underperformed, and a few new ones became significant during this period.

📋 What delivered as expected

• Mobile-first behaviour. Predicted as growing, actually became the default at 78.67% of all transactions per Mordor.
• BNPL adoption. Predicted as a small but interesting payment method, actually became a category-defining checkout option at USD 2.45 billion in 2024 GMV.
• Cross-border shopping growth. UAE consumers continued to buy heavily from international platforms, with the ITA reporting 58% of UAE online purchases coming from overseas vendors.

📋 What underperformed

• The most aggressive market-size forecasts. Predictions of USD 17-20 billion by 2025 reflected pandemic-era extrapolation that did not hold once growth normalised.
• Cash on delivery’s death. COD declined but did not disappear, especially in northern emirates where digital payment infrastructure remains uneven.
• Voice commerce. Often forecast as a near-term disruptor, voice still represents a tiny fraction of orders in 2025.

📋 What emerged as significant

• Social commerce moved from experiment to channel. TikTok Shop, Instagram Checkout, and WhatsApp Business commerce became real revenue lines for UAE retailers, especially in fashion and beauty. Per Checkout.com data cited by Mordor, 96% of UAE respondents expect to transact inside social apps by 2030.
• UAE Pass as commerce infrastructure. The mandatory federal digital identity surpassed 11 million users by early 2025 and is increasingly embedded in checkout flows, lifting first-time conversion rates by up to 40%.
• AI in product discovery and customer service. AI-powered recommendation engines, virtual try-on, and chat-based shopping assistants moved from pilot projects to standard features at major UAE retailers. A 2026 Tabby consumer survey found nearly half of Middle East shoppers now use AI tools to help decide what to buy.
• Quick commerce competition. 15-minute grocery delivery became standard in dense Dubai neighbourhoods, though the unit economics remain unproven outside venture-subsidised players.

7. Key Takeaways for UAE Businesses Going Forward

1. Plan for a USD 9 to USD 13 billion market, not USD 17 to USD 20 billion. The UAE e-commerce opportunity is real and growing, but realistic sizing matters when you are forecasting, raising capital, or evaluating partners.
2. Build mobile-first, with biometric checkout in mind. Mobile is not a viewport, it is the dominant commerce channel. Plan UI, performance, and authentication accordingly.
3. Offer BNPL at checkout, period. Tabby, Tamara, or Postpay integration is no longer optional for any meaningful UAE store. Without it, you lose conversions.
4. Own your domain, own your customer relationship. Use marketplaces for acquisition, route loyal customers to your .ae domain for retention.
5. Get the regulatory basics right. TDRA NoC, valid trade licence, Federal Decree-Law No. 14 of 2023 compliance, GDPR-style data handling. These are now table stakes.
6. Pick UAE-based hosting infrastructure. Latency to Dubai matters for both UX and ranking. Our e-commerce hosting guide for UAE businesses walks through which plan fits which scale of store.
7. Plan for cross-border on day one. Most UAE retailers will eventually serve GCC customers from Saudi Arabia, Kuwait, and beyond. Hosting, payment gateways, and shipping should be designed to scale to the GCC, not just the UAE.

AEserver’s Verdict

The UAE e-commerce sector did not hit the most optimistic forecasts, but the market that emerged is healthier than the one those forecasts described. Growth is now being driven by infrastructure (UAE Pass, instant payments, biometric authentication) and consumer behaviour (mobile, BNPL, social commerce) rather than pandemic-era one-off shifts.

For UAE businesses, the strategic answer in 2025 looks much like it did in 2023 and 2024: combine marketplace presence with a strong owned-domain operation, hosted on infrastructure close to your customers, secured properly, and integrated with the payment methods UAE consumers actually use. The names of the dominant players may have shifted slightly, but the playbook for building a durable online business has not.

If you are starting now, the right order is straightforward: register your .ae domain, choose UAE-based e-commerce hosting, secure the site with SSL, sort out your TDRA NoC, integrate BNPL and digital wallets at checkout, and build content on your domain that earns search visibility over time. Then list selectively on Amazon.ae and Noon for top-of-funnel reach. For a faster start, Spark AI Website Builder by AEserver can ship a WordPress + WooCommerce-ready site in under an hour.

Study References

1. EZDubai & Euromonitor International (2025): “E-Commerce Report in the MENA Region 2024” (5th edition). UAE market size, payment trends, category breakdown. Emirates News Agency (WAM).
2. Mordor Intelligence (January 2026): “United Arab Emirates E-Commerce Market Size & Share Analysis, Growth Trends and Forecast (2026-2031)”. B2C/B2B split, device share, payment method share, geographic distribution. mordorintelligence.com.
3. U.S. International Trade Administration (last updated August 2025): UAE Country Commercial Guide, eCommerce chapter. Historical baseline data, marketplace history, Souq/Noon, Dubai Chamber forecast. trade.gov.
4. UAE Government Official Portal (u.ae): eCommerce regulatory framework. Federal Decree-Law No. 14 of 2023, TDRA NoC, eTrade licences. u.ae.
5. Tabby (February 12, 2025): “Tabby raises $160M Series E funding at $3.3B valuation”. Official press announcement. tabby.ai.
6. UAE Buy Now Pay Later Business Report 2024 (Q1 2024 update via ResearchAndMarkets): BNPL market size, growth, regulatory landscape. Cited via Khaleej Times.

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