USA, India and China top 3 shopping corridors for UAE consumers

Dubai / Emirates Business

PayPal and Ipsos released their third annual cross-border commerce report. The global insights research investigated the online domestic and cross-border shopping habits of more than 28,000 consumers in 32 countries, to uncover opportunities for consumers in the world’s commerce revolution.
The Global Cross-Border report shows Middle-East as one of the regions with the highest incidence of cross-border online shoppers.
Cross-border online shopping is common in the UAE with almost half (46%) of the UAE online shoppers stating that they shopped online from websites in another country in the past 12 months. The main drivers for UAE online shoppers to buy cross-border online are; having a secure way to pay (selected by 47 percent of UAE online shoppers as something that would make them more likely to buy from website in another country), free shipping (44 percent) and proof of product authenticity (43 percent).

The future of online spending
Overall online spending continues to grow in the UAE, forecasted to reach AED 33 billion by 2018. The research revealed that 68% of online adults in UAE shopped online in the past 12 months, up from 63% in 2015. The increase in online spending is also forecasted to continue, with almost half of online adults surveyed (48%) saying they will increase their online spending in the next 12 months, citing convenience of shopping online (selected by 67% of those who predict an increase in their online spend), planning to save more money (35%) and change in their disposable income (29%) as reasons for the
expected increase.

rise of mobile
commerce in the UAE
With high rates of mobile penetration in the UAE, online shoppers are increasingly opting to make purchases on their mobile devices – resulting in an estimated 29% growth in mobile spend between 2015 and 2016 to reach close to AED 10 billion, with momentum expected to continue into 2017 with a further 27% growth.
UAE shoppers making cross-border online transactions in the past 12 months indicated that on average 40% of their cross-border transactions were made on mobile devices, either a smartphone or tablet. When they were asked about the devices they have used in the past 12 months, 76% of cross-border shoppers said they had used smartphones to make cross-border purchases online, while 35% have used tablets and 18% have used Smart TV/consoles, mirroring the habits seen in overall online spend.
“The UAE’s commerce revolution is well underway, and backed by the country’s diverse and truly global population and high mobile penetration rates, consumers are looking internationally to source their favorite products and services – ranking themselves in the top three countries making cross-border purchases from a mobile device,” commented Kıvanc Onan, Senior Regional Director, PayPal Middle-East and North Africa.

Consumer buying
Travel and transportation was the most common cross-border purchase category in the UAE in the past 12 months (47% of cross-border shoppers say they have purchased cross-border in this category in the past 12 months), while a third of cross-border shoppers (33%) purchased event tickets such as for the cinema, theatre, concerts from websites in other countries, and 40% purchased clothing/ apparel, footwear and accessories from foreign websites.
When considering where to buy from, 44 percent of respondents agreed that they trust online stores from other countries as much as stores from the country they live in.
The USA was the most popular cross-border online shopping destination (16% of UAE online shoppers have made a purchase from a website in the US in the past 12 months), with UAE shoppers spending an estimated AED2.4 billion on purchases from US websites in the past 12 months, followed by India (13% of online shoppers have shopped from India) and China (10%).
The research has shown that current UAE cross-border shoppers are looking for a good deal, with better prices selected as one of the top reasons for shopping on websites from USA (61 percent of those who shop from USA give better prices as a reason for doing so), India (72 percent) and China (77 percent). Gaining access to items not available in their own country and to a greater variety/availability of products/styles was also found to be a popular reasons (each selected by 62 percent of those shopping from USA) for having made purchases in the USA.
Sixty-two percent of UAE consumers polled who shop cross-border cited the ability to discover new and interesting products in China as a main reason behind their choice to shop in that market. Fifty-nine percent of UAE cross-border shoppers that preferred Indian websites to shop cited that their main reason was the availability of their
preferred payment method.

Security drives choice of
payment method
Key factors for choosing a preferred payment method for cross-border shopping included security (half of UAE cross-border shoppers with a preferred cross-border payment method selected ‘a secure way to pay’ as a reason for their preference), convenience (selected by 37 percent) and being accepted by most retailers (35 percent). Among the UAE cross-border shoppers who cite PayPal as their preferred cross-border payment method, over half (55%) say one of their reasons for Preferring PayPal is that it is a secure way to pay, and 42 percent choose it because it is a well-known and trusted brand.
For the past three years PayPal has revealed this extensive cross-border commerce research to understand the online shopping behaviors of the global consumers. This year the research has revealed that UAE as one of the top three countries surveyed for proportion of cross border purchases going through mobile devices, showing the high adaption in mobile usage in the region. USA, India and China have continued to be the top three cross-border shopping destinations for the UAE consumers, just like last year. The future of online spending for UAE has great potential for growth and estimated to increase for the upcoming years.