With an increasing number of businesses going online and expanding their commercial footprints in the digital landscape, business opportunities in the global market have multiplied. The UAE's e-commerce landscape is rapidly changing as online consumers push businesses to expand their existing infrastructure and logistics resources to ensure the quickest possible delivery of products and services to their doorsteps. As a result, businesses, particularly small and medium-sized enterprises (SMEs), are going global and experiencing phenomenal growth in international sales and earnings.
Post-covid: SMEs’ Earnings Are Up
According to Mastercard’s Borderless Payments Report 2022, two in five SMEs in the UAE are earning more money than before the pandemic due to digital growth. While 66 percent of the businesses are witnessing growth in online sales and services, 77 percent are planning to do more international business.
For most SMEs, online business and international sales have become the key drivers of growth. The report paints a rosy picture with more than half of the UAE SMEs making and receiving more cross-border payments than they were prior to the pandemic and nearly two-thirds sourcing more competitive quotes from suppliers across borders and recovering to at least pre-pandemic levels.
“The pandemic-induced digital transformation has opened up new opportunities, especially new markets, for small businesses. SMEs in the UAE and across the world are growing their international customer and supplier networks online at a phenomenal pace. It’s therefore crucial that financial institutions have the right cross-border solutions in place to support them. Cross-border payment systems must become faster, cheaper, and more secure,” says Stephen Grainger, Executive Vice President, Mastercard.
Better Payment Systems Needed
The UAE needs better cross-payment systems going forward as its e-commerce sector is forecast to grow 60 percent to more than $8 billion by 2025, according to a recent report by Euromonitor International. At the global level, it will be a $55.6 trillion market by 2027, witnessing a compound annual growth rate of about 27.4 percent.
Consumers in the UAE are increasingly experimenting with new products and services from other countries. According to a study conducted by Meta Platforms, formerly known as Facebook, in collaboration with market research firm YouGov, nearly 64 percent of UAE shoppers are eager to explore international markets.
They are most interested in ordering retail (67 percent) and consumer packaged goods (46 percent), followed by technology or telecom (28 percent), entertainment brands (25 percent), and travel (12 percent). The cross-border transaction system will only continue to evolve and improve, as 50 percent of UAE consumers prefer cashless transactions, compared to 41 percent globally.
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