Firms are making a push in the Emirates social commerce industry to capitalize on the high growth potential of the sector

Print

Email

Over the last few years, the government in the United Arab Emirates has encouraged digitalization among both individuals as well as organizations. This has resulted in the growing usage of social media platforms. According to a report from the Telecommunications and Digital Government Regulatory Authority, the United Arab Emirates is ranked first globally, when it comes to the use of social media based on the average time spent on platforms per capita. As compared to the global average of 58.4%, the average for Emirates stands at 106%. 

This, along with the fact that the e-commerce segment has recorded impressive growth in the country over the last few years, foreign and domestic firms are making a push in the Emirates social commerce industry to capitalize on the high growth potential of the sector. For instance,

• In September 2022, respond.io, a Malaysia-based conversational commerce platform, announced that the firm is planning to further boost its presence in the United Arab Emirates social commerce sector. Over the next few years, the firm is expected to increase its investment in the country as it seeks to capitalize on the growing social commerce space.
• Notably, the announcement from the firm comes after closing a US$7 million Series A funding round. The investment was led by Headline, and also included participation from AltalR Capital, Sterling Oak Group, Smart Partnership Capital, and Calendula Ventures.
• Notably, the Emirati social commerce industry is already one of the biggest revenue drivers for respond.io. Over the last 12 months, leading to September 2022, the firm has recorded revenue growth of 236.23% in the Emirates. The firm has attributed this growth to its ability to empower retailers with tools, thereby enabling them to convert social media engagements into sales.
• While the firm is planning to use the fresh capital for expanding its partner network, respond.io is especially focused on partnering with large telecom players in the country, to make their solutions available more conveniently.

Alongside foreign players such as respond.io, domestic firms are also making a push into the growing social commerce industry in the United Arab Emirates, as more and more consumers continue to buy products and services through social media platforms. For instance,

• In September 2022, PayTabs, one of the leading payments service providers in the region, announced that freelancers, consultants, and micro vendors, among others, across the Emirates and Saudi Arabia, will be able to accept payments on its social commerce platform, Paymes.
• Notably, Paymes allows merchants to create a cart and share it with customers through social platforms such as WhatsApp and Instagram. This ensures that merchants are able to convert potential buyers into actual customers. For shoppers, Paymes offers a more seamless shopping experience.

The integration of PayTabs payment service with Paymes will further improve the buying and selling experience for both shoppers and merchants in the region. Along with its presence in the GCC region, Paymes is also available across key African markets such as Egypt.

Over the next three to four years, the social commerce sector in the Emirates is expected to be driven by the beauty and personal care industry. According PayNXT360, the social commerce beauty and personal care sector is projected to reach over US$500 million by 2026. Currently, the market is estimated to be US$174 million. This shows that there is a lot of headroom for growth over the next few years. This growth potential is expected to drive more interest from foreign and domestic players. Consequently, PayNXT360 expects further innovation and competition in the Emirates social commerce industry over the next three to four years, as more and more consumers continue to turn to social media platforms to purchase products across different categories.

To know more and gain a deeper understanding of the social commerce market in the UAE, click here.