How e-commerce is boosting the warehousing business in Dubai

Currently, there is more supply than demand for property in the Dubai industrial and warehousing markets. An increase of firms in the e-commerce, manufacturing and 3PL sectors is driving the demand for more warehouses in the city. The e-commerce sector, in particular, is playing a huge role in helping the warehouse industry grow.

How has the e-commerce sector flourished in Dubai?

In the last few years, there has been a boom in the number of startups, especially in e-commerce. This is because the number of online shoppers have grown and are making a lot of purchases online. Businesses across the UAE are enjoying the benefits that come with using cards over cash for all types of transactions.

In the UAE, the average online spending per person is $300, as compared to $90 in Saudi Arabia and $94 in France (according to Business Monitor International). All over the world, cards are gaining popularity over cash. In 2017, the number of card transactions done in the UAE was 68% which went up to 70% in 2018.

In addition, with Expo 2020 coming closer to its inauguration date, one can expect an optimistic and steady growth in the volume of payments. Growth of e-commerce marketplaces, like Noon and Amazon has also resulted in increased confidence among shoppers to buy online.

How is e-commerce boosting the warehousing business in Dubai?

As seen in the Markets Logistics Index, the UAE has proved itself to be a leading market player in the logistics industry and comes first in the Gulf region and third globally.

According to statistics by Business Insider Intelligence, the logistics industry is expected to reach $15.5 trillion by 2023, from $8.1 trillion in 2015.

Simultaneously, many e-commerce giants have realized the importance of an efficient, reliable and timely logistics system which is an absolute necessity for their own success. The e-commerce industry in the UAE is estimated to be worth about $27.1 billion by 2022. As a result, an optimistic response from consumers in the UAE towards e-commerce and online activities can be expected. Push towards more orders means more shipments and parcels. This will lead to a greater inflow of products into warehouses, filling them up, and creating the need for more warehouses for better accommodation.

In general, the e-commerce industry in Dubai associates itself highly with warehouses in Dubai where parcels and goods are stored, processed, and shipped. In the UAE, the highest demand for warehouses is seen in Dubai, which could be a direct consequence of increased online trade activities. A major warehouse-location in the Emirate is the Dubai Industrial Park. The park has warehouse spaces ranging from 5,000 to 10,000 sq. ft.

Statistics indicate that the rise of e-commerce activities positively impacts the growth of logistics and in turn, the demand for warehouses. E-commerce, along with other sectors, is sure to boost the warehousing sector in Dubai and make way for a more seamless logistics networks and services.