Middle East Retail Market: E-Commerce Growth, Experiential Retail & Future Outlook

According to IMARC Group's latest research publication, Middle East retail market size reached USD 2,120 Billion in 2024. Looking forward, IMARC Group expects the market to reach USD 3,028 Billion by 2033, exhibiting a growth rate (CAGR) of 4.04% during 2025-2033.

How AI is Reshaping the Future of Middle East Retail Market

• Smart Personalization at Scale: Over 71% of UAE retailers now prioritize AI investments, with intelligent systems analyzing customer behavior to deliver tailored recommendations. Brands like Majid Al Futtaim are using AI-powered tools to match shoppers with products based on past purchases, browsing patterns, and even local cultural preferences, boosting conversion rates significantly.
• Transforming Inventory and Supply Chains: AI-driven demand forecasting is helping retailers predict what customers want before they know it themselves. Saudi Arabia's partnership to develop 14 smart warehouses in Jeddah showcases how AI optimizes inventory management, reduces waste, and ensures products reach shelves faster—cutting costs by automating complex logistics decisions.
• Revolutionizing Customer Service: AI chatbots and virtual shopping assistants are becoming the norm across the region, with 53% of MENA shoppers already using AI-powered visual search tools. Dubai-based retailers are deploying conversational AI that understands Arabic dialects and cultural nuances, making shopping more accessible and reducing the burden on human customer service teams.

Explore Updated 2026 Market Trends & Analysis

Middle East Retail Market Trends & Drivers:

The Middle East retail sector is experiencing rapid growth driven by widespread digital adoption and the expansion of e-commerce platforms. Consumers are increasingly shifting toward online shopping for convenience, variety, and competitive pricing, accelerated by improved logistics, mobile penetration, and secure payment gateways. Local and international brands are heavily investing in omnichannel strategies, blending physical stores with seamless digital experiences through apps, click-and-collect services, and personalized marketing. Social media commerce, particularly on Instagram and TikTok, has emerged as a powerful sales channel, especially among younger demographics who discover and purchase products directly through influencers and live shopping features.

Surging tourism and experiential retail are reshaping the landscape as destinations like Dubai, Riyadh, and Doha position their malls as global lifestyle hubs. Retailers are transforming traditional shopping centers into mixed-use entertainment destinations featuring luxury dining, indoor adventure parks, cinemas, and cultural attractions to extend visitor dwell time and boost spending. The return of international tourists, coupled with rising domestic leisure spending, has encouraged brands to curate immersive store concepts, pop-up events, and exclusive collaborations that prioritize experience over mere transactions.

Sustainability and conscious consumerism are gaining momentum among Middle East shoppers, particularly Gen Z and millennials who actively seek eco-friendly and ethically sourced products. Retailers are responding by incorporating sustainable materials, reducing packaging waste, launching resale and rental programs, and highlighting local artisan brands that preserve cultural heritage. Demand for clean-label beauty, organic food, modest fashion made from sustainable fabrics, and circular economy initiatives is pushing both luxury and mass-market players to transparently communicate their environmental commitments and support regional sustainability goals.

Middle East Retail Market Industry Segmentation:

The report has segmented the market into the following categories:

Product Insights:

• Food and Beverages
• Personal and Household Care
• Apparel, Footwear and Accessories
• Furniture, Toys and Hobby
• Electronic and Household Appliances
• Others

Distribution Channel Insights:

• Supermarkets and Hypermarkets
• Convenience Stores
• Specialty Stores
• Online Stores
• Others

Country Insights:

• Saudi Arabia
• Turkey
• Israel
• United Arab Emirates
• Iran
• Iraq
• Qatar
• Kuwait
• Oman
• Jordan
• Bahrain
• Others

Competitive Landscape:

The competitive landscape of the industry has also been examined along with the profiles of the key players.

Recent News and Developments in Middle East Retail Market

• October 2025: Middle Eastern retailers accelerate AI adoption, with 76% already invested in AI solutions and 44% prioritizing computer vision for store operations to boost efficiency and personalization.
• January 2026: Digital payments and mobile commerce surge in the region, with digital wallets and app-based transactions gaining strong momentum, while mobile-first purchasing drives e-commerce expansion across Gulf nations.

• January 2026: The inaugural Shoptalk Luxe event launches in Abu Dhabi, uniting global luxury retail leaders to explore pioneering technologies, innovative business models, and market strategies transforming high-end shopping experiences.
• January 2026: Gulfood 2026 in Dubai highlights grocery retail innovations, featuring award shortlists for sustainable logistics like zero-emission refrigerated electric vehicles and climate-adaptive solutions to enhance supply chain efficiency.
• January 2026: AI-powered personalization and agentic AI redefine commerce in the Gulf, enabling scaled AI-assisted shopping, advertising, and seamless customer journeys amid rapid adoption by young, digitally fluent populations.

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