Abu Dhabi Ecommerce Business Potential

The UAE's e-commerce market valuation was USD 7.5 billion in 2023. Market experts estimated it to reach USD 13.3 billion by 2028. Abu Dhabi is contributing more than 20 percent behind Dubai.

If you're looking for business opportunities in the UAE, Dubai is always the first choice. But it comes with intense competition. Compared to Dubai, Abu Dhabi is not as explored.

Challenges and Opportunities in Abu Dhabi's eCommerce Sector

• With technological development, entrepreneurs have a lot to learn and unlearn. There is AI and AR/VR integrating into the ecommerce businesses. If you are not keeping yourself updated and changing with time, you will fall behind.

• Big players like Amazon & Noon are operating in Abu Dhabi, so there is tough competition. These players have their brand names and heavy capital to play with. Plus, such players are notorious for playing the discount game. This is why, as a newbie, you will have to play your cards right.

You should not be operating with the "go and conquer everything mindset". Instead, what I will recommend is that you pick a niche and become the top player in it, the big fish in a small pool. Then, you can start expanding into other sectors and see sustainable growth.

If you are planning a business setup in Abu Dhabi, this is something you should always keep in mind. A major reason most startups incur losses or shut down is due to a lack of preparation. Make sure you research the competition well enough, this will make or break your business.

Government Support for Abu Dhabi Businesses:

The government is working towards making Abu Dhabi a worldwide business hub. Here are some of the key measures taken to help startups scale their operations:

1. Khalifa Fund for Enterprise Development: Under this scheme, the government is providing loans and opportunities for international market expansion. Despite having more oil than Dubai, the Fund contributed to 44% of the non-oil business.

The Fund has given 1,168 active loans, and this has resulted in the contribution of AED 1.32 billion.

2. Abu Dhabi Investment Office (ADIO) Incentives: The ADIO funds startups with huge potential.

3. HUB71: Under this, the government offers incentives for startups like:

• Health insurance,
• Living arrangements,
• Commercial office space.

This program also helps startups connect with the right investors.

4. Freezones: If you open your business in an Abu Dhabi free zone, you will get complete ownership. Plus, visas & work permits make it easy for foreigners to set up their business. This is a big reason for the increase in the Abu Dhabi free zone trade license applications over the years.

Advantages of setting up an Ecommerce business in Abu Dhabi:

Due to the measures taken by the Abu Dhabi government, businesses have many benefits.

1. Tax Benefits: Ecommerce businesses often struggle with profitability due to high taxation. Starting your business in the free zones leads to tax benefits. There are no personal or corporate taxes and no import/export tariffs.

2. Strategic Location: Abu Dhabi gives businesses access to African, Asian, and European markets. This is an excellent impetus for the growth of your e-commerce business.

3. Advanced Infrastructure: The government is leaving no stone unturned to make Abu Dhabi advance. It promotes digitization to keep the emirate at the forefront of all developments. Abu Dhabi is the hub for mobile app development. This encourages startups to build e-commerce apps for both Android and IOS stores.

Closing Thoughts:

With all the government support and the benefits, Abu Dhabi is estimated to contribute around 23% in UAE's ecommerce market. If you have the passion to B2C and online sales or are looking to expand to a business hub, you know the kind of potential this emirate holds.