Kuwait’s e-commerce market is expected to reach KD 1.61 billion this year, a significant increase of over KD 500 million, according to IT expert and former Director General of the Central Agency for Information Technology (CAIT), Eng. Qusay Al-Shatti. This growth is driven by a compound annual growth rate (CAGR) of 12.57% projected from 2024 to 2028, placing Kuwait among the fastest-growing e-commerce markets in the region.
From 2018 to 2023, Kuwait’s e-commerce market grew at a rate of 11.33%. Al-Shatti attributes much of this growth to online sales across various sectors, including fashion, electronics, beauty products, food, and more. Transactions include those made via courier or delivery services, whether paid electronically or through cash on delivery.
Digital Infrastructure Key to E-Commerce Growth
Al-Shatti emphasized the importance of Kuwait’s digital infrastructure in driving e-commerce. With over 99% of the population having access to broadband internet at competitive prices and widespread smartphone usage across all income levels, Kuwait’s advanced digital infrastructure plays a crucial role. Additionally, Kuwait became the first country in the world to adopt 5G technology, which further supports e-commerce growth.
E-Commerce Set to Overtake Traditional Retail
Looking ahead, Al-Shatti expects e-commerce to continue its growth trajectory, not only in Kuwait but also globally. The shift from traditional retail stores to online shopping is becoming more pronounced, with major retailers such as Sears in the United States and Debenhams in the UK closing stores due to declining sales. This global trend indicates that e-commerce may eventually replace brick-and-mortar stores.
According to an Ipsos report, 53% of consumers in Kuwait have made online purchases, and 39% predict that most of their future shopping will be done online. However, 60% of respondents believe that the in-store shopping experience cannot be entirely replaced by online shopping, highlighting the continuing relevance of physical retail.
Global E-Commerce Trends
Globally, e-commerce is projected to reach $6 trillion by the end of 2024, with China accounting for $3 trillion of that total. The global retail market is valued at $29.7 trillion, with e-commerce making up 19.5% of it. These figures underscore the potential for continued growth in e-commerce, even as traditional retail remains dominant.
Changing Consumer Behavior
The shift in consumer behavior toward e-commerce is fueled by factors such as the convenience of online shopping, time-saving benefits, product variety, promotional offers, and the rise of digital payment methods. Al-Shatti also highlighted the development of global trade platforms and the popularity of omnichannel retail and social media marketing as key drivers of e-commerce growth in Kuwait and worldwide.