As the coronavirus pandemic continues to keep consumers indoors, almost every shopping need, from food and other daily essentials to fashion, cosmetics and gardening goods, is now being satisfied online.
According to Mastercard’s latest “Recovery Insights” report, UAE consumers are now buying 21 percent more from online stores, higher than in markets like the US and Canada. In Saudi Arabia, more shoppers have also shifted to online buying.
“Consumers worldwide are making purchases at a greater number of websites and online marketplaces than before. Residents in countries like Italy and Saudi Arabia are buying from 33 percent more online stores, on average, followed closely by Russia and the UK,” the report said.
Mastercard’s study focuses on how spending habits have changed and digital transactions accelerated in the retail space since the pandemic started last year. In 2020, consumers worldwide were estimated to have spent an additional $900 billion in retail online.
“Put another way: in 2020, e-commerce made up roughly $1 out of every $5 spent on retail, up from about $1 out of every $7 spent in 2019,” Mastercard said.
In-store cashless transactions
But it’s not only online shops that are seeing an uptick in spending. Even in store, digital transactions jumped by an additional 2.5 percentage points, as consumers chose to do away with cash.
“COVID-19 accelerated the transition to digital – with more consumers moving from plunking down cash to touch-free payments,” the report said.
The changes in spending habits are likely to last longer. Roughly 20 to 30 percent of the COVID-related shift to digital globally is expected to be permanent, the report noted.
“While consumers were stuck at home, their dollars travelled far and wide, thanks to e-commerce,” said Bricklin Dwyer, Mastercard chief economist and head of the Mastercard Economics Institute.
“This has significant implications, with the countries and companies that have prioritised digital continuing to reap the benefits. Our analysis shows that even the smallest businesses see gains when they shift to digital.”
Among the key overarching trends, Mastercard said, retailers that sell essentials online, which include supermarkets and grocery operators, saw some of the biggest gains.
“We anticipated 70 percent to 80 percent of the grocery e-commerce surge to stick around for good,” the report said.
International e-commerce also went up by 25 percent to 30 percent year over year from March 2020 through February 2021.
In a previous report, Mastercard said that more than 73 percent of UAE consumers have shopped more online for groceries, 66 percent for clothing and 60 percent for medicines since the outbreak. About 70 percent have also started banking online.
Consumers in the UAE are the biggest spenders on the Internet in the Middle East and North Africa region, with each online shopper spending an average of $1,648, according to a report by the Dubai Economy and Visa.