December 2021|UAE News
High Heightened Technological Adoption, Support & Initiatives for E-Commerce Growth by the Government, and Changing Consumer Preference owing to Covid-19 has Accelerated Growth Prospects in UAE CEP Market
Growing Government Support: The UAE CEP market continues to be an attractive avenue that has seen a growth of ~ 11% CAGR for the volume of shipments even after international trade has faced disruptions owing to the pandemic. This is attributed to the continued support by the government for adequate infrastructure and other reforms to support express delivery players. The Government has taken up initiatives such as improvement of Ease of Doing Business Parameters, along with the creation of Economic Zones which offer tax-exempts to businesses as well as facilities for courier and other delivery companies.
This is supplemented by the fact that there has been growth in Physical Infrastructure with development of highways, airports & seaports as UAE is one of the major transshipment hubs in the region. Furthermore, Dubai Executive Council has approved the Dubai e-Commerce Strategy with a primary goal of with the aim of solidifying the emirate’s position as a hub for global ecommerce. The market is bullish with the GDP Per Capita of UAE standing at ~ 300% above the world average in 2020 & is expected to increase to ~ 10% in 2025 over 2020.
Expatriates and Demographic Advantages: The Express Delivery Market maintains its status as an attractive space for increased revenue as 80% of the population is expatriate which means that they receive and send couriers, mails and parcels to and from more often than non-expatriate population. Furthermore, the median age in UAE is 32.6 Years (as of 2020), along with high internet penetration rates (91%) means that the express delivery segment is witnessing high demand as E-Commerce and E-Deliveries have seen large scale adoption in the country.
Challenges in UAE Express Delivery Market: One of the major concerns coming out of the market is the fact that inflation has been in the negative category for the last couple of years (-2.1% for 2020). This points to the fact that consumer spending has been slowing down and could be a potential challenge for businesses vying for customers. Another point of concern remains concerning the postal address code integration due to the absence of postal codes leading to the increased cost borne by companies for last-mile deliveries by ~25%. Even though steps have been taken by both the government and various private players, there exists challenges with last-mile delivery. Lastly, certain small CEP companies are making inroads into the industry without paying the due registration fees and offering deliveries at a lower rate as compared to the registered players. These companies are less technologically adapt to the new systems but have a moderate to strong user base with respect to price sensitive customers.
Multi-Faceted Impact of COVID-19 on UAE CEP Market: The UAE was one of the top-performing economies globally before the sudden outbreak of the new novel coronavirus. However, the pandemic has positively impacted the growth of the Express Delivery Market in the UAE. Digitalization and increased technological up-gradation were witnessed in the country.
The onset of COVID-19 acted as a catalyst and accelerated the process of familiarity with E-Commerce and E-Retail. Existing physical or brick and mortar stores had witnessed a fall in sales which prompted them to shift their focus towards online shopping. This has served as an added demand for more shipments, especially in the B2C segment. This is corroborated by the fact that lockdowns have made inter-country travel difficult, and due to the high population of expatriates living in the country, deliveries during the festive seasons and other important occasions has led to an increase in the number of express shipments.
However, a challenge that the CEP companies are facing is the additional cost being borne by the express delivery companies owing to the operational disruptions stirred by lockdown.
Analysts at Ken Research in their latest publication “UAE CEP Market Outlook to 2025 – By Domestic and International Express, By Mode (Ground & Air Express), By Business Model (B2C, B2B & C2C), By Shipment Weight (<3kg, 3-5kg, >5kg), By Region (Dubai, Abu Dhabi, Sharjah & Others)” have observed that the CEP market in UAE has a great potential to grow supported by increased E-Commerce Demand in the country. The Covid-19 outbreak has further accentuated the growth of the market by shifting major retailers to online platforms affecting consumer preference concerning online retail. UAE CEP Market is expected to grow at a CAGR of ~15.4% based on the number of shipments delivered over the forecast period 2020-2025.
Key Segments Covered
- By Domestic and International Express
- Domestic Express
- International Express
- By Mode of Transport
- Ground Express
- Air Express
- By Major Regions
- Dubai
- Abu Dhabi
- Sharjah & Others
- By Business Model
- B2C
- B2B
- C2C
- By Shipment Weight
- < 3 Kg
- 3 Kg – 5 Kg
- > 5 Kg
- By Delivery Period
- Same Day Delivery
- 1-2 Day Delivery
- More than 2 Day Delivery
CEP Companies Covered
- Aramex
- Emirates Post
- SMSA Express
- DHL Express
- FedEx
- UPS
- Team Express Services
- First Flight Couriers
- TFM Express
- Sky Express
- Zajel Courier Services
- Century Express
Request For Sample Report @ https://www.kenresearch.com/sample-report.php?Frmdetails=NDkzMjg1
Cross-Comparison on GCC Postal Networks Covered
- Bahrain Post
- Emirates Post
- Oman Post
- Qatar Post
- Saudi Post
Key Target Audience
- CEP Companies
- Express Delivery Companies
- 3PL Logistics Companies
- Postal Network Association
- E-Commerce Companies/Platforms
- Integrated Logistics Companies
- Logistics/Supply Chain Industry Associations
- Parcel and Mail Companies
- Ministry of Transport and Communications
Time Period Captured in the Report: –
- Historical Period – 2015-2020
- Forecast Period – 2020-2025F
Key Topics Covered in the Report
- UAE CEP Market Overview
- Industry Lifecycle of UAE CEP Market
- UAE CEP Market Ecosystem
- Timeline of Major CEP Players
- Delivery Model in CEP Market
- UAE CEP Market Sizing Analysis, 2015-2020
- Seasonality Trends in CEP Market
- Growth Drivers for UAE CEP Market
- UAE CEP Market Segmentation, 2020
- Competition Scenario amongst Players in UAE
- Market Share of Leading Players in the Overall UAE CEP Market
- Market Share of Leading International and Domestic Players
- Competition Parameters in UAE CEP Market
- Cross Comparison of Major UAE CEP Players
- UAE CEP Market Pricing Analysis
- Laws and Regulations Governing CEP Market in UAE
- Issues and Challenges Faced by CEP Players
- SWOT Analysis of CEP Market in UAE
- New Trends and Developments in the UAE CEP Market
- Customer Analysis for the UAE CEP Market
- Future Market Size and Segmentations, 2020-2025F
- Covid-19 Impact on UAE CEP Market
- Analyst Recommendations
- Cross-Comparison of GCC Postal Networks
For more information on the research report, refer to the below link:
UAE Parcel Delivery Market Growth | UAE Courier Delivery Market Future Outlook
Related Reports
Contact Us:-
Ken Research
Ankur Gupta, Head Marketing & Communications
+91-9015378249
