The UAE is a major trading hub in the Middle East, and the country’s CEP market is dominated by international B2B deliveries. The International CEP segment dominates the market, accounting for more than half of the total market revenue, and is expected to grow further during the forecast period. The substantial share of cross-border online shopping contributes to the expansion of the international CEP market. The country’s initiatives to develop cross-border e-commerce are expected to fuel the segment’s growth. Dubai Customs launched the Cross Border e-commerce platform in January 2020 in order to make the country a global hub for e-commerce and to encourage e-commerce companies to set up shop in Dubai.
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1. High number of orders are placed during Quarter Endings, Year Endings and Ramadan in UAE.
There is a high demand for express delivery services from April to August, because of the various festivals in UAE. This contributes to the fair share of revenue to the CEP market in the country. Moreover, B2C shipments witness a huge surge owing to the summer vacations and festive period. Amazon Prime Day and other sales campaign fall in this period
This increases the express delivery frequency more than the months without any offers. Moreover, it is during festive days when gifts and wishes are being sent to the loved ones, that is near Christmas, Easter, New Year etc. Another variation can be during the Black Friday & Singles Day period when Emiratis tend to shop online to get the maximum benefits.
2. UAE Trade Lanes have significant volume of Trade with Three Geographies viz., Asia, Europe and MENA region.
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Dubai’s total foreign trade value in 2018 attained AED 1.3 trillion (US$353.9 billion). UAE Trade Lanes have significant volume of Trade with Three Geographies that are Asia, Europe and MENA region. The International CEP segment dominates accounting for more than 65% of the total market and is expected to continue the growth through the forecast period. The significant share of cross-border online shopping is also contributing to the growth of international CEP market. Moreover, the country’s initiatives towards the development of cross-border e-commerce are expected to foster the growth of the segment. In Jan 2020, Dubai Customs has launched Cross Border e-commerce platform to make the country a global hub for e-commerce and to encourage e-commerce companies to establish their businesses in Dubai.
3. There is a significant presence of international & domestic express companies owing to high volume of cross-border trade.
Domestic players have contributed through effective collaborations with global companies in order to enhance their reach to the remote areas of the country. Various international express companies have entered the market owing to well connectivity with the GCC countries, high volume of international trade, shipments from overseas family members and increase in business activities.
4. Integration of New Technology have driven the growth in UAE CEP Industry.
CEP companies have been developing new technologies and experimenting new supply chain models to increase parcel volumes and expedite deliveries. With the growing demand for on-time deliveries and increasing preference towards convenience, companies are developing solutions such as Pickup Drop-off (PUDO) points, automated parcel delivery terminals. In Nov 2019, Aramex has launched a new PUDO service called ‘Aramex Spot’ in UAE and Saudi Arabia. Moreover, warehouses are becoming automated with the aid of robotics and automation, and companies are experimenting on autonomous vehicles and drone deliveries for efficient and faster last mile deliveries. Furthermore, many tech-based start-ups are helping e-commerce companies, as well as traditional brick and mortar stores to deliver at low costs.
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