Retail media in the UAE: market peculiarities and working mechanics
Greetings, readers! I am Anastasia Kim, a co-founder and the CEO of WEE Marketplace in the UAE. Here in the blog, I share the company’s successes and discuss topical issues for the e-commerce market. Today, we are talking about the burgeoning topic of retail media and I am giving the opportunity to share on my blog to my colleague Anton.
Hi, my name is Anton Sizemin. I am the commercial director of WEE Marketplace in the United Arab Emirates.
Retail media is becoming more competitive and more essential by the day, with a growing marketplace audience, new technologies, and shifting user behavior (searching for goods on marketplaces as opposed to classic search engines). At the end of this year, global channel earnings are estimated at $125.7 billion. The pioneers in this field are China and the United States.
I will share with you some analytics on the global development of retail media and tell you more about the UAE market, the relevant tools, and how WEE uses them in its work.
Markets and key players
Retail media is a promotional channel that retailers provide to their partners and third-party brands for product positioning, sales promotion, and other marketing purposes. It encompasses retailers’ online and offline presence: banner placement, page branding, unique promotions, reviews, stories, and streamers. In addition to online tools, retailers use physical stores to place ads on screens, flyers, and magazines. Through retail media, brands effectively offer their products directly at the point of purchase and track the customer journey all the way through to redemption.
Global retail media earnings are now valued at $125.7 billion, according to estimates by Bain & Co. This figure will grow by 10% annually through 2026. According to Statista, in China, retail media has reached 40% of the total digital advertising market ($54.2), in the US — 14.5% ($36.1 billion), and in Europe so far, about 10% ($9.6 billion).
China and the US are the leaders of the global economy and the main trendsetters in retail media. Alibaba was the first to launch product streams with colorful banners, introduce gamification to the shopping experience, and pilot social commerce, recommendation algorithms, and multifunctional chatbots. Amazon was the first to spin off advertising as a separate business and introduced AI and big data analytics via Amazon Ads. These major retail media platforms are earning about $40–50 billion annually.
The retail media sector in other markets is still at an early stage of development but is expected to grow rapidly as the e-commerce market expands. E-commerce in the MENA region (Middle-East and North Africa) is expected to reach $57 billion by 2026, opening up opportunities for both sellers and advertisers. The countries in this region have the best e-commerce growth rates in the world, with online commerce growing at an average annual rate of 11%.
The still low competition for customers in retail media, the prospects for scale, and the novelty of this channel for the customer make it particularly attractive and profitable for advertisers in emerging markets.
A land of advertising opportunity
The IMF predicts that by 2027, real GDP growth in the UAE will closely approach the average growth rate of emerging economies. Therefore, it is not surprising that, following China and the United States, mechanics of monetizing the advertising potential of online platforms are gaining momentum in the Arab Emirates. This process is accelerated by the presence of global brands, such as Amazon.ae, which promote competition and actively use universal and widespread mechanics in other markets.
Online shopping in the UAE increased by 68% in 2023. According to surveys, more than 90% of shoppers in the MENA region already shop online and around 50% of them plan to do so on a regular basis. The average shopper here spends about $144 at once, while in Europe and the US the average check is only just approaching $80. This is a huge market in terms of consumption, a market of 10 million people.
The UAE is a country with a young population actively interested in technology. More than 55% of the population is under the age of 30. They are interested in the lifestyle of Europe and the US and, according to research, the main digital channel in the country is YouTube.
Interesting features of the UAE market for sellers
- The UAE population is multinational, but English plays a key role in communication. Therefore, you can use English-first communication for work.
- Unlike other MENA countries, the UAE has a well-developed digital payment market. Cards account for 41% of online transactions and the UAE Central Bank actively supports the launch of digital payment methods.
- Low crime rate (fraud, theft, goods tampering) means it is safe enough to deliver expensive goods here, such as cell phones, in an hour, as WEE’s marketplace does.
What factors are holding back the development of e-commerce but could become critical in the coming years:
- The Emirates does not have a developed manufacturing industry and relies heavily on imports, which makes the country interesting for sellers with a wide range of products and expanded supply channels.
- The UAE is a rather conservative country and the penetration of new tools here is slow due to companies’ caution. For example, Noon, one of the largest marketplaces in the region, is testing the click-out format within the holding company with the help of its shareholder-developer.
- The high proportion of offline commerce makes retail media an important channel for advertisers to reach the maximum audience. In the UAE, shoppers spend much time in shopping malls, which have become the only possible place to walk in hot weather. Outdoor advertising works in this environment, and omnichannel can provide 360-degree contact with customers.
The UAE has a high potential to leverage tools that have proven effective in other e-commerce markets.
How retail media works in the UAE — using WEE as an example
The WEE marketplace is the fastest delivery marketplace for a wide range of products in the UAE, offering a selection of more than 50,000 items, from the latest smartphones to children’s construction kits, with 1-hour delivery in Dubai and next-day delivery in the rest of the Emirates. We use an invite-only strategy, which allows us to keep categories manageable with the presence of an excessive number of sellers and to emphasize the mechanics that are successful in such a marketplace. In general, in the UAE, it is essential to build transparent relationships between customers and sellers — this is our competitive advantage.
Three languages are used for product cards on WEE and customer support offers four: Arabic, English, Russian, French. This reflects the general demographics and the balance of power on our site, where UAE residents from more than 20 countries regularly shop. This fact offers an additional upside key in any marketplace: more special occasions and celebrations than in any other country. In July, the 1445th Muslim New Year was celebrated here; in November, the Indian holiday Diwali was observed; and on December 2 — the UAE National Day.
The UAE is a dynamically developing market. Many technologies that have become familiar to sellers are just beginning to be used here. That is why at WEE, we strive to share our expertise, and for this purpose, we have opened the “Academy of Sellers”. This is a platform where we share our experience in e-commerce for free, as well as invite professionals from other companies for a deeper dive into a particular area. The Academy is not only a theoretical knowledge base but also a practical tool for sellers.
Moving to retail media, WEE utilizes a variety of tools, many of which have already been shown to be effective, and we are scaling the work with them. We help not only local sellers conduct outreach campaigns but also companies to launch their projects in Dubai. In fact, WEE is a center of e-commerce expertise not only for the region but also for business representatives from other countries.
Speaking of promotion tools, we offer both classic media advertising (banners, videos), shop-in-shop, search engine optimization, product ads that are automatically generated from product card attributes (e.g., a selection of products), and the latest AI-based tools.
Top 3 effective retail media tools at WEE
- Content generation with 24AI technology (a subscription to the service is free for our retailers). It allows you to create product images much faster and more efficiently. At the same time, experts claim that well-designed product cards bring up to 25% more effect
2- Banners and click-out: ready to share analytics and their multi-million dollar audience;
3. Gifts in beauty. We give customers compliments using beauty merchandise from vendors. Often it is difficult for a representative of a new product brand (or a brand unknown in the UAE, but well-known to the Russian customer) to compete. That is why we give such brands the opportunity to reach out to their consumers and let them test the product.
We see an overwhelmingly positive response from customers, reflected in higher retention rates and positive feedback. Utilizing both regular tools and additional viral marketing leads sellers to sales results. We already have partners whose sales on WEE are outperforming other major platforms.
Retail media tools will continue to be important in the coming years and will only increase their influence around the world. Development is going the way of Amazon and Alibaba, which means capitalizing on the opportunity, including in strategically important markets like the UAE.
