Changing Consumer Preference towards Online Shopping, Increasing Cross-Border E-Commerce Trade, Government Initiatives and Collaboration with Private Players Expected to Drive the UAE CEP Market: Ken Research

Way Forward for Express Delivery Market in UAE: The country seems to be in a perfect position to benefit from the geographical location of the country as a strategic trade hub between three continents. The CEP market is expected to grow at a CAGR of 14.0% in terms of revenue during 2020-2025. With the introduction of new technologies and the backing of the government to increase the efficiency of deliveries, the country seems to be in a great position to benefit from the CEP market.

Moreover, government initiatives focusing on reducing lead time, provision of value added services and organizing events such as Expo 2020 are expected to fuel the CEP deliveries. Introduction of FTZ & SEZ zones would attract more manufacturing industries in the country. The CEP space is formalised by the UAE government as it provides licences to the Courier companies for operation and the granting of licensing to start the operations are based on certain parameters. Furthermore, businesses in this space have been encouraged to upgrade technologically and even bring SMEs into the fold.

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E-Commerce Surge and Use of Sophisticated Technologies Expected to drive the market further: In the past few years, UAE has managed to position itself as one of the fastest-growing E-commerce markets in the world which fares well for the express delivery companies. The growth of E-Commerce and digital payments presents a huge opportunity for companies in the Express Delivery space as only 38%of payments for shipments have been conducted through plastic money. The opening up of logistic hubs has expedited the delivery of shipments to their destinations. Additionally last mile deliveries are expected to become even more efficient with companies focusing on new models such as "click and collect" locations. The use of technologies such as GPS Monitored Robots, Drones, Inbuilt RFID, GPS, IoT, telematics is expected to make inventory management more cost-efficient for the companies.

Long Term Positive Impact of Covid-19: The sudden onset of the pandemic has essentially interrupted and unsettled social and economic activities worldwide. Initially, while the logistics sector as a whole has been affected by global trade slowdown, the sub-sectors like international CEP have witnessed steady growth when compared to others such as freight forwarding, inventory and supply chain management. Consumers moved to online shopping for clothes, groceries and other items which they would usually purchase from brick-and-mortar shops, leading to a surge in B2C shipments. Moreover, 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. Thus, growth in the volume of shipments was witnessed during festive periods. This has led to the clear establishment of more trade lanes and information about new companies for the players in the Express Delivery Market. Companies are continuously investing on technologies to make deliveries more efficient and customized according to the demands of the customer. This trend is only expected to continue in the coming years.

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 ~14.0 % based on the revenue over the forecast period 2020-2025.

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For More Information on the research report, refer to the below link:-

UAE Parcel Delivery Market Growth

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