Businesses in the UAE have adapted during the Covid-19 pandemic by leveraging cross-border opportunities and adopting a digital-first approach, according to a recent study published by UK market research and data analytics firm YouGov in partnership with global digital payments leader PayPal.
The research titled UAE SMB and Freelancer Digital Readiness Survey also highlights barriers to digital adoption and key priorities for freelancers and SMB’s.
Conducted between January to February 2022, the survey analyses the impact of Covid-19 on small businesses, the key verticals of growth, and growing acceptance of digital payments.
The results are based on interviews with 300 UAE-based SMBs and freelancers.
Focus on digital adoption and international expansion
Despite the uncertainty of business longevity going into the pandemic, the survey highlighted that half of the respondents saw a positive impact of the pandemic on their business.
Key factors include an increase in productivity as one in three employees worked from home (33 percent), reduction in overhead costs including travel and real estate costs (32 percent), and the ability to access a global customer base outside of the UAE (31 percent).
These findings demonstrate that businesses have not only been able to sustain growth without the need for a physical space, but have also performed better, with 28 percent of respondents reporting an increase in customer base and 31 percent reporting an increase in customers from outside of the UAE.
Building an owned online presence is a key priority
With a rise in sales, nearly half of respondents are looking to build their own e-commerce website and app in the future or to have a presence through a third-party e-commerce marketplace.
While online has always been a lucrative option, the pandemic has only increased its role in helping businesses grow.
Approximately 28 percent of UAE entrepreneurs have an online business, while close to half the respondents have a presence both online and offline. One in two businesses said that they are likely to increase their online presence in the future.
Among those who have an online presence, 36 percent have their own e-commerce website or an app and a similar proportion have a presence through a third-party platform.
Approximately 43 percent have a presence on social media using clickable ads on Instagram, Snapchat, and the likes.
With the adoption of digitalisation, more than four in ten of the respondents have seen increased purchases through social media channels with more consumers using online payments (39 percent).
With these findings, it is no surprise that a staggering 83 percent are likely to increase their online presence in the future and nearly half of the respondents are looking to have their own e-commerce website or app giving them better control.
The rise of online payment gateways has increased cross-border trade, thus, becoming a business priority for freelancers and SMBs.
A digital-first approach will help both the businesses and consumers as the study shows that the advantages of going digital are:
- Speed of transactions (41 percent),
- Convenience for customers (39 percent)
- Cost savings (38 percent).
Among those who have an online presence and use digital payments, 66 percent claim that it has helped increase their local sales compared to last year.
For 56 percent of the businesses, sales have increased as they were able to reach a global consumer base.
More than 36 percent of the surveyed entrepreneurs use PayPal, behind 49 percent of users opting for ‘cash on delivery’ and 43 percent using online bank transfers.
As more UAE freelancers and SMBs embrace digital, investment into their digital journey has become a key priority.
