The Middle East and North Africa (MENA) region is experiencing a historic e-commerce boom, with online orders increasing by over 30% in 2024. Fueled by digital transformation initiatives like the UAE’s Digital Economy Strategy and Saudi Arabia’s Vision 2030, logistics and supply chain networks are becoming the cornerstone of the industry’s expansion.
A report by Flowwow and Admitad reveals that MENA’s e-commerce market reached $1.8 billion in 2024, with Saudi Arabia and the UAE leading the region in Gross Merchandise Value (GMV). Online orders in the UAE surged by 7%, while Saudi Arabia saw a 9% increase, both surpassing the MENA average of 5%.
However, this rapid growth comes with both opportunities and challenges for logistics providers. The surge in orders demands enhanced warehousing solutions, last-mile delivery systems, and AI-driven tracking technologies. To meet these demands, companies must invest in automation, regional fulfilment centres, and real-time monitoring.
Dominance of Saudi Arabia and UAE
Saudi Arabia and the UAE remain the dominant players in the MENA e-commerce sector, driven by high consumer confidence, increasing digital adoption, and robust government support. Together, they account for the majority of online transactions, supported by major e-commerce platforms and logistics firms ensuring efficient fulfilment operations.
Other significant players include Kuwait, Turkey, and Egypt, where rising populations and digital adoption have led to notable growth. Emerging markets like Morocco, Pakistan, Qatar, Algeria, and Bahrain are also benefiting from mobile commerce and the development of agile logistics solutions for on-demand deliveries.
Shifting Consumer Behavior
MENA’s consumers are increasingly making higher-value transactions, contributing to rising demand for premium logistics services. The region’s average order value (AOV) grew from $30 in 2023 to $35.6 in 2024, with the UAE leading at $102 per order (up from $89), and Saudi Arabia at $52.5 (up from $49.6).
Among the fastest-growing sectors, online gaming saw a remarkable 32% rise in orders, while B2B services grew by 25%, and fashion by 23%. The UAE, in particular, witnessed a 32% increase in B2B online services and a 30% rise in online gaming, alongside growth in electronics, home goods, and automotive sales.
To keep up with these developments, logistics companies need to design faster, more resilient supply chains that can handle increased orders while ensuring efficient last-mile delivery and reverse logistics capabilities.
Innovative Supply Chain Solutions
The explosive growth of e-commerce in MENA is prompting logistics providers to adopt cutting-edge technologies to enhance efficiency and scalability. Key innovations include:
- Automated Warehousing: AI-driven warehouse management systems that optimize inventory and streamline fulfilment.
- Last-Mile Delivery Optimization: Real-time tracking, drone deliveries, and electric vehicle fleets to improve urban logistics.
- Regional Fulfilment Centres: Distribution hubs in cities like Dubai, Riyadh, and Cairo to reduce delivery times and costs.
- AI-Powered Demand Forecasting: Predictive analytics for managing inventory fluctuations and preventing bottlenecks.
The Booming Gifting Market
One of the fastest-growing segments in MENA’s e-commerce is the online gifting market, which saw a staggering 200% growth in 2024. According to Flowwow, the UAE’s diverse population has driven this rapid expansion. The country has processed over 21,000 orders from more than 13,000 customers, with Dubai leading in average order value at 352 AED ($96). Other major cities such as Ras Al Khaimah, Abu Dhabi, and Sharjah also experienced significant demand.
This sector reinforces the crucial role of logistics providers in ensuring timely and efficient deliveries, especially for time-sensitive gifts.
Challenges and Opportunities Ahead
Despite the impressive growth, MENA logistics providers face significant challenges, such as fragmented markets, complex cross-border regulations, and intricate customs procedures. Sustainability pressures are also growing, with consumers demanding eco-friendly packaging and carbon-neutral shipping options.
Urban congestion in cities like Dubai and Riyadh adds further complexity to last-mile delivery. To address these challenges, logistics companies are exploring micro-fulfilment centres and smart lockers. AI-driven route optimization, partnerships with local couriers, and warehouse automation are among the strategies being implemented to improve efficiency.
Looking to the Future
MENA’s e-commerce market is expected to continue its rapid expansion, driven by ongoing digital transformation and government initiatives. By 2025, the region’s gifting market is predicted to surpass $6 million in Gross Merchandise Value (GMV), reflecting a 300% year-over-year increase.
To stay ahead, logistics and supply chain professionals must invest in technology, automate fulfilment processes, and expand regional networks. Companies that embrace these strategies will be well-positioned to lead MENA’s next phase of e-commerce growth.
