Release date: Sunday, August 18, 2024, 5:36 PM
Last updated: Sunday, August 18, 2024, 5:37 p.m.
In a world where online shopping carts double as personal wish lists, a curious phenomenon has arisen: gifting oneself. The allure of a sleek gadget, a soft cashmere sweater, or an artisanal chocolate truffle is too tempting to resist. With just a click, you can become both Santa and gift recipient, wrapping a little joy in your own soul.
Why is self-gifting on the rise? Maybe the lingering stress of the pandemic is encouraging us to treat ourselves kindly. Or maybe it’s the thrill of picking up a bargain. Whatever the reason, self-gifting is no longer a dirty secret, but an act of self-love. And the trend is filling the coffers of online players, too.
In the UAE, growing consumer interest in self-care and robust economic development have led to a 15 percent increase in gift-giving for one. Forecasts show that the UAE’s gift market is expected to grow at a CAGR of 14.7 percent through 2029, while the overall e-commerce market is expected to grow at an annual rate of 8.63 percent, reaching a market value of $10.56 billion by 2029.
According to experts, the phenomenon of gifting yourself can be a form of self-care in an increasingly stressful and fast-paced world. People give themselves gifts for hard work, achievements, or simply to boost their mood. At the same time, buying yourself a gift can also be an expression of independence, self-sufficiency, and financial security, since the choice of gift is entirely based on one’s own preferences and desires.
Flowwow, a marketplace for locally branded gifts across more than 30 countries, recorded a 15 percent year-on-year increase in gifting for oneself by UAE consumers in the first half of 2024. Notably, 44 percent of those buying gifts for themselves cited “mental health,” “happiness,” and “independence” as their primary motivations. The most popular gift categories for gifting for oneself were custom-made bouquets (+38 percent), balloons (+29 percent), and flower boxes (+26 percent). Handmade chocolates and bento cakes were less popular.
The booming e-commerce scene
According to statistics from Admitad, a partnership marketing platform, the UAE is one of the most active markets in the MENA region, with online orders growing by 6% in the first half of 2024 and gross merchandise value (GMV) growing by 12% compared to the same period in 2023. The average transaction value in the UAE rose from AED 344 to AED 433.
Flowwow, in partnership with Admitad, has released the results of its latest e-commerce market research in the Middle East and North Africa (MENA) region for the first half (H1) of 2024.
The top three countries in the MENA region by order volume in the first half of 2024 were Saudi Arabia, the UAE, and Algeria, with Morocco coming in a close second. Saudi Arabia led the way with the highest order growth rate of over 20%, while domestic sales volume surged by more than 25%. Morocco also saw a strong increase in GMV of 23%.
Seasonal variation
Seasonal trends show sales spikes in February, March and April in conjunction with Valentine’s Day, Ramadan celebrations and Eid Al Fitr, while sales generally follow a stable pattern throughout the summer.
March, the start of Ramadan, also saw a peak, but was slightly down 25% from February. Despite the overall growth, the average transaction value in March was 25% lower compared to March 2023, due to discounts and special promotions.
Analysis of average gift spending in the UAE for the first half of 2024 revealed significant fluctuations. Average spending in January increased by 9.7% compared to February. The upward trend continued in February, with average spending rising 8.8% by March to reach a peak of AED 159. However, there was a sharp decline of 11.9% in April. A slight recovery was seen in May with an increase of 1.3%, but by June average spending had fallen again by 5.5%.
Slava Bogdan, CEO and co-founder of Flowwow, said: “The e-commerce landscape in the UAE and MENA region is booming, fuelled by the rise of mobile commerce, technological advancements, diversifying shopping opportunities and growing demand for convenience and same-day delivery. This upward trend is expected to continue as e-commerce companies leverage technology and consumer data insights to provide personalized, seamless and user-friendly experiences that cater to evolving customer preferences.”
Mobile Commerce
Mobile shopping continues to trend upward, with the share of purchases made via smartphone increasing from 36% to 39% in the first half of 2024. Saudi Arabia led the region with more than 60% mobile orders, followed by the UAE at over 50%. Turkey had the lowest share of mobile orders, below 20%.
“The impressive growth of e-commerce across the MENA region highlights the resilience and growing appetite of people to shop online. The data shows a significant increase in both transaction volume and value, fuelled by the region’s vibrant holiday calendar and the ongoing shift towards mobile commerce. These trends highlight the potential of the region’s dynamic market and the growing importance of digital platforms in driving economic activity,” said Anna Ghdirim, CEO of Admitad.
By product category, the most popular products in the MENA region in the first half of 2024 were Electronics (21.5%), Fashion (20%), Household Goods (18.4%) and Automotive & Motorcycle Products (8%). The “Tools” category saw the largest increase in orders, growing by 25%, followed by “Toys & Hobbies” (+16%) and “Automotive & Motorcycle Products” (+14%).
The Middle East’s e-commerce sector is expected to reach $50 billion by 2025, driven by the region’s young, tech-savvy population and rising disposable income. At the same time, EZDubai reported that the total size of the UAE’s e-commerce market is projected to reach AED 27.5 billion in 2023 and exceed AED 48.8 billion by 2028.
The importance of this trend cannot be overstated, as e-commerce continues to experience strong growth in the UAE and the MENA region, driven by technological advancements and a younger, digitally savvy demographic. The region’s expansion highlights a bright future for consumers and businesses alike, with gifting for yourself emerging as an indicator of changing preferences in today’s market.