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UAE Market Opportunities are changing. Here is how...

Even though the UAE has been identified as 'Emerging markets' by MSCI, it demonstrates developed market-like traits. Take for instance, GDP per capita. Here in the chart you can see how well the UAE, KSA and Qatar compare with some of the other developed markets in terms of per capita income.

Source: World Bank, Algorithm Research

On other counts such as ease of doing business, corruption perception index and internet penetration levels, the UAE has scored highly. The World Bank's Ease of Doing Business gauges the business environment on 10 counts including: access to electricity, protecting minority investors, paying taxes, getting credit for your business, time taken to register your business getting construction permits are some of the parameters. UAE ranks within the top 15 on the list of 180 countries.

The GCC countries are digitally savvy too. Of the top 5 countries with the highest internet penetration, 4 are from the Arab world. KSA is at 15 showing remarkable improvement since 2011. More here.

On corruption perception too, the UAE scored 71/100 indicating that the perceived level of public sector corruption is low. The average country score is 43/100 and the highest scoring region of Western Europe and EU scored 66/100. Saudi was at 53 and Qatar at 63. More here.

The other very unique feature of the UAE is that they have small and young population. In the UAE, the population is young, well educated and well traveled. Expats form 85% of the resident population in the UAE. The UAE is gearing up to seeing a near doubling up of its population by 2040. Here is a chart from the Dubai Statistics Center that projects a rise in Dubai's population to nearly 6million by 2040 from 3.5million now.

Entrepreneurship policy will likely be shaping the economy in the UAE in the coming decade. The GCC countries but primarily the UAE has a special focus on entrepreneurship as a driver of GDP growth in the coming decade. The UAE aims to produce 20 unicorns in the next decade and has launched the Entrepreneurial Nation Program to turn this into reality. This program features the biggest public private partnership bringing together accelerators, incubators and funding entities. The UAE has also introduced the Golden visa to attract and retain talent. There is a policy shift from low productivity migrant labor to areas that create more economic activity per capita.

The policy push towards entrepreneurship has given rise to e-commerce startups particularly in the UAE. From grocery delivery to food price comparison to food delivery - all these startups are offering huge discounts to build a loyal customer base. This has been helping the residents in the UAE save and build capital. Our analysis of all google searches made by UAE residents from 2015 till 2021 tells us that the residents have traded up to higher levels of quality and taste. The fairly well educated and well travelled residents of the UAE, even when they address necessities, they want to buy goods that feed into their aspirations for a better life.

In a similar study done on the Saudi market we discovered that the residents are looking at value for money options as they look to expand their sources of income as taxes are introduced into the system, fueling inflation. Unlike the UAE market, in the KSA the entrepreneurship thrust is still in a nascent stage and hence has limited impact on employment opportunities and also consumer savings from e-commerce discounts.

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