Growing acceptance of digital payments and expanding use of social networks, messaging apps, online marketplaces were key factors in boosting the recovery and resilience of micro, small and medium enterprises (MSMEs).
This, is according to a joint study conducted by the Department of Economy and Tourism (DET) in Dubai and the Visa Economic Empowerment Institute (VEEI) to assess the resilience of small businesses in Dubai during the COVID-19 pandemic.
A whitepaper that resulted from the study titled ‘Dubai MSMEs: Digital and resilient’ looks at the digital journey of MSMEs in Dubai and draws on Visa data to provide insights into UAE commerce trends.
The report noted that the pandemic led to a surge in e-commerce as business owners moved quickly to fulfill their customers’ demands.
The study surveyed businesses that are actively accepting card-not-present (CNP) payments as an indication of e-commerce activity. For all businesses in Dubai, this percentage increased from 8% in July 2019 to 13% in August 2021, a growth of 60%.
For small businesses, the percentage increased from 7 to 12% over the same period, a growth of 70%. Dubai saw a record 83% YoY increase in the number of eCommerce licenses issued in the first half of 2020.
Abdul Baset Al Janahi, CEO of Dubai SME, an agency of the DET in Dubai, said: “Small and medium enterprises that operate in Dubai enjoy distinctive advantages.
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"The emirate’s constantly evolving enabling ecosystem provides the ideal conditions for SMEs in the emirate to adapt to challenges. This has been a key factor driving their resilience and stability during the pandemic.”
Dr. Saeeda Jaffar, Visa’s SVP and Group Country Manager for GCC region said: “The global pandemic and resulting economic crisis have severely impacted all businesses, with the smallest of firms struggling the most.
"It is therefore encouraging to see merchants in Dubai — especially those that have embraced digital commerce — feel optimistic about business recovery and growth.
“Supporting MSMEs has always been a top priority for Visa and is also the key to economic recovery."
Key findings from the VEEI survey on MSMEs include:
• A majority of MSMEs in Dubai experienced growth in 2020. 43% of the surveyed firms had positive revenue growth in 2020.
• The biggest COVID-19 effects were on sales and employment. For most firms, domestic and international sales and purchases, customer bases, and employment were among the largest segments affected by COVID-19.
• MSMEs adopted new payment capabilities during the pandemic—and transitioned away from some familiar ones.
• MSMEs expanded their use of social networks, messaging apps, and online marketplaces.
• The main priorities MSMEs identified in continuing their recovery is getting customers back, followed by diversifying their products and services.
• Looking ahead, firms plan to prioritise improving their digital capabilities.
Based on the results of the VEEI survey of MSMEs in Dubai, and with a view to increasing collaboration between the public and private sectors, DET and Visa offer the following recommendations to further empower small businesses in Dubai.
• Emphasise digital enablement assistance for MSMEs.
• Keep consumers in mind when driving digital ubiquity in Dubai and elsewhere.
• Prioritise cybersecurity capabilities for small businesses.
• Help small businesses connect to marketplaces and use eCommerce capabilities to export.
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