UAE Buy Now Pay Later Industry Outlook to 2027

Driven by adoption of cashless society, increasing Genz & millennials population coupled with shifting preference towards easy interest free extra credit line sources

Region:Middle East

Author(s):Arunesh, Anchal

Product Code:KR1195

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Published on

September 2022

Total pages

119

Table of Content

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About the Report

About the Report

The publication titled “UAE Buy Now Pay Later Industry Outlook to 2027: Driven by adoption of cashless society, increasing Genz & millennials population coupled with shifting preference towards easy interest free extra credit line sources” provides a comprehensive analysis of the Buy Now Pay Later industry in UAE. The report covers various aspects including BNPL industry market size on the basis of revenue, number of transactions and average order value, market overview, Key Features and Development in UAE Buy Now Pay Later Market, How a Buy Now Pay Later Transaction Happen, ecosystem of entities in the UAE BNPL industry, growth drivers, restraints and challenges, major trends and developments, Overview of Global BNPL Industry, Presence of BNPL Players Across Globally, Disruptors of Credit card Globally, Porter’s Five Force Analysis of the UAE Buy Now Pay Later Market, Issues and Challenges in the UAE Buy Now Pay Later Market , SWOT Analysis, Role of Government and Regulations in the UAE Buy Now Pay Later Industry, and Impact of COVID-19. Insights on competitive landscape of BNPL industry, company profile of major BNPL players operating in the ecosystem on the basis of Operational and Financial Parameters, Company Overview, Business Strategy, Marketing Strategy, Recent Developments, Key Partnerships, Key Fitness Partners, Product Portfolio, Key collaboration, Cost Structure and Challenges is also covered in the report. The report also covers analysis of demand side on the basis of Adoption Rationale of Consumers towards Buy Now Pay Later Services ,Cross Comparison of BNPL players on major decision making parameters for brand preference, Consumer Persona Analysis. Further report also focuses on the UAE Buy Now Pay Later Market Segmentation by Mode of Payments (Online vs Offline), by Type of End User (Ecommerce Retail, Consumer Electronics, Food Aggregators and Travel Aggregators), By Geography (Dubai, Sharjah and Abu Dhabi), By Age Group of Consumers,( 15-30 years, 30-40 years, 40-50 years, above 50 years). UAE BNPL Market report concludes with projections for the future of the industry including forecasted industry size by revenue by 2027, and analysts’ take on the future highlighting the major opportunities.
 
UAE Buy Now Pay Later Industry

UAE Buy Now Pay Later Market Overview and Size

UAE BNPL market expanded with substantial growth in between 2017 and 2022 with massive expansion in the adoption of BNPL as the mode of payment due to rising industry valuation, trend of contactless payments and the emergence of BNPL lending startups going beyond the typical BNPL card issuance model. The primary factors driving the market growth is the emergence of instant payment anytime and anywhere, rising internet penetration in the country, growing awareness among the users, controlled, secured and efficient transactions with convenience of use and a highly rewarding experience provided by the market players to their users.  Several startups and global BNPL players are offering their innovative products and deferred payment services for consumers in the UAE. Moreover, the adoption from merchants is also on the rise as more and more consumers are demanding the BNPL payment method for both in-store as well as online purchases.

These payments are assisted by advanced technology and are, therefore, quick, simple and convenient. On the other hand, consumers too are increasingly being drawn to digital payments due surging adoption of contactless payments post COVID-19 which is also contributing in the growth of BNPL market by increasing their userbase.
In the UAE, the global pandemic has resulted in a shift in consumer spending habits and accelerated adoption of online shopping platforms. This shift in the overall consumer behavior, along with the rise of digital payment solutions, is resulting in buy now, pay later (BNPL) becoming one of the fastest-growing payments methods in the country.

As more and more people across India, including people in rural areas, use smartphones, they get increasingly exposed to digital payment modes. Gen-Zs and millennials are already comfortable with using them as they grew up with technology.  Merchants are linking themselves to new-age online payment gateways to allow more and more consumers to access and shop for their products easily. Thus, as digital payment modes are forming the bridge between multiple consumers and merchants, they’re undergoing exponential growth. As the digital payments landscape continues to evolve in the UAE, BNPL firms along with global payment giants are launching innovative, first-of-its-kind shop anywhere BNPL schemes.In November 2021, Postpay, a BNPL platforms in UAE, entered into a strategic collaboration with the Commercial Bank of Dubai and Mastercard. The firm has partnered strategically to launch the region's first-of-its-kind shop anywhere BNPL scheme, with the aim to drive digital payments growth in the UAE. The shop anywhere BNPL scheme allows consumers to purchase online or in-store at thousands of physical stores, such as Decathlon, GAP, Level Shoes, Ace, Apple, Azadea, H&M, Home Center, Mumzworld, Sephora, Sharaf DG, Shein, and Zara.
 

UAE Buy Now Pay Later Market Segmentation

By Mode of Payments (Online and Offline): BNPL market in UAE can be segmented on the basis of mode of payment: Online and Offline where number of BNPL transactions done online accounted for the highest market share as compared to the offline ( instore payments) on the basis of revenue generated in the year 2022.

By Type of End User (Ecommerce Retail, Consumer Electronics, Food Aggregators and Travel Aggregators):
 Buy Now Pay Later market can be segmented on the basis of type of end userEcommerce Retail, Consumer Electronics, Food Aggregators and Travel Aggregators.
 A major chunk of the revenue share is captured alone by Ecommerce Retail in UAE in 2022 due to incorporation of e-commerce in major segment of daily life activities during the phase of Covid-19.

By Geography (Dubai, Sharjah and Abu Dhabi):
 Buy Now Pay Later market can be segmented on the basis of geography which generated maximum revenue by BNPL transactionsDubai, Sharjah and Abu Dhabi. A major chunk of the revenue share is captured alone by Dubai in UAE in 2022 due to presence of most of the BNPL players in this region with their registered office present in Dubai.

By Age Group of Consumers, (15-30 years, 30-40 years, 40-50 years, above 50 years): 
Buy Now Pay Later market can be segmented on the basis of age group: 15-30 years, 30-40 years, 40-50 years and Above 50 years. 30-40 years of age group accounts for highest market share for using BNPL services in the country in 2022. This is attributed to the increasing working age population which is gradually shifting from credit cards to BNPL as mode of payments.
 

Competitive Landscape in UAE Buy Now Pay Later Industry

Traditionally, UAE BNPL Industry is dominated by few major players in the country such as Tabby, Tamara, Spotii, Cashew, Postpay among others. As the competition continues to intensify in the UAE BNPL market, firms are developing new products and features such as virtual prepaid cards. In September 2021, UAE-based Spotti, which was acquired by global BNPL platform Zip in May 2021, announced that the firm had entered into a strategic alliance with the Abu Dhabi Islamic Bank. Under the collaboration with the Abu Dhabi Islamic Bank, Spotti launched the first virtual BNPL prepaid card in the UAE. The card will allow consumers to make both online as well as in-store purchases with merchants in the country. Spotti users can use their mobile app to load money on their virtual BNPL prepaid card to fund cost-free installment payments.
 

UAE Buy Now Pay Later Market Future Outlook and Projections

UAE BNPL market is expected to expand with a single digit CAGR in between 2022 and 2027 on the basis of revenue generated. It is anticipated that BNPL industry will grow at a substantial rate owing to factors such as due to wider acceptability at shops and better product offerings in a competitive landscape in the coming years. UAE has been culturally conservative towards BNPL and it is always seen as a debt trap instrument. But new-age start-ups are very focused on changing this mentality by creating awareness about how BNPL can be used for daily expenditure. Many new FinTechs will be entering the UAE BNPL  space by offering BNPL cards to individuals and corporates. All the BNPL Players in this space are trying to attract customers through their digital offerings and will witness significant growth in new BNPL customers in the coming years. BNPL Players are also focusing on bringing out co-branded cards with features and rewards dedicated to a segment. Some global players are providing best-in-class BNPL solutions with the latest mobile application features such as digital onboarding, enhanced UX/UI, single click payment, QR, token-based payments, dispute resolution, in-app support and spend analysis. Traditional players need to take a cue from these players to enhance their offerings in the coming future. Players in this sector need to focus more on building the omnichannel ecosystem to cater to both the offline and online market.

Products

Products

Key Target Audience

  • BNPL Service providing Players
  • New Gen BNPL Cards Players
  • Traders Loan EMI BNPL Cards Players
  • Banking Institutions Payment System Operators
  • Regulatory Bodies
  • FinTech’s
  • Various International Digital Lending Platforms and Players
  • New Entrants in BNPL Space
  • Potential BNPL Users


Time Period Captured in the Report:

  • Historical Period: 2019-2022
  • Forecast Period: 2023-2027F


Companies

Key Segments Covered in UAE Buy Now Pay Later Industry

UAE Buy Now Pay Later Market

By Mode of Payments

  • Online
  • Offline

By Type of End User

  • Ecommerce Retail,
  • Consumer Electronics,
  • Food Aggregators
  • Travel Aggregators


By Geography

  • Dubai,
  • Sharjah
  • Abu Dhabi


By Age Group of Consumers,

  • 15-30 years
  • 30-40 years
  • 40-50 years
  • Above 50 years


Adoption Rationale of Consumers towards Buy Now Pay Later Services

  • Cross Comparison of BNPL players on major decision making parameters for brand preference
  • Consumer Persona Analysis

UAE Buy Now Pay Later Industry Players/Ecosystem

BNPL Players (Supply Side)

  • Tabby
  • Tamara
  • Spotii
  • Aramex
  • Afterpay
  • Rise
  • Cashew
  • Postpay
  • Souqalmal


Lifestyle Merchants (Demand Side)

  • Amazon
  • SHEIN
  • The Body Shop
  • Adidas
  • Actan
  • Swarovski Ebrahim Shop
  • Babytonia


Food Merchants (Demand Side)

  • Healthy life
  • Golden Tamper
  • Karam Alnakhil
  • Mawared


Payment System Operators

  • Simpl SamsungPay
  • Apple Pay
  • VISA
  • Payit
  • Mastercard
  • Gpay

Table of Contents

Table of Contents

1. Executive Summary

1.1. How is Buy Now Pay Later Industry Positioned in UAE?

2. UAE Buy Now Pay Later Market Overview

2.1. How is Buy Now Pay Later Industry Positioned in UAE?

2.2. Overview of Global BNPL Industry

2.3. Presence of BNPL Players Across Globally

2.4. Disruptors of Credit card Globally

3. Market Overview of Buy Now Pay Later Industry in UAE

3.1. Key Features and Development in UAE Buy Now Pay Later Market

3.2. How a Buy Now Pay Later Transaction Happens

3.3. Key Trends of UAE Buy Now Pay Later Industry

3.4. Operating Model of Electric Vehicle Industry Ecosystem of Major Entities in Buy Now Pay Later Industry in UAE

4. Market Size of Buy Now Pay Later Industry in UAE

4.1. Market Size of Buy Now Pay Later in UAE on the basis of Revenue, 2019-2022

4.3. Market Size of Buy Now Pay Later in UAE on the basis of Number of Transactions, 2019-2022

4.4. Market Size of Buy Now Pay Later in UAE on the basis of Average Order Value, 2019-2022

5. Market Segmentation of Buy Now Pay Later Industry in UAE

5.1. Market Segmentation by Mode of Payments, (Online and Offline), 2019-2022

5.2.Market Segmentation by Type of End User, (Ecommerce Retail, Consumer Electronics, Food Aggregators and Travel Aggregators), 2019-2022

5.3 Market Segmentation By Geography, (Dubai, Sharjah and Abu Dhabi) 2019-2022

5.4. Market Segmentation By Age Group of Consumers,( 15-30 years, 30-40 years, 40-50 years, above 50 years) 2019- 2022

6. Industry Analysis

6.1. Growth Drivers of UAE Buy Now Pay Later Market

6.2. Porter’s Five Force Analysis of the UAE Buy Now Pay Later Market

6.3. Trends and Developments in UAE Buy Now Pay Later Market

6.4. Issues and Challenges in the UAE Buy Now Pay Later Market

6.5. SWOT Analysis of UAE Buy Now Pay Later Market

6.6. Role of Government and Regulations in the UAE Buy Now Pay Later Industry

6.7. Impact of COVID-19

7. Demand Analysis

7.1. Adoption Rationale of Consumers towards Buy Now Pay Later Services

7.2. Cross Comparison of BNPL players on major decision making parameters for brand preference (Onboarding Process, Ease of Use, Brand Image, Issues by Customers, Customer Rating, if applicable (Google play Play Store/Apple App Store), Customer Praise Points)

7.3. Consumer Persona Analysis

8. Competitive Analysis

8.1. Investment Analysis of Major Players in the BNPL Space from 2016 to 2021 (Total Funding Amount, Funding Rounds, Investors, Mergers or Acquisitions)

8.2. Detailed Investment Analysis of Major Players in the BNPL Space from 2019 to 2022 (Money Raised (In Million Dollars), Number of Investors, Lead Investors)

8.3 Company Profile of Tabby (Operational and Financial Parameters, Company Overview, Business Strategy, Recent Developments, Key Partnerships, Key Investors, Product Portfolio, and Challenges)

8.4. Company Profile of Spotii (Operational and Financial Parameters, Company Overview, Business Strategy, Recent Developments, Key Partnerships, Key Fitness Partners, Product Portfolio, Cost Structure and Challenges)

8.5. Company Profile of Tamara (Operational and Financial Parameters, Company Overview, Business Strategy, Recent Developments, Key Partnerships, Key Collaboration, Product Portfolio, and Challenges)

8.6. Company Profile of Cashew (Operational and Financial Parameters, Company Overview, Business Strategy, Marketing Strategy, Recent Developments, Key Partnerships, Key Fitness Partners, Product Portfolio, Unique Operational Parameters and Challenges)

8.7. Company Profile of Postpay (Operational and Financial Parameters, Company Overview, Unique Selling Propositions, Marketing Strategy, Recent Developments, Key Partnerships, Key Fitness Partners, Product Portfolio, Key Collaboration and Challenges)

9. Future Outlook and Projections of the Industry, till 2027

9.1. Future Market Size of Buy Now Pay Later in UAE on the basis of Revenue, 2022-2027E

9.2. Future Market Size of Buy Now Pay Later in UAE on the basis of Number of Transactions, 2022-2027E

9.3. Future Market Size of Buy Now Pay Later in UAE on the basis of Average Order Value, 2022-2027E

9.4. Future Market Segmentation by Mode of Payments, 2022-2027E

9.5. Future Market Segmentation by Type of End User, 2022-2027E

9.6. Future Market Segmentation by Geography, 2022-2027E

9.7. Future Market Segmentation by Age Group of Consumers, 2022-2027E

10. Analyst Recommendations

11. Industry Speaks

12. Research Methodology

12.1. Market Definitions and Assumptions

12.2. Abbreviations

12.3. Market Sizing Approach

12.4. Consolidated Research Approach

12.5. Understanding Market Potential through In-Depth Industry Interviews

12.6. Primary Research Approach

12.7. Limitations and Future Conclusion

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