Dubai MSMEs Digital Capabilities Key to Resilience and Growth

The Department of Economy and Tourism (DET) in Dubai and the Visa Economic Empowerment Institute (VEEI) have come together to produce a joint study on the resilience of micro, small and medium enterprises (MSMEs) in Dubai. The paper reveals that embracing digital payments acceptance and expanding the use of social networks, messaging apps and online marketplaces has been vital to the resilience and growth of MSMEs in the region and is a key part of their investment strategy looking forward.

It recognizes the global pandemic as the catalyst which spurred digital adoption across MSMEs, allowing businesses to continue to meet customer demands. With research indicating from August 2019 to 2021 there was a 60 - 70% increase in e-commerce activity.

Drawing on Visa data and information from over 900 surveyed Dubai-based businesses the paper proposes the following key findings characteristic of MSMEs in the region:

• The majority of MSMEs in Dubai experienced growth in 2020 and expect growth in 2021
  
• Sales and employment were most affected by the pandemic
  
• 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 and increased their digital activity across size categories
  
• The main priorities post-pandemic are getting customers back, diversifying products and services, exporting to new markets and digitizing sales channels
  
• Looking ahead, firms plan to prioritize improving their digital capabilities
  

Authors conclude, despite recent challenges, the MSME market is resilient highlighting, “it is… encouraging to see merchants in Dubai — especially those that have embraced digital commerce — feel optimistic about business recovery and growth”, Dr. Saeeda Jaffar, Senior Vice President and Group Country Manager for Gulf Cooperation Council at Visa.

As development of digital capabilities is set to continue to grow in Dubai the findings of the DET-VEEI survey “confirm that digital is the way forward for small and medium enterprises”, CEO of Dubai SME, Abdul Baset Al Janhai.

To explore recommendations and findings and to read the full study “Dubai MSMEs: Digital and resilience” please see the link to the report here.