Can SMEs Drive UAE’s US$8.7B Vision?
Small and medium enterprises have long been at the centre of the UAE’s economic diversification plans. Today, they make up more than 94 percent of all businesses in the country and contribute over 63 percent to the non-oil GDP. With the government aiming to reach one million SMEs by 2031 — a projected 79.5 percent increase — and backing that goal with US$8.7 billion in investments, the direction is clear: small businesses are not just participants in the economy, they are shaping its future.
This growth is closely tied to the UAE’s mature e-commerce ecosystem and strong mobile penetration. Around 65 percent of shoppers in the country prefer domestic platforms, often citing authenticity, faster delivery, and the emotional connection they associate with buying from local businesses. For SMEs, this shift in consumer behaviour has created new opportunities — particularly during seasonal peaks.
Ramadan remains one of the most significant commercial periods of the year. For many small businesses, it is not just a seasonal boost but the most important demand window. In the gifting sector, momentum begins earlier than many expect. In 2025, growth was already visible from the beginning of February, driven largely by early corporate orders and advance planning. Compared to January, order volumes increased by up to 30 percent, while gross merchandise value (GMV) rose by as much as 40 percent.
By mid-February, the trend accelerated sharply. In just the first two weeks, order numbers climbed by 173 percent, and GMV increased by 195 percent. Over the full Ramadan period, online sales of local brands in the UAE grew by 203.7 percent, while the number of gift sales rose by 152.8 percent compared to the same period in 2024.
What stands out is not only the scale of growth, but the type of products driving it.
Ramadan has always been associated with thoughtfulness and cultural sensitivity. Increasingly, consumers are choosing local businesses — independent gift shops, artisans, and handicraft makers — that understand these nuances. Personalisation and authenticity have become deciding factors, especially in gifting.
During Ramadan 2025, Flowwow recorded a noticeable rise in demand for locally made and personalised products. Florists saw a 40 percent increase in sales. The sweets and treats category grew by 57 percent, with particularly strong demand for handmade Arabic sweet sets (+108.3 percent), confectionery and pastries (+103.3 percent), and edible bouquets (+99.1 percent).
These are not just commercial categories; they are culturally embedded. Hampers, premium dates, traditional sweets, and curated food boxes naturally become part of family gatherings and iftar tables. For many households, these items are as much about tradition as they are about convenience.
For sellers, the impact goes beyond individual and corporate gifting. Ramadan also drives household consumption patterns. As more families host gatherings, spending on authentic hampers and food sets increases. Religious traditions and social customs reinforce demand across the month.
Sara Riadh, Creative Director at Casa Pons, a premium gourmet brand and Flowwow seller, describes Ramadan as a defining period for the industry. “Ramadan is a major season for us, as we are a luxury specialty store offering dates, Arabic sweets, dried fruits, and more. It truly drives our entire industry forward. Year over year, we see at least a 50 percent increase in sales, while categories like gift baskets and hampers are usually nearly selling out. These products are a perfect fit due to their cultural relevance and inclusivity.”
The daily rhythm of Ramadan also reshapes online behaviour. While daytime activity slows, shopping shifts to post-iftar hours. According to a Ramadan study by YouGov, overall shopping activity grows by 46 percent during the holy month, with groceries, daily essentials, and gifts ranking as top priorities at 57 percent and 48 percent respectively.
Affiliate marketing platform Admitad recorded a similar pattern in 2025, noting a 20 percent increase in GMV across the UAE compared to Ramadan 2024. Spending was not limited to food and gifting. Consumer budgets were distributed across fashion (22 percent), electronics (15 percent), home essentials (14 percent), car-related products (9 percent), children’s products (6.8 percent), and beauty (5.7 percent). Nearly half — 47 percent — of online orders were placed via mobile devices, underlining the importance of mobile-first strategies for SMEs.
In a competitive environment, small and local businesses often hold an advantage that larger players struggle to replicate. Many have a closer understanding of multicultural preferences and can adapt offerings quickly to meet culturally specific needs. During a month defined by connection and community, this flexibility matters.
For brands looking to stand out, timing and relevance are key. Campaigns need to reflect the shift toward evening engagement, and messaging must feel culturally aware rather than generic. Consumers are increasingly responsive to thoughtful communication and curated offerings.
Based on trends observed in 2025 and early demand signals this year, Flowwow expects overall GMV to double during the upcoming Ramadan period, with demand for curated hampers and food-related categories projected to grow by around 70 percent.
As the UAE continues investing in its SME ecosystem and as consumers show a consistent preference for culturally authentic experiences, small businesses are likely to play an even more central role in shaping the Ramadan economy. For many SMEs, the holy month is no longer just a seasonal opportunity — it is a strategic anchor for the year ahead.
