Can SMEs Sustain the Ramadan Surge?
Small and medium enterprises have long been described as the backbone of the UAE’s economy — and the numbers support that. SMEs account for more than 94 percent of 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, backed by US$8.7 billion in investments, the direction is clear: the future of the UAE’s economic diversification rests heavily on its small business community.
What’s equally important is how consumers are responding. Around 65 percent of shoppers in the UAE prefer domestic platforms, valuing authenticity, speed, and the personal touch that smaller businesses can offer. This preference becomes especially visible during key seasonal moments — and Ramadan is one of the most telling examples.
Ramadan as an Economic Window for SMEs
For many SMEs, Ramadan is not just a religious season; it’s the most significant demand cycle of the year.
In the gifting sector, momentum begins earlier than many expect. This year, noticeable growth started as early as the beginning of February, driven largely by corporate pre-orders and early preparations. Compared to January, order volumes rose by up to 30 percent, while gross merchandise value increased by as much as 40 percent.
By mid-February, that pace accelerated sharply. In just the first two weeks, order numbers climbed by 173 percent, with GMV rising by 195 percent. Over the full Ramadan period, online sales of local UAE brands grew by 203.7 percent compared to the same period in 2024. Gift sales alone increased by 152.8 percent.
These figures highlight something many SME owners already know: Ramadan compresses months of demand into a short, high-intensity window.
Why Local Brands Benefit Most
Ramadan has always been associated with authenticity, generosity, and thoughtfulness. Increasingly, that’s translating into consumers choosing local and independent businesses — especially for gifting.
Shoppers are turning to artisan florists, handmade confectioners, specialty food sellers, and independent gift shops that understand cultural and religious nuances more closely than mass retailers.
During Ramadan 2025, Flowwow reported a clear rise in demand for personalised and culturally relevant products:
Flowers increased by 40 percent.
Sweets and treats grew by 57 percent.
Handmade Arabic sweets sets rose by 108.3 percent.
Confectionery and pastries grew by 103.3 percent.
Edible bouquets increased by 99.1 percent.
These categories are culturally meaningful and easy to personalise, making them suitable for both corporate gifting and family exchanges.
Beyond formal gifting, traditional sweets and curated hampers have become part of the Ramadan experience itself. With more family gatherings and shared iftars, food boxes and premium hampers are not just gifts — they’re additions to the table.
Sara Riadh, Creative Director at Casa Pons, a luxury specialty store offering dates, Arabic sweets, and dried fruits, describes Ramadan as a defining season for the business. According to her, year-over-year sales increase by at least 50 percent, with gift baskets and hampers often selling out entirely. For specialty food retailers, Ramadan effectively drives the entire year’s momentum.
A Shift in Shopping Behaviour
Ramadan also reshapes how and when people shop.
Daytime retail activity tends to slow, while demand peaks after iftar. According to YouGov’s Ramadan study, overall shopping activity increases by 46 percent during the holy month. Groceries and daily essentials top the list at 57 percent, followed by gifts at 48 percent.
Admitad’s 2025 data shows a similar pattern, with a 20 percent GMV increase across the UAE compared to Ramadan 2024. Consumer spending extended beyond Ramadan-specific categories as well, distributed across:
Fashion (22 percent)
Electronics (15 percent)
Home essentials (14 percent)
Car-related items (9 percent)
Children’s products (6.8 percent)
Beauty (5.7 percent)
Mobile commerce continues to play a central role, with 47 percent of online orders coming from mobile devices. For SMEs, this reinforces the need for mobile-optimised storefronts and well-timed post-iftar campaigns.
Structural Advantages for SMEs
In a competitive market, small businesses often hold advantages that are difficult to replicate. Many local sellers have a deeper understanding of multicultural preferences within the UAE. They can adapt packaging, messaging, and product offerings to suit cultural sensitivities and religious context.
Ramadan rewards this flexibility.
Brands that align their communication with the daily rhythm of the holy month — especially post-iftar engagement — and focus on meaningful, culturally aware campaigns tend to capture the most demand.
Looking Ahead
Based on 2025 performance and early signals this year, Flowwow projects at least a twofold increase in overall GMV during Ramadan, with demand for curated hampers and food-related items expected to grow by around 70 percent.
As the UAE continues investing in its SME ecosystem and consumers increasingly prioritise authenticity, small and medium enterprises are likely to play an even larger role in shaping future Ramadan seasons.
For SMEs, Ramadan is more than a seasonal spike. It is a reflection of how culture, community, and commerce intersect — and how local businesses continue to anchor that connection.
