UAE retail spending on credit and debit cards increased by 6 per cent compared to 2017, with e-commerce leading with 48 per cent growth, according to a new study analysing consumer spending patterns for 2018. Mashreq Bank analysed data collected by the bank’s merchant-acquiring business, which processes credit and debit card payments at points of sale and represents around 30 per cent of the overall market. "If you are a large merchant or a large retailer here in the UAE, but you are not on the e-commerce bandwagon so far, it is high time that those retailers take a note of the growth that is happening and move their business towards e-commerce," Pankaj Kundra, Mashreq Bank's head of payments, told <em>The National</em>. Last year was also a breakthrough year for contactless payments, with a quarter of all UAE transactions using contactless cards and digital wallets on their smartphones. In terms of sector performance, retail credit and debit card spending growth was driven by food and beverage, which increased by 20 per cent, followed by a 16 per cent growth in supermarket spending. Hospitality had modest growth of 2 per cent. Real estate and government services grew by 34 and 12 per cent respectively, mainly driven by the push towards digitisation of payments, according to the study. The retail segment comprising clothing, shoes and handbags grew by 3 per cent. Health care spending grew 1 per cent. In the e-commerce space, ride-hailing apps such as Careem and Uber grew 12 per cent, while food delivery services, like Zomato and Deliveroo, more than doubled. “A lot of these companies are new on the block,” Mr Kundra said. “They came from a small base, but they are growing extremely fast.” Sectors facing negative growth included electronics and automobiles, which fell by 15 per cent and 9 per cent, respectively. A quarter of card spending in the UAE was made by international travellers, which was up 6 per cent year-on-year. Visitors from Saudi Arabia accounted for 20 per cent of international card spending, followed by China, US, UK, Kuwait, Russia and India. Chinese spending grew by more than 50 per cent in 2018. “The international tourists visiting continue to play a very important role. One in four dollars is coming from international spend,” Mr Kundra said. There was also a sharp jump in the daily average sales volumes during November’s White Friday sale. The daily average sales volumes during the period were 79 per cent higher than the daily average for the rest of the month. The spending was high for both e-commerce merchants and shopping malls, the study said. The Middle East’s e-commerce sector is growing at the fastest pace globally with online sales expected to double to $48.8 billion by 2021, according to a report by Fitch Solutions Macro Research, a unit of Fitch Group. E-commerce spending in the UAE is expected to increase 170 per cent to $27.1bn in 2022, from $9.7bn in 2017.