AI is rapidly reshaping e-commerce and retail in the Gulf, transforming how consumers shop and how businesses operate. Shoppers are embracing virtual try-ons, AI-powered chatbots, and personalised recommendations, while retailers are leveraging the technology to optimise logistics, refine media strategies, and deliver more efficient, tailored experiences.
From Personalisation to Platform Transformation
The Gulf’s e-commerce sector is moving quickly from digital convenience to fully AI-driven commerce. According to Adyen’s 2025 Annual Retail Report, 70% of UAE consumers now use AI in shopping — a 44% increase from 2024 — while 62% remain open to using it in the future.
Beyond recommendations, AI is powering supply chain decisions, inventory optimisation and marketing campaigns. Platforms such as Noon and Amazon predict customer preferences to create tailored shopping journeys, while Talabat, HungerStation, and Careem deploy predictive algorithms to refine delivery routes and manage dark store operations. Carrefour UAE integrates AI into app search and voice queries, enabling more intuitive product discovery.
At the same time, AR shopping allows customers to virtually try furniture, fashion, or beauty products, boosting engagement and reducing returns. Voice commerce is gaining traction with Arabic-dialect agents managing orders and customer service. Flexible payment options such as Buy Now, Pay Later are streamlining checkout across the UAE and Saudi Arabia. Collectively, these innovations are reshaping both customer experience and the operating foundations of retail across the region.
Towards AI Commerce Assistants
Consumers already rely on AI for product research, but adoption is deepening. Microsoft’s latest findings show shoppers are beginning to use AI to complete purchases. Instead of manually browsing platforms like Amazon or Talabat, a consumer might ask an assistant: “I’m making chicken quesadillas for four tonight, find me the best deals.” The AI compares stores, factors in preferences, lists ingredients with prices, and builds a cart with direct links from retailers like Carrefour, Spinneys, LuLu, Noon, or Amazon for checkout.
The next step is “AI commerce assistants” that manage the entire journey — from building carts to processing payments and scheduling re-orders. While payment security, encryption, permissions and retailer–bank partnerships are prerequisites, this future is approaching quickly.
Business Impact and Logistics Innovation
AI’s influence extends beyond the customer journey to business performance. According to Talabat Corporate, Q1 2025 gross merchandise value rose 30% to US$2.1 billion, revenue climbed 34% to US$846 million, and net income nearly quadrupled to US$103 million, representing 4.9% of GMV. AI-enabled coordination across its 65,000 delivery partners has pushed order success above 99% and average delivery times under 30 minutes.
Meanwhile, Noon founder Mohamed Alabbar told the Financial Times that the company plans to lease autonomous delivery vehicles to cut costs, aiming to halve driver numbers by 2027. These shifts show how AI is not only elevating the customer experience but also redefining the economics of retail platforms.
Trust, Talent, and Regulation
Rapid adoption does not eliminate the obstacles to AI at scale. Talent shortages remain a critical bottleneck, with skilled AI professionals in high demand. Many retailers struggle with data management — collecting, cleaning and analysing information effectively. Consumer trust and privacy are ongoing concerns, while regulatory uncertainty adds complexity for businesses deploying AI solutions. Bridging these gaps with skilled talent, robust ethical frameworks and resilient data infrastructure will be crucial for sustaining innovation in the GCC.
The Horizon of Commerce
AI is redefining retail at every level, but the biggest shifts are still ahead. Today’s advances in personalisation, predictive logistics, AR experiences and automated payments are only the starting point.
Search, too, is on the cusp of disruption. For more than two decades, engines and SEO determined how brands were discovered online; now AI-driven, conversational discovery is rewriting those rules. The challenge for retailers is no longer simply visibility, but whether their products surface at all in AI-led search.
In the coming years, we are likely to see autonomous shopping assistants, seamless integration of physical and digital marketplaces, and predictive commerce that anticipates needs before consumers articulate them.
The journey of shopping itself is being rewritten. For Gulf retailers and brands, the opportunity is not simply to adopt AI tools, but to invest in the talent, trust, and infrastructure that will unlock their full potential. Those who move with foresight and purpose will shape the next era of retail across the region.
