How is Embedded Financial Technology Moving UAE’s Retail Industry?

Around 70% of small grocery stores in the UAE don’t have a connected point-of-sale (POS) and checkout system, making it difficult for retailers to gain a competitive edge, 24SEVEN unveils.

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  • With the current Spinneys IPO, the operator of premium supermarkets in the UAE and Oman, the retail industry is going to experience a boom, with a forecasted revenue of over $40 billion in 2024. A survey from 24SEVEN revealed that more than 81% of baqalas, traditional small grocery stores or corner shops, dominate the retail market in the region, and 60% of the residents visit them weekly. 

    Although it’s an opportunity for many in the industry, gaining a competitive edge could be a struggle for the ones who are unable to implement technological advancements in their traditional retail operations. 

    What's the struggle of small grocery store owners in the Emirates?

    24SEVEN, a  B2B2C grocery retail platform, serving grocery store owners and operators across 10 cities in the MENAP region, surveyed over 5,000 grocery stores and their consumers in the UAE. Approximately 59% of the consumers say that they shopped at a baqala because it was close to home or work, followed by access to specific products/items (31%), extended opening hours (27%), friendly staff (20%) and a preference to shop local (20%). 

    However, there are a few reasons which could be a hurdle for these small grocery stores to stand out in the market. According to 248SEVEN’s  ‘Inside the Baqala’ report, under 1% of small grocery outlets deploy advanced financial technology in their stores. Whereas, 70% do not have a connected point-of-sale (POS) and checkout system, making it harder to compete with larger players.

    What is embedded financial technology?

    Embedded finance is significantly altering the landscape of when, where, and how individuals engage with financial services, presenting considerable opportunities for non-financial entities to reach a broader market. Remarkably, 88% of companies integrating embedded finance observe heightened customer engagement, while 85% affirm that it aids in acquiring new customers.

    Also Read: Why Do Retailers Need MACH?

    Can embedded financial technology uplift revenues?

    Integrating financial services into businesses can open up fresh revenue streams. The report discovered that if baqalas were able to offer ‘buy now, pay later’ (BNPL) services, it could account for up to $338 million in transactions per year. Consequently, these technological improvements can streamline their operational efficiency for enhanced customer experience as well as catalysed revenue stream by 12%. 

    Take the “buy now, pay later” (BNPL) option, for example, which is gaining significant popularity. BNPL allows customers to make purchases and spread the payments over a predetermined period without incurring interest. Buyers have the flexibility to select from different payment frequencies, like weekly or monthly instalments.

    Other services include loyalty programs and seamless utility bill payment solutions at the nearby local stores that consumers visit. For instance, 42% of Gen-Z consumers (among 18-24-year-olds) said that they desire to have BNPL options at local stores. The similar survey revealed that if the baqalas integrate loyalty and reward schemes in their store, 40% of the visitors would love to avail these options. 

    Emphasising the importance of incorporating embedded financial technology in baqalas, Jarrar Shah, CEO and Co-Founder of 24SEVEN said, ” Modern day baqalas provide an accessible point for groceries and household essentials, but increasingly there is an opportunity for these shopping outlets to cater to a more diverse range of needs. UAE nationals, expatriate residents and tourists, often require additional services beyond typical grocery order, such as remittance, credit options, mobile phone top-ups, utility bill transfers, and payments.”


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