Saudi Arabia, the country with an e-commerce sector still to mature

Saudi Arabia is one of the countries where e-commerce is still in its early stages of development. However, studies show that this will change and growth in this channel market could potentially generate 50 million Saudi riyals.

Saudi Arabia in terms of e-commerce has become the leader in the Gulf in terms of growth and size. Last year, Saudi Arabia increased revenues from the e-commerce sector by 17% reaching 8,000 million dollars. The sectors with the highest sales are feeding (68%), clothing (73%) or medicines (65%). In addition, 58% of Saudi consumers stated that they prefer to shop online rather than in-store; a very relevant fact for brands that want to expand into new markets.

The interest in the e-commerce sector in the country lies mainly in the type of population it has. 60% of the population is under 30 years oldwhich predisposes them to adopt eCommerce as a regular means of purchase.

Consumers have changed their habits after the pandemic

The Saudis have not been big online consumers, however, online consumption in recent years with the pandemic has grown considerably. This has been accompanied by major changes in consumer behavior.

Google and Kantar conducted a study entitledSmart Shopper that talks about purchasing behaviors during the pandemic. In this they highlight that the main reasons that have driven consumers to buy online are: convenience, home delivery, price and availability.

The study also reflects some of the aspects that e-commerce in the country have to work on, since many consumers complain of finding themselves with a lack of information about products, slow customer service or even lack of availability of payment methods.

Payment methods in Saudi Arabia

Government support for e-commerce has been steadily growing during the pandemic. This made In October 2020, the Electronic Commerce Law, to delve into eCommerce and regulate it. One of the regulations is directly related to the payment sector, with the aim of implementing a new mechanism for interbank transfers, and has made it possible to speed up the processing of payments between local banks and strengthen the electronic commerce industry.

The country’s consumers, unlike elsewhere, place great importance on local banks, according to a report published by PPRO. So much so that the most used payment method is cards with 41%, but the largest percentage within this does not belong to the cards known worldwide. In addition, as shared in a study McKinsey & CompanyBetween February 2019 and January 2020, payment with cards grew by more than 70%.

The next most used payment method is cash with 17%, a not very high percentage although it is striking for having the second position. The third most used payment method are e-wallets (16%), followed by others (15%) and, finally, there are bank transfers with the lowest percentage, only 11%. A payment method that in other countries has great relevance.

What are the most famous e-commerce in Saudi Arabia?

The biggest player in the Saudi Arabian e-commerce market is namshi.coma platform for the sale of clothing and accessories that had a turnover of 153 million US dollars in 2021. Although the company emerged in the United Arab Emirates in 2011, and this is its main market.

Second on the list is, who is not surprised to find himself on the list, but it is not surprising that he is not in first place. The American marketplace manages to obtain revenues of 124 million dollars in the country. is a company that was born in Riyadh in 1974 as a small bookstore and is now considered the market leader in the Middle East for consumer IT products, electronics, office supplies and books. The platform occupies the third position with US$105 million.

The last two companies on the TOP5 ecommerce list in Saudi Arabia are Y The first store emerged in the Kingdom of Saudi Arabia in 2003 and sells a wide range of products that includes televisions, computers or even mobile phones, they have managed to have a turnover of 80 million and more than 12 million buyers. The second store is a marketplace that sells all kinds of products in the Middle East, its turnover reaches 68 million dollars.

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