The Future of E-Commerce in Saudi Arabia: Trends and Growth Predictions

According to what was published by (Mastercard) on its electronic newspaper in 2014, about 50% of the population of the Kingdom of Saudi Arabia use credit cards to buy travel tickets, book hotels, and buy electrical and household appliances. Today, Saudi Arabia ranks 27th for e-commerce with profits of 7.7 billion US dollars in 2021 alone! E-commerce in Saudi Arabia is expected to take over the future of commerce as a whole if challenges are met smoothly and the following points are used intelligently and skillfully:

1. Population distribution

13.9 million people out of 34.8 million people are concentrated in three major cities in the Kingdom. This population distribution is both a challenge and a strength for many projects. How you make use of this point depends on your project choices. Does your project serve crowded major cities? Or small cities and governorates? In the first option, projects often face many competitors and in return lower delivery prices and easier after-sales services. The second option is the biggest challenge is delivery and gaining customer confidence, especially if the project is the first of its kind in these cities or small governorates. In return, easy deployment and lower cost.

2. Customer needs

The customer is always looking for a solution to a problem (time - effort - quality - flexibility - service), whether easy delivery, fast delivery, flexible laws in returning or exchanging a product, after-sales services and confidence in product quality.

Know the type of problem your product will solve and then focus on the added value for the customer

  • Easy access to product or service information
  • Various loyalty programs and discounts
  • Affordable prices and multiple payment options
  • Fast and flexible delivery
  • Flexible after sales services
  • Multiple shopping options (online shopping - Instagram shopping - WhatsApp shopping)

3. The less fortunate

According to statistics released by PCG, electronic products are the most sold through electronic websites and applications with 18% in 2020. In second place are devices with 13.8%, health services 7.4% followed by clothing and shoes by 6.2%. The two categories that buy the least through electronic websites and applications are home services 4.6% and beauty and personal care 3.4%

This statistic shows the high potential in many non-widespread categories, either due to the ignorance of merchants in creating an attractive brand, convincing customers, poor customer service, or skipping the section of educating the customer and the community as a whole about the importance of the project and its solutions. According to BCG statistics, e-commerce in Saudi Arabia (the future of e-commerce specialization in Saudi Arabia) will increase by 25% until 2025 and this is the best opportunity to enter the market from the widest doors.

4. Capital

Despite the multiple challenges faced by e-commerce in Saudi Arabia, large capital is not one of the challenges. According to Global Web Index statistics, the average time a Saudi person spends on social networking platforms (social media) is about 3.2 hours per day. The Kingdom ranked third after the United Arab Emirates and the Philippines. Singapore was preceded by China, the United States and Britain. This shows the strong impact of platforms on Saudi society and the ease of using these platforms to market your product or service. On the other hand, the Saudi people are ready to enter the new (trend) by buying and selling in an easy way on Instagram, for example. It is common to ask customers about the service or product through Instagram, then receive bank statements and make immediate payment. This pattern of buying and selling shows the Kingdom's readiness to enter the electronic world on the one hand and makes it easier for traders to start trading with simple capital.

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