Ecommerce growth in Saudi Arabia- The Complete Guide

Notwithstanding a high E-Commerce willingness index, the Kingdom of Saudi Arabia never actually encountered a significant growth in online sales for the most extended time. To put it into viewpoint, KSA’s Ecommerce invasion in 2017 was 1.4%, which was more cramped than half of that of the US in 2005. But that story has been unwaveringly changing in the last two years – with an eCommerce growth rate surpassing 32% and online sales in the Kingdom presumed to hit 9 billion USD by 2025.

Until now, the protagonist in Saudi Arabia’s Ecommerce growth narrative has been its affluent, tech-savvy population which stands among the most powerful in the world in smartphone penetration (supposed to reach 66.6% by 2022) and social media using (currently at 59%). Ecommerce extension in KSA is anticipated to grow at an even more accelerated pace over the next few years. The businesses aiming to digitize their shop can now consult a top e-commerce development company in Saudi Arabia for assistance.

Consumer Behaviour in KSA

Among the GCC countries, Saudi Arabia owns some of the most leading internet penetration and mobile acceptance. In 2018, 9074.81 percent of the residents were internet users. This share is predicted to grow to 96.44 percent in 2023. An extraordinary 88% of Saudis use the internet at least once a day and 59% of the community has a ubiquity in at least one social media platform. Around half of the Kingdom’s residents owned a computer, although the preponderance said they fancied a laptop or tablet for connecting to the Internet. According to a study by General Authority for Statistics (GASTAT), mobile phone mode in KSA hit 99.16% in 2018. The average time employed online per day by consumers in Saudi Arabia is 6 hours and 45 minutes, which is 15 minutes more further than the ordinary American consumer.

Decoding Saudi Arabia’s Digital Consumer

While starkly diverse in terms of Internet penetration, population demography, and infrastructure, the Kingdom’s Ecommerce germination shares certain affinities to developing Ecommerce markets like India and Brazil.

Demography, Motivators & Shopping Patterns :

While the level of internet ingress and smartphone usage in Saudi Arabia is similar to other countries in the GCC, the country is an outlier when it occurs to consumer demographics. While E-Commerce enactment is quickly increasing amongst all demographic segments, the quickest growing sections are females and millennials. This can be attached to the current recreation of rules around driving, the entertainment business, licenses for gyms and fitness centers for women, etc, all of which have appeared in more economic empowerment and employment possibilities for women. For Saudi customers, price and service are the prime factors for doing an online purchase. For clothes and electronics, pricing was the major reason to shop online while groceries and personal interest online sales were majorly caused by service.

Payment Preferences

Cash on Delivery and Digital Payments are recommended payment modes amongst women and younger millennials, while credit cards continue to be the preferred payment option for more traditional segments and male customers. The low credit card penetration indicates 66% of transactions are done utilizing cash on delivery.

Factors Spurring Ecommerce Growth in Saudi Arabia

While the original drive was inspired by electronics, fashion, and travel, the next phase of Ecommerce growth in Saudi Arabia is supposed to be motivated by fast-moving goods, groceries, and personal care items.

Government Incentive to Ecommerce

Ecommerce was known as one of the mainstays of Saudi Arabia’s Vision 2030 under the National Transformation Program and is demanded to provide 80% of the retail sector by 2020. The Saudi Arabian government is preparing an investment of over $100 billion in the development of logistics infrastructure to support ecommerce extension in the region. The Vision 2030 national development policy also states that the Kingdom strives to provide job possibilities for an additional million Saudis by 2020 in a developing retail sector that pulls modern, local, regional, and international brands over all areas of the country.

Affluent, Tech-savvy Population

Saudi Arabia ranks in the top 20 most expensive countries by using power, according to the World Bank and the region’s bloom are remarkably tech-savvy and substantial users of social media. The internet and smartphone invasion are critical elements of the ecosystem that will stimulate ecommerce completion. Also, they play a critical role in the analysis, development, and buy lifecycle of ecommerce.

Socio-economic Reforms

Prince Mohammed has made numerous economic changes, mostly aimed at decreasing the country’s dependency on oil revenue. He has also served in several socio-economic changes like stripping the strict controls over women like raising the driving ban and supporting women to study at university, undergo an operation, or get work without the need for a protector. These changes around empowering women will possibly influence Ecommerce sales and growth in the country as it opens up a whole new section of customers.

Key Takeaways

• Ecommerce has been increasing at an extraordinary rate in Saudi Arabia, thanks to the rise of digital payments and providing key segments like females and youth with higher convenience.
• Discounts and offers are the fundamental factors that attract shoppers to Ecommerce platforms. This is particularly widespread for products like Electronics and Fashion.
• Retailers need to be informed about how Saudi Arabian consumers behave individually depending on the audience segment, product decisions, and categories. For instance, groceries and electronics see more leading impulse-driven purchases while garments sales are planned.

Last but not the least, for any e-commerce development Jeddah, feel free to contact Ewaantech.