Report Overview

Increasing demand for online shopping among consumers, widespread use of smartphones for social media, and surging internet penetration is driving Saudi Arabian e-commerce market...

Saudi Arabia Ecommerce Market- Industry Trends & Forecast Report 2028

Saudi Arabian eCommerce Market is anticipated to grow from around USD 8 billion in 2021 to USD 18.72 billion in 2028, exhibiting a CAGR of more than 12% during the forecast period (2022 – 2028). Saudi Arabian population's 69 % online penetration rate—i.e., the proportion of people in Saudi Arabia who made at least one online purchase in 2021 is expected to continue growing over the course of next five years.

Saudi Arabia Ecommerce Market - Overview

The Kingdom ranks tenth in the world for the fastest internet speed, has one of the highest smartphone penetration rates in the world, and more than 72% of its population over the age of 15 have a bank account. Moreover, mobile broadband internet subscription percentage is also a lot higher than the global average. E-commerce, or electronic commerce, involves buying and selling goods and services online. Online sales and transactions provide a tonne of options to consumers, thanks to the growth of e-commerce. Users can purchase their goods and services through the e-commerce market without going to the store in person. The e-commerce industry includes the digital channel-based sale of tangible commodities to individual end-users (B2C). This definition includes purchases made using mobile devices as well as desktop computers (including notebooks and laptops) (e.g., smartphones and tablets). Digitally distributed services (see instead: eServices), media downloads or streaming, items delivered digitally in B2B markets, and the digital purchase or resale of worn, damaged, or repaired goods are not included in the eCommerce market (eCommerce and C2C). All monetary amounts are expressed in terms of the annual gross revenue and exclude shipping expenses.

Saudi Arabia E-Commerce Market Industries Trends and Market Forecasts

Five categories are taken into account in the study. Fashion as a category makes up 32% of eCommerce sales, followed by Electronics & Media; Food & Personal Care;Toys, Hobby & DIY; and Furniture & Appliances. Aramex is the online retailer's most popular choice for delivery services in Saudi Arabia. Aramex was mentioned by 42% of the stores when asked which service they employ to ship their goods. Additionally, at rates of 27% and 15%, respectively, DHL and UPS are among the top three shipping service providers Saudi Arabian internet shops offer.

Saudi Arabia Ecommerce Market – By Type

The fashion segment dominates the Saudi Arabia e-Commerce market in terms of segments. The main elements that have fueled the sales of fashion products on e-commerce portals are the accessibility of worldwide brands and the appearance of trending products on such online platforms with a variety of offers and discounts. In Saudi Arabia, the demand for electronics and media items is rising quickly.

Saudi Arabia Ecommerce Market – By Payment

The most popular way of payment among the choices available to Saudi Arabian online customers is Cash on Delivery. However, during the projected period, Cards and Wallets are anticipated to increase at the fastest rate. Several mobile wallets have been introduced over the past few years, including Apple Pay, Mada Pay, STC Pay, and BayanPay. While many customers who lack credit cards or simply prefer to conduct business through a bank utilize bank transfers as a form of payment.

Saudi Arabia Ecommerce Market – By Device

Mobile phones are the most popular devices for online purchasing because they accounted for the largest share of the Saudi Arabian e-commerce market. Saudi consumers are increasingly turning to their phones for product information and purchases due to one of the highest smartphone penetration rates in the world. A progressive reduction in desktop purchasing is being seen in the Saudi Arabian e-Commerce business as technological savvy is quickly expanding due to strong mobile and internet adoption rates.

Saudi Arabia Ecommerce Market – By Sales

Customers can inspect things and ship them back to the seller at no additional cost if they choose thanks to hassle-free online return policies. Due to the centralization, reach, and complexity of the main online businesses, the level of after-sales care with e-commerce actually tends to be considerably higher than that of traditional merchants.

Saudi Arabia Ecommerce Market Forecast and Trends

Growth Drivers

The Saudi Arabian e-commerce market is expanding steadily as a result of a number of factors, including increased smartphone use, social media use, and internet penetration. Due to this, e-commerce sector vendors from all over the world have decided to invest in the nation. Trends indicate that online retailers typically charge less for their products than traditional retailers do. Discounts, incentives, and cash-on-delivery options for online shops are some of the other main elements anticipated to influence internet shopping. The Saudi Arabian e-commerce market is also growing because of initiatives from businesses like Amazon, Emmar Group, and Jarir Marketing.

Impact of Covid-19

The COVID-19 outbreak and lockdown have had a significant impact on the retail industry globally, especially the brick-and-mortar model. However, e-commerce is one of the few industries that has seen growing consumer interchange across a wide range of areas. Saudi Arabia likewise exhibited the same pattern. Many organizations in the area were compelled to adjust to the shifting consumer preferences as a result of the regional lockdown and company closure. Some areas of Saudi Arabia's e-commerce sector saw tremendous growth as digital retailing and shopping became the new norm under these conditions.

Regional Insights

The Middle East's social commerce business is expanding very quickly, with various firms in the area fueling this development. These firms are growing quickly to capture more market share in the area as consumers' preference for this mode of buying grows. It is anticipated that during the next four to eight quarters, the rivalry in Saudi Arabia will become even more fierce as a result of the existence of these international and regional social commerce companies. In the short to medium term, this will continue to promote the growth of the nation's entire market.

Competitive Landscape

Companies are becoming more competitive in Saudi Arabia's e-commerce market. There are many significant companies in the sector, including Amazon, Haraj, Noon, and others. These prominent players currently control the Saudi Arabian e-commerce market in terms of market share. In contrast, many businesses and startups are expanding their market presence by gaining new contracts and tapping into new markets as a result of the growing advancements in e-commerce.

Recent Developments

A furniture e-commerce site called Homzmart announced in May 2022 that it was expanding its operations in Saudi Arabia. A British online clothes retailer named Boohoo announced a deal with Kuwait's Alshaya Group in July 2021 for the expansion of its Debenhams brand in the Middle East.

Scope of the Report

By Type

 B2C

1.  Clothing & Footwear
2.  Beauty and Personal Care
3.  Food & Grocery
4.  Appliances and Electronics
5.  Home Improvement
6. Others

By Payment

1. Credit Card
2. Debit Card
3. Bank Transfer
4. Prepaid Card
5. Digital & Mobile Wallet
6. Other Digital Payment
7. Cash

By Device

1. Mobile
2. Desktop

By Sales

1. Online
2. Offline