Saudi Arabia's e-commerce market to exceed $13 billion by 2025

According to a report by Boston Consulting Group and Meta , the market value of e-commerce in Saudi Arabia increased from 6 billion Saudi riyals ( about US$1.6 billion ) in 2016 to 12 billion Saudi riyals ( about US$3.2 billion ) in 2019 .

Moreover , market growth accelerated during the epidemic , increasing by more than 100% in 2020 and 2021, and currently reaching 25 billion Saudi riyals ( about US$6.6 billion ) .

Despite its rapid growth, e-commerce in Saudi Arabia is still in its infancy. In 2020, it accounted for only 6% of the region's total retail sales, while the global e-commerce market penetration rate was 18% in the same year.

In terms of market segments, the electronics and appliances category enjoys the highest position in the e-commerce space in the Saudi Arabia region.

" Saudi Arabia's e-commerce market is relatively small compared to some of the larger ones. However, despite being in its infancy, its huge potential is already evident, and the development of its e-commerce ecosystem in the coming years will bring numerous economic and social benefits," said Pablo Martinez, managing director at Boston Consulting Group.

Meta’s director of development in the region, Suha Haddad, also mentioned that “consumers are increasingly moving their purchases online, e-commerce sales are soaring across all industries, and the Kingdom is now more connected to the rest of the world than ever before.”

Benefits of e-commerce

The report mentions that e-commerce has the potential to bring significant benefits to customers by addressing the inherent disadvantages of physical retail. These advantages include:

Showcase more product assortments: Unrestricted by physical space, retailers can showcase their entire product assortment online.

Customized shopping experience: Advanced search engines and product reviews allow consumers to quickly access relevant information and find products without having to sort through a large number of items first.

Competitive and transparent pricing: Customers can easily compare prices between retailers online, and price transparency leads to more competitive prices.

Fast and Secure Payments: Advanced payment systems enable customers to make seamless one-click purchases online with enhanced security.

Fast and flexible delivery: Through advanced distribution systems, customers' ordered goods are delivered to customers at unprecedented speed (in hours or minutes).

Convenient After-Sales Service: Hassle-free online return policy allows customers to inspect and send products back to the seller without adding extra costs.

Cross-border e-commerce market

Saudi Arabia

middle East