According to government statistics, Saudi Arabia’s e-commerce industry is growing rapidly, with venture capital investments in startups expected to reach SR1.6 billion (USD 426.7 million) in 2023.
A survey by the Small and Medium Enterprises General Authority, or Monsha’at, projects that 34.5 million people in the Kingdom will be using e-commerce platforms by 2025, a 42% growth from 2019 to 2024.
This increase emphasises how important the industry is to the Kingdom’s plan for economic diversification.
The digital marketplace revolution in Saudi Arabia is a component of a larger government programme to promote innovation and boost economic expansion.
A significant step in improving the industry was the 2018 founding of the E-Commerce Council, which focuses on developments in payment methods, logistics, and financial technology.
Saudi Arabia is now one of the Middle East and North Africa’s most vibrant e-commerce markets as a result of these advancements.
According to Muhannad Al-Mulhim, a consultant at the Ministry of Commerce, the sector acquired 8% of goods and 25% of services online in 2020, accounting for 4% of the Kingdom’s gross domestic product.
Al-Mulhim said, “Programmes under Saudi Vision 2030, such as the e-commerce stimulus programme, have reportedly encouraged advancements in various important sectors, including infrastructure and the legislative environment, according to the E-Commerce Council. As a result, the Ministry of Commerce released the e-commerce system.”
“In addition, the financial sector growth programme has resulted in a thorough development of the financial technology sector and various transformations in the logistics services sector, in conjunction with the Saudi Central Bank,” he continued further, while expressing hopes about his country’s e-commerce revenues exceeding the SR211 billion mark by the 2024 end.
Even with this quick rise, e-commerce sales in the Kingdom still only account for 18% of overall retail sales, indicating significant growth potential. The sector is expected to contribute 12% of GDP to the GDP by 2025, with a targeted compound annual growth rate of 15% from 2020 to 2025.
Future projections indicate that by 2030, 80% of Saudi Arabian transactions will take place digitally, in line with Vision 2030’s overarching goals. The e-commerce industry will be essential to promoting economic diversification, innovation, and new business prospects as the Kingdom pursues its ambitious goal.