Saudi Arabia Ecommerce Table of Contents
The third-largest population in the Middle East after Iran and Iraq is in Saudi Arabia with 33.6 million inhabitants. It also has the second-highest Internet user base, with a penetration rate well above the international average of 72 percent(as opposed to 57.8 percent ), reaching 24.1 million(Internet World statistics). In addition, 16.4% of the overall digitally linked populations in the Middle East register for Saudi internet users.
The increase in Internet penetration is forecast to rise by 6.9% to 73.5%. Saudi Arabia is highly smartphone penetrating (65.2%) but behind regional leaders like the UAE (78%) and Israel (74 percent ). In the next four years, Smartphone penetration will only rise marginally to 66.7%. (Eshop World). Google is the dominant player in the search engines sector with a 97.1% market share, led by Bing with 1.3% and Yahoo with 1.19%. (Statcounter).
According to the Ecommerce Foundation, the demand for e-commerce in Saudi Arabia has continuously expanded in recent years. According to Statista, the sales from all types of products in e-commerce were 6.13 billion US Dollars in 2017 and could rise to 9.41 billion US Dollars.
The sector, with its 12.94 million users (50%internet users), is one of the highest in the MENA region and is projected to continue its growth in the upcoming years, but at a slower pace than the global average (12.5% as compared to 24.8% worldwide). 6.34 million new Internet users are projected to shop online, bringing the number of e-shoppers at 19.28 million (accounting for 54 percent of the total population). Saudi Arabia will be the leading e-commerce industry in the Middle East, with such increases both in sales and in the number of online shoppers.
Although Saudi Arabia is the 46th highest e-commerce index in the world, after the United Arab Emirates and Israel, it is the 3rd highest in the Middle East. The cross-border trade in UAE-based websites that lead international shipments to Saudi Arabia is important, particularly in the regional context. The Gulf Cooperation Council and Noon.com l, which were founded in The UAE but operated (50%) by Saudi Arabia Public Investment Fund, released a local version of its website in Saudi Arabia at the end of 2017 and planned to contribute to the online shopping share of their site in Saudi Arabia.
In contrast, apparel items contribute to online purchases in Saudi Arabia, as does Emirates, of which Saudi e-computers have many parallels. Total fashion revenues amounted to US$ 1.91 billion in 2017 and US$ 1.85 billion in electronic and media. The fashion market is projected to rise by 20% from 2018 to 2022, with an approximate US$3.08 billion of e-trading, and the Electronics & Media segment is expected to keep growing at a slower pace and to hit US$2.66 billion in the same year.
The footwear segment is expected to expand most during this time in the fashion industry (average annual growth of 28.3 percent). According to the Saudi Communications and Information Technology Commission, 23% of e-commerce customers are buying the product at least once every two weeks and only 3% are buying the product less often than every six months. In all, 19% of men and 27% of women on the Internet are considered 'heavy shoppers,' buying online at least once every two weeks. This rate is especially important for those less than 30, since at least once every two weeks 29 percent of the internet users of this age group are online.
Sports, tablets, music, movies, event tickets, and services are often bought online as far as product types are concerned. The Saudi average user spends 618 US dollars online and is projected to rise to 642 US dollars by the year 2020. According to the Ecommerce Foundation, internet sales have already decreased by 13 percent in the last four years
Saudi Internet users are social media operators who pay 2 hours 55 minutes a day on average (behind the UAE and Israel that lead social media consumption in the region). Around 19 million social media users (59% of the population and 79% of internet users) are living in Saudi Arabia, 16 million still access their social media accounts through mobile telephones (Hootsuite Survey 2017). Facebook accounts (nearly 19 million) for almost all social media users and 45 percent of them use the site regularly. WhatsApp is used by many internet users as well as in many other GCC countries (total of 88% - 21.2 million people).
In Saudi Arabia, Twitter and Snapchat have the highest rates of use throughout MENA with 40% and 45% use of these channels with 7.6 million Twitter users and 8.5 million Snapchat users. Despite the decline in popularity, 20 percent of Internet users (4.8 million people) are using the Japanese-owned line, with the highest penetration in the Middle East by far in the 2017 Mid East Media Survey.
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