Analytics about e-commerce industry in KSA

February 25, 2020by takla khoury0

e commerce in ksa , E-commerce is an open market around the clock, in terms of saving time and effort on the e- commerce shopper to access all goods and services with various options in a transparent and highly competitive environment to gain consumer confidence.

This new global pattern of trade is witnessing great demand by the Saudis, as the Kingdom is one of the top 10 developing countries within the field of this trade in the world with a growth rate exceeding 32%, and the volume of its transactions within the Kingdom has reached nearly 80 billion riyals, during the year 2018.

This is the Saudi market, the largest economic market in the region, and the largest purchasing and consumer markets, where e-commerce reduced sales of the traditional retail market to 30%.

E-commerce in Saudi Arabia

We have repeatedly stressed that the Kingdom of Saudi Arabia is at the forefront of all the countries of the Arab world where e-commerce is very prevalent, as evidenced by the numbers and results that e-commerce has reached there in recent years, and they have demonstrated the following:

  • The volume of e- commerce during the year 2019 amounted to about 33 billion riyals, according to the Chairman of the Entrepreneurship Committee at the Jeddah Chamber.
  • The Kingdom of Saudi Arabia accounts for 45% of the volume of e- commerce in the Middle East and the Arab world.
  • The number of registered e- commerce stores in Saudi Arabia was approximately 25,501 online stores.
  • 21% of those e- commerce stores in the Kingdom of Saudi Arabia work in the field of electronic marketing, while cooking and bakery stores come in second place with 15%, followed by women’s supplies stores with 13%, followed by electronics and accessories stores, then design and printing, then planning events and parties, Crafts, handicrafts, electronic solutions, then academic services, furniture and decor, then cosmetics, photography, cars, and finally real estate.
  • The number of Internet users in the Kingdom of Saudi Arabia has reached 29 million browsers from all over the Kingdom.
  • The prevalence of internet services in the Kingdom of Saudi Arabia increased from 64% to 82%.
  • The Kingdom of Saudi Arabia is at the forefront of the largest e-commerce markets in the Arab world and the Middle East, as well as North Africa.
  • E-services – especially travel-related services – have successfully acquired two-thirds of the volume of e-commerce spending.
  • The average spending per person online during the year 2017 reached 4 thousand riyals, which is equivalent to (1066 dollars).

Where is e-commerce heading in Saudi Arabia?

e commerce in ksa is concerned with the use of the Internet and technology, in part or in whole, to manage the various commercial operations.

The late 1990s witnessed the establishment of companies such as Amazon and eBay, identifying the features of modern e-commerce, and it has grown since that time to include various activities and markets.

in the past few years the emergence of a new market with unusual growth rates, and have taken two basic forms in the utilization and operation of e- commerce.

1- Individual Merchants:

They are characterized by the fast turnaround to work and their use of the simple limit provided by social networks and their use as a basic sales and marketing channel, according to a report published by the Ministry of Trade and Investment on the increase in the number of e-stores registered in the “Marouf” service to 20 thousand e-stores in 15 various activities at the end of the third quarter of 2018.

2- Emerging technical companies:

It is the one that uses all the resources available to it to work primarily online, either through phone applications or websites, and differs from its predecessor, as it works professionally and with the intention of achieving profit and being present in the market and deducting a percentage of it. Here I will not detail it in the heart of this article.

Saudi Arabia’s global ranking in e-commerce:

  • The Kingdom came in ranking No. (46) out of (144) countries with a total of (69) equal with countries such as Italy and Russia, and higher than the economies of
  • In 2017, its target (UNCTAD) is greater, as are India and China. This is based on a study conducted by the United Nations Conference on Trade and Development
  • Understand and establish criteria for the readiness of countries to engage in Internet commerce, based on four criteria, which are prevalence
  • Internet usage, number of secure internet connection servers, bank account spread, and postal reliability

(Criteria are central to e-commerce growth in different countries.)

The demand side and Saudi Arabia consumer behavior :

  • The vast majority of consumers purchased from e-commerce companies based in the Kingdom during the twelve months
  • Past from the date of the survey.
  • A large number of consumers bought from e-commerce companies from outside the Kingdom, which means that a large part leak
  • Of e-commerce revenue outside the country.
  • Shoppers generally use a mix of traditional and online buying channels
  • More than two-thirds of shoppers are concerned about entering their personal credit card information on sites
  • E-commerce, just as individuals who have previously marketed online feel more confident than people
  • 42% of online shoppers bought from social media websites and apps, and women shop
  • More men than social media, due to the ability of consumers to see
  • The opinions and recommendations of other shoppers before buying, in addition to the consumer feeling more transparent if it is The seller is active on social media.

The Supply Side and eCommerce marketing consultant

From traditional retailers’ dealings with e-commerce:

  • Traditional retailers seek to develop their electronic capabilities to maintain their position in
  • Market, and large companies are usually slower in their transition towards e-commerce than
  • Small companies as they approach the path of transformation gradually and cautiously.
    • Some traditional retailers open e-commerce companies as branches to enter the market faster,
  • And to foster internal innovation without adhering to the technology available to them, despite the success of these plans
  • Initially however, the problem of differing storage and pricing strategy appeared, which in turn would lead
  • To the emergence of shortcomings.
  • There are a number of traditional retailers expanding their digital practices through selling
  • And making it more flexible by letting customers receive or return products from
  • Traditional stores.

e commerce in ksa Systems and controls

After the size of e-commerce in Saudi Arabia reached nearly 45% of the volume of this trade in the Middle East by more than 33 billion riyals, it became necessary to organize e-commerce operations in the Kingdom.

From here, the Saudi Cabinet issued a decree approving the e-commerce system, the most important of which is in:

  • Explain contact information and product characteristics.
  • Shopper data protection.
  • Regulating e-business ads.
  • Delayed delivery handling.
  • Compliance with the provisions of licensed professions.
  • Pull and block infringing ads.
  • The service provider’s place of residence is considered to be his workplace in the absence of a work place for him.

Controls for e- commerce advertising, the most important of which are:

  • The advertisement included the name of the product, the merchant, and the means of communication.
  • The advertisement shall not include any allegation that deceives the customer.
  • Banning the advertisement for any mark whose merchant does not have rights.
  • Require the online store to remove the infringing ad.

This comes after the Kingdom established the “E-Commerce Council”, on July 18, 2018, which is linked to a number of vital sectors, such as customs and postal, where the Council is responsible for proposing e-commerce policies and legislation and overseeing the “stimulating e-commerce” program, and coordination with the relevant authorities To prevent duplication, get rid of obstacles facing e-commerce, and ensure the effective implementation of “stimulating e-commerce” projects and recommendations.

The council’s approval is considered a strategic step to achieve the goals of “Vision 2030” by creating a diversified economy, establishing an attractive investment environment, and an incubating environment for entrepreneurship and job creation, as the Kingdom is working to complete the progress in the e-commerce index by ranking 35th at the United Nations Conference on Trade and Development at the end of The year 2020.

The Council also contributes mainly to the implementation of the “stimulating e-commerce” program initiative that would enhance the growth of the business system of this trade, in addition to that it is considered a point of contact in which the relevant national institutions from the public and private sectors cooperate to align their efforts and keep pace with the global developments of this trade And there are shopping platforms in the digital space according to the preferences and desires of the merchant and the consumer.

 The volume of e-commerce in Saudi Arabia

The volume of e-commerce in Saudi Arabia is about 33 billion riyals, as Saudi Arabia controls 45% of the volume of e- commerce in the Middle East.

e-commerce stores officially registered in the Kingdom amounted to 25,501 e commerce stores, indicating that 21% of e- commerce stores provide electronic marketing services, followed by cooking and baked goods by 15%, then women’s requirements by 13%, followed by electronics and accessories stores, then design and printing, then planning events and parties, Crafts and crafts, electronic solutions, then academic services, furniture and decoration, then cosmetics, photography and cars, and finally real estate.

Features of e-commerce in Saudi Arabia

e-commerce has advantages that distinguish it from traditional ones, the most important of which is that it does not need large capital, in addition to providing operational costs and expanding access to customers, and that it is not restricted to a specific place or time, at a time when we find that electronic commerce is one of the fastest-growing sectors Due to the presence of the environment and electronic infrastructure that is available in the Kingdom, especially high-speed internet services, the proliferation of tablets, and smartphones.

Challenges and online buying behavior

challenges facing e-commerce, such as the high cost of shipping and delivery, the lack of supply chain service providers, the high percentage and foundational fees, as well as the difficulty of opening bank account for owners of e-commerce activities, and the lack of technical expertise houses in the Kingdom to provide Software and consulting services.

Spread and consumer behavior analysis

the number of Internet users in Saudi Arabia rose to 29 million, which indicates that this sector has become more important in the coming period, especially as the increase in the prevalence of Internet services at high rates during the past years has jumped from 64% to 82%…

The study showed that one of the most important challenges of the transformation of e-commerce is shipping, delivery and product delay

On the clients, in addition to the length and complexity of government procedures, as well as the lack of experience in this area

And fears of some traditional retailers from the transition to e-commerce.

– The study indicated that there is an estimated segment of the audience members participating in the study who are qualified from

Where (age, education) to make the right decisions regarding online shopping from e-stores,

Meaning there is an appreciated audience that has the decision to buy and shop online.

– The results of the study revealed that the majority of the participating audience prefer to buy online from stores

This indicates that there is a high degree of confidence in local stores, as this may be due to availability

The means of delivery and the required speed when completing the purchase.

– The results of the study showed that one of the most important motives for buying on the Internet was the low prices and the lack

Availability of products in traditional markets.

– The results of the study indicated that there is a need to purchase many products and services online from stores

Electronic and in particular tourism services, shoes, bags and clothing. As the results indicated that all

The factors that drive the public to buy online contribute specifically to offers and buyers’ opinions

Previous, ease of delivery and after-sales services.

– The study revealed that despite the presence of a percentage of individuals prefer to shift the business centers to activities

Entertainment and food services, however, an estimated (46.6%) do not prefer this, and therefore it can be done

The commercial centers are gradually transformed into recreational activities, according to the preparation of feasibility studies for that.

– The results showed that the majority of individuals shopping believe that they have the ability to master shopping through

Internet. This shows that there are very good indicators for the shoppers’ audience to use the sites

e- commerce shopping. The results also showed that the majority of individuals have credit cards to pay online or

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