Market Trends of Saudi Arabia E-commerce Logistics Industry
Growth in e-Commerce Sales is Driving the Growth of the Market
- The growth of homegrown e-commerce websites in Saudi Arabia has been remarkable in recent years due to the support provided by the government. There are also many educational initiatives supporting e-commerce growth in Saudi Arabia.
- In 2023, PepsiCo partnered with MCIT and AstroLabs to run the PepsiCo ScaleUp e-commerce program that accelerated 100 Saudi businesses on their online journey. The e-commerce industry is a critical factor that the country's Vision 2030 plan aims to leverage to promote the growth of small and medium-sized enterprises.
- Hence, Saudi Arabia's e-commerce sector is observing steady growth, as the number of registered businesses has reached 36,330 in the third quarter of 2023. This represents an annual increase of 12 percent. According to the latest data released by the Minister of Commerce, the city of Riyadh has the highest number of registrations with 14,497, followed by Makkah with 9,275 and the Eastern Province with 5,866. The Madinah and Qasim regions have 1,792 and 1,222 e-commerce registrations, respectively.
- In June 2023, Seeking to explore the immense growth opportunities in Saudi Arabia, Dubai-based e-commerce facilitator YallaHub launched a full-throttle expansion plan to enter the KSA. YallaHub aims to foster Saudi e-commerce growth by offering a comprehensive solution to aid SMEs significantly. The company offers registration and licensing services, export and import assistance, storage and fulfillment, super-fast delivery, marketing, e-commerce setup, and payment gateway rent.
Increasing Demand for Consumer Electronics is Driving the Market
- The demand for electronics in Saudi Arabia’s e-commerce market is increasing with a rising middle class, increasing internet penetration, and higher disposable incomes, more Saudis have the purchasing power to buy electronic goods. Moreover, the younger, more tech-savvy population is driving the demand for electronic products, including smartphones, laptops, and smart home devices.
- As per the industry experts' data, smartphone penetration in Saudi Arabia was forecast to remain at a similar level in 2029 as compared to 2024, at 97 percent. However, the number of mobile internet users in Saudi Arabia was forecast to continuously increase between 2024 and 2029 by a total of 2.8 million users.
- Moreover, in the electronic products segment, the E-commerce companies have implemented various consumer-friendly features to attract more customers, including diverse product ranges, customer ratings and reviews, discounted deals, affordable delivery options, free exchanges and returns, competitive pricing, and 24/7 availability.
- The growth of the consumer electronics e-commerce market in Saudi Arabia is expected to be boosted by the increasing demand for smartphones. This demand has made online shopping more accessible, convenient, and attractive, leading to more consumers using their smartphones to purchase a wide range of electronic products.
- In October 2023, Honor, one of the leading global providers of smart devices, reported strong demand for its high-end smartphones in the region. This trend indicates that the increasing demand for smartphones is driving the growth of the consumer electronics e-commerce market.