- Design industry shaping loyalty programs
- Integrate easily and go live quicker
- Deliver hyper-personalized consumer experiences
Capillary acquires US-based Brierley+Partners Read more >
Capillary named a Leader in The Forrester Wave™: Loyalty Technology Solutions, Q1 2023 Report Read more >
By4 Min Read
April 07, 2021
The megatrend of ecommerce proliferation is visible across the world, and over the past year it has been booming in Middle East.
A 2016 study by Gartner suggests that only 15% of Middle Eastern businesses had an online presence. Online commerce contributes to only 2% of the total retail sales in the region. 10% of these online transactions are from the Gulf region and the rest are purchases that require international shipping. This can be attributed to a sense of reluctance and the inability to trust online transactions.
Even though the Middle Eastern trend highlights ample scope for growth in ecommerce retail, Saudi Arabia was known to have the second highest levels of internet, smartphone and social media penetration after UAE in the region. So Saudi was still ahead in the game. But much like all other global trends, the Saudi Arabian retail landscape changed in 2020. News reports from July 2020 suggested that ecommerce in the Kingdom posted a record growth of 74% during March and April 2020.
The stark change was not only how ecommerce sales shot up but also what was being bought. Saudi Arabians, who were using online platforms to buy fashion, beauty, and electronic products, took to the internet to buy groceries and home goods.
With the hesitancy towards online payment, Saudi Arabians were stuck with the cash on delivery option until 2020 came. Due to Covid-19 and the social distancing norms, consumers were forced to finally end the decade-long streak of cash on delivery usage and choose a cashless payment option. This shows a new-born confidence in the medium as many Saudi Arabians shopped online more than ever before.
The Kingdom has also seen the most digital Ramadan celebrations of all time. Ramadan 2020 caused more use of gadgets for both festive shopping and connecting with family, leading to a big leap in online sales in May 2020.This jump in online shopping is expected to stay. In a recent survey by the global consultancy firm Kearney Middle East, 69% of the respondents from Saudi Arabia confirmed that they would maintain their current shopping behaviour after the pandemic. On the other hand only 48% of UAE respondents answered yes to the same question. Could that mean that one day Saudi Arabia might surpass UAE in the ecommerce growth?
Retailers must not miss out at a time when the consumer optimism is growing. The huge potential of ecommerce was already unlocked in 2019, when the Saudi government introduced a new ecommerce law that aimed to boost ecommerce activities and transactions. While we have understood the growth prospects of the region, let’s take a look at some areas of focus for ecommerce players – what should they keep in mind before starting up in Saudi’s online shopping world?
Saudi Arabia is the most attractive market in the Middle East to for an ecommerce retailer to venture. Thanks to the young population that is eager to their gadgets for mobile shopping. The previous challenges of reluctance towards online payments has now dissolved due to the covid-19 situation, pushing many consumers to permanently use ecommerce platforms. With the ecommerce revenue projected to $8,697m by 2025, don’t miss this treasure hunt in the flourishing Kingdom of Saudi Arabia!
April 7, 2021 | 4 Min Read
The megatrend of ecommerce proliferation is visible across t
August 25, 2019 | 4 Min Read
Over the last few years, rapid digitization has made a signi