Saudi Arabia is witnessing significant growth in its e-commerce sector, reflecting the leadership’s commitment to staying at the forefront of technology and promoting cashless payments. This development aligns with the nation’s broader digitization goals as it modernizes and diversifies its economy.
The General Authority for Small and Medium Enterprises (Monsha’at) recently released a report titled “Small and Medium Enterprises and Promising Prospects for E-Commerce,” highlighting the sector’s remarkable progress and its impact on SMEs. The report notes that financing for e-commerce projects reached 1.6 million rials (€383 million) by the end of last year. The number of e-commerce platform users in Saudi Arabia is expected to reach 34.5 million by 2025, with a 42% growth in users from 2019 to 2024.
Key sectors driving this e-commerce growth include online sales platforms, digital marketing, logistics, and payment systems. The e-commerce market in Saudi Arabia is projected to reach €12.222 billion by the end of this year, with an annual growth rate of 15%, potentially reaching €24.596 billion by 2029.
The majority of payments in the Kingdom are expected to be made electronically, with 7.4% of transactions in real time and 48.6% through other digital means. A report by Prime Time for Real-Time ranks Saudi Arabia ninth globally in smartphone adoption, with 80% of consumers using mobile wallets.
E-commerce has empowered emerging businesses by reducing operational costs and broadening their customer base. However, these companies face challenges such as high competition, inventory management, and maintaining service quality.
Monsha’at’s report includes insights from industry experts, such as Muhannad Al-Mulhim, e-commerce advisor at the e-commerce council, who highlighted the council’s role in helping companies grow and innovate.
Notable companies contributing to this sector include Zid, founded in 2017 to facilitate merchants’ transition into modern retail, and Floward, a flower and gift delivery company that has expanded to nine countries. Trudoo Smart Shipping Solutions, an emerging startup, shared its journey and future aspirations in the competitive logistics market.
Saudi platform PayTabs, founded by entrepreneur Abdulaziz Al-Jouf, has played a crucial role in expanding the e-payment experience across various markets. Partnering with Swiss company Netcetera, PayTabs has implemented secure payment solutions to prevent card fraud and facilitate transactions on mobile devices and computers.
Saudi Arabia’s e-commerce growth is transforming its economic landscape, positioning local businesses as key players in the global digital marketplace. With strong government support and advanced technological infrastructure, Saudi SMEs are poised to compete internationally and fully integrate into the global digital economy.
