Only 15% of Middle Eastern firms, according to a Gartner report from 2016, have an online presence. Only 2% of the region\'s total retail sales come from online transactions. 10% of these internet purchases are made in the Gulf area, with the remaining 90% requiring international shipment. This is explained by apprehension and a lack of confidence in internet purchases in the Saudi Arabia Market.
Despite the fact that the Middle Eastern trend shows that there is room for expansion in the eCommerce retail sector, Saudi Arabia was previously thought to have the second-highest rates of internet, smartphone, and social media penetration in the region, after UAE. Saudi was still ahead of the game as a result. But in 2020, the retail environment in Saudi Arabia transformed, much like other worldwide developments. According to news sources from July 2020, the Kingdom\'s eCommerce had a record surge of 74% between March and April 2020.
Changing Consumer Behaviour in Saudi Arabia
Not only did e-commerce sales soar, but there was a significant change in what was being purchased. Saudi Arabians use the internet to purchase household supplies and food in addition to fashion, cosmetic, and technology products.
Saudi Arabians were constrained to using the cash-on-delivery option until the year 2020 due to apprehension over online payment. Consumers were ultimately compelled to discontinue their ten-year record of using cash on delivery and switch to a cashless payment method as a result of Covid-19 and social distancing conventions. As more Saudi Arabians than ever before have used the internet for shopping, this demonstrates a nascent confidence in the medium.
The Kingdom has also experienced the highest number of digital Ramadan festivities ever. Ramadan 2020 increased the use of technology for holiday shopping and communicating with family, which resulted in a significant increase in online sales in May 2020. This increase in internet sales is predicted to continue. According to a recent poll by the international consulting company Kearney Middle East, 69% of Saudi Arabian respondents said they would continue their present buying habits after the epidemic. However, just 48% of respondents from the UAE chose yes when asked the identical question. Could this imply that Saudi Arabia may someday overtake the UAE in terms of e-commerce growth?
Opportunities: What Retailers Should Keep in Mind
Retailers must seize this opportunity while customer optimism is high. When the Saudi government unveiled new e-commerce legislation in 2019 with the intention of fostering e-commerce transactions and activities, the enormous potential of e-commerce was already unleashed. After understanding the region\'s growth possibilities, let\'s look at key areas that e-commerce businesses should concentrate on before entering the Saudi online retail market.
The Middle East\'s most desirable market for an online merchant to enter in Saudi Arabia Market. We may thank the young people who are devoted to using their mobile devices for shopping. The covid-19 scenario has eliminated the prior obstacles to hesitation toward online payments, encouraging many customers to utilize e-commerce platforms on a permanent basis. Don\'t miss this treasure hunt in the thriving Kingdom of Saudi Arabia, where e-commerce revenue is expected to reach $8,697m by 2025!