According to a report from the Small and Medium Enterprises General Authority (Monsha’at), the number of e-commerce platform users in the kingdom is expected to reach 34.5 million by 2025, marking a 42% increase from 2019 to 2024.
Monsha’at released a report titled “Small and Medium Enterprises and Promising Prospects for E-Commerce” examining Saudi Arabia’s e-commerce system and government initiatives supporting the small and medium enterprises sector.
The report highlights the sector’s growth, with the financing of e-commerce projects in the Kingdom reaching $426.7m in 2023.
Muhannad Al-Mulhim, a consultant at the Ministry of Commerce, noted that transformation of Saudi Arabia’s digital marketplace is part of a broader national initiative to foster innovation and stimulate economic growth. Part of this effort was the establishment of the E-Commerce Council in 2018 to advance the sector. He said that in 2020, the e-commerce sector contributed 4% to the Gulf state’s GDP, with 8% of goods and 25% of services purchased online.
E-commerce revenues are projected to reach $56.2 billion by the end of this year. However, e-commerce sales currently account for only 18% of retail sales in Saudi Arabia, highlighting the need for further expansion.
The sector’s contribution to the country’s GDP is projected to reach 12% by 2025, driven by a targeted 15% compound annual growth rate (CAGR) from 2020 to 2025. Additionally, 80% of transactions in the kingdom are expected to be conducted electronically by 2030.
Digital Commerce 360 notes some additional growth metrics:
- There are 42,900 online stores and 191 shipping and delivery services providers.
- The number of fulfillment centers totals 14,000.
- 35% of all products were global imports.
The report highlighted challenges in the field of e-commerce including competition with customers, limited resources, inventory management, business services.
