Saudi Arabia Ecommerce Market Size

Saudi Arabia E-Commerce Market Analysis

The Saudi Arabia Ecommerce Market size is estimated at USD 13.61 billion in 2024, and is expected to reach USD 27.37 billion by 2029, growing at a CAGR of 15.01% during the forecast period (2024-2029).

The market analyzes the revenue generated by selling goods such as food and beverage, consumer electronics, fashion and apparel, beauty and personal care, furniture and home, and others through the online sales channel.

• Saudi Arabia has a developed economy, and internet penetration is significant in the nation, with the World Bank indicating that over 100% of the population uses the internet. This indicates that the awareness of online shopping is significant and contributes to market growth. The growing advancements in mobile internet technologies, smartphones, and broadband have boosted the adoption of internet-based services.
• Moreover, the growing government aid in boosting the adoption of digital technologies in the nation in line with the Vision 2030 plan is analyzed to contribute to the market growth rate during the forecast period. For instance, in September 2022, the Ministry of Commerce launched ten initiatives to develop e-stores in Saudi Arabia. The ministry stated that the ten initiatives had been set in accordance with the people's suggestions to develop this sector.
• The growing collaborations in the nation are also contributing to the market growth rate. For instance, in 2022, the Middle East's Apparel Group and FSN E-commerce, the parent company of the online fashion store Nykaa, struck a contract to enter the Gulf market. To provide differentiated Gulf Cooperation Council (GCC)-oriented beauty offerings in the United Arab Emirates, Saudi Arabia, Qatar, Oman, Kuwait, and Bahrain, Nykaa will leverage the Apparel Group's retail infrastructure network and extensive market relationships. The GCC is positioned for rapid growth, particularly in the personal care and cosmetics sectors. With the Apparel Group, Nykaa has a significant chance to broaden its core value proposition and accelerate regional offline and online retail growth.
• As more individuals in Saudi Arabia use e-commerce for their shopping, this increases the opportunity for scammers to take advantage of vulnerable customers. According to Arabian Business, 93% of financial fraud occurred after the pandemic, which supports the fact that cybercrime activity is rapidly increasing. This is expected to challenge the growth of the market.
• However, consumers' interest in e-commerce also increased significantly post-pandemic. The COVID-19 pandemic significantly increased online product sales due to governmental restrictions, lockdowns, and safety purposes; it became the new normal as companies and customers went digital by offering products and services through e-commerce channels during the pandemic in Saudi Arabia. Restrictions on movement and trade due to the COVID-19 pandemic led to a substantial shift in consumer behavior in the Kingdom, with locals increasingly turning to digital channels.