Factors favorable to the growth of B2C E-Commerce, such as the advanced infrastructure, high connectivity rates and youth-oriented demographic are expected drive the rise of online retail sales in Saudi Arabia. A forecast cited in the report indicates that Saudi Arabia will surpass current regional leader the UAE in online retail sales by 2020.
The widespread use of smartphones is one of the trends facilitating B2C E-Commerce growth. About nine out of ten adults own a smartphone and most owners use the device to go online. The yStats.com research reveals that most online shoppers have made a mobile purchase. Smartphone owners also can expedite delivery of ordered products by providing geographic coordinates to delivery services via mobile.
Social media and cross-border shopping also are propelling B2C E-Commerce. The web pages of Twitter, Instagram and Facebook are among the top 10 most visited websites in Saudi Arabia, a fact that online retailers use to promote sales. The yStats.com publication also reports that the high proportion of Saudi Arabian shoppers that shop outside the Kingdom make Amazon.com, eBay.com and Aliexpress.com among the top E-Commerce sites visited by Internet users.
Key Questions Answered
- How is B2C E-Commerce evolving in Saudi Arabia?
- How large are online retail sales in Saudi Arabia predicted to be by 2020?
- Which important market trends are present in B2C E-Commerce in Saudi Arabia?
- What are the preferences of online shoppers in Saudi Arabia with regard to product categories and payment methods?
- Who are the top market players in Saudi Arabian online retail?
1. Management Summary
2. Overview & International Comparisons
B2C E-Commerce Market Overview and International Comparisons, January 2018
Retail E-Commerce Sales in Saudi Arabia Compared to the UAE and Other GCC Countries, in USD billion, 2015 – 2020f
Internet Penetration in Saudi Arabia, in % of Individuals, Compared to Selected Countries in MENA, 2016
Smartphone Penetration in Saudi Arabia, in % of Adults, Compared to Egypt, Jordan, Lebanon, Qatar, Tunisia and UAE, March 2017
Devices Used to Connect to the Internet, in % of Adults, March 2017
Shopping-Related Activities Carried Out Online, in % of Individuals, H2 2016
Share of Online Shoppers Who Make Purchases via Smartphone, in %, May 2017
Breakdown of Preference for Browsers and Applications When Shopping via Mobile, in % of Mobile Shoppers, May 2017
Actions Performed via Smartphone In-Store, in % of Smartphone Users, November 2016
Share of Online Shoppers Who Purchased via Social Media Sites or Applications, in %, May 2017
Origins of Online Purchases Made in the Previous 12 Months, in % of Online Shoppers, May 2017
4. Sales & Shares
B2C E-Commerce Sales, in SAR billion, 2016 and Annual Growth Forecast for the Next Years, in %, as of August 2017
E-Commerce Sales, by Airline Tickets, Retail, Entertainment, and Travel, in USD billion, 2015 & 2016
Retail E-Commerce Sales, in USD billion, 2015 – 2020f
B2C E-Commerce Share of Total Retail Sales, in % 2017e
5. Users & Shoppers
Number of Internet Users, in millions, and Penetration, in % of Individuals, 2011 – 2016 & Q2 2017
Online Shopper Penetration, in % of Respondents, May 2017
Breakdown of Frequency of Shopping Online, in % of Online Shoppers, 2016
Breakdown of Frequency of Shopping Online, in % of Online Shoppers, May 2017
Breakdown of Perception of Security of Online Shopping, by Online Shoppers and Non-Online Shoppers, May 2017
Reasons to Buy From a Physical Store or Mall Rather Than Online, in % of Smartphone Users, November 2016
Product Categories Purchased Online, in % of Online Shoppers, 2016
Channels Used to Purchase Selected Product Categories, by Online, Offline and Both, in % of Respondents, May 2017
Channels Used to Purchase Selected Categories of Services, by Online, Offline and Both, in % of Respondents, May 2017
Breakdown of Payment Methods Preferred in Online Shopping, in % of Online Shoppers, 2016
Breakdown of Payment Methods Most Used in Online Shops According to E-Commerce Merchants, in % of Surveyed E-Commerce Merchants, June 2017
Perception of Increase in Credit Card Payments in Online Shops Over the Previous Year According to E-Commerce Merchants, in % of Surveyed E-Commerce Merchants, June 2017
Reasons for Not Offering Credit Card Payments in Online Shops, in % of Surveyed E-Commerce Merchants Who Do Not Accept Credit Card Payments in Their Shops, June 2017
Problems Most Commonly Encountered by E-Commerce Merchants, in % of Surveyed E-Commerce Merchants, June 2017
Delivery Problems Encountered by E-Commerce Merchants, in % of E-Commerce Merchants Who Face Problems With Delivery, June 2017
Most Common Customer Complaints According to E-Commerce Merchants, in % of Surveyed E-Commerce Merchants, June 2017
Share of Online Shoppers Who Believe Click & Collect Is Important, in %, Compared to the Regional Average, 2016
B2C E-Commerce Players Overview, January 2018
Website Traffic Shares of the Leading Online Shopping Websites, in %, February 2015 & February 2017
Market Share of The Leading B2C E-Commerce Market Player, in %, 2015 & 2016
Saudi Arabia to Become Leading B2C E-Commerce Market in GCC
B2C E-Commerce in Saudi Arabia is nascent, accounting for only a small one-digit share of total retail sales. However, the country’s young population, high connectivity rates and advanced infrastructure are projected to propel the growth of E-Commerce sales over the next several years. By 2020, Saudi Arabia is expected to outpace the UAE as the largest online retail market in the Gulf Cooperation Council (GCC), according to a forecast cited in report.
In 2017, more than three-quarters of the population had Internet access, and around nine in ten adults owned a smartphone. Internet-enabled mobile phones play an important role in the development of B2C E-Commerce in Saudi Arabia. With the majority of individuals using a smartphone to go online, nearly all of online shoppers made a purchase using this device, as yStats.com’s report reveals. Furthermore, smartphones are used by Saudi consumers to check prices and product reviews, while shipping companies rely on geolocation coordinates sent via mobile messaging services rather than on postal codes to deliver E-Commerce orders to customers.
Two other important trends affecting the growth of online retail in Saudi Arabia are social commerce and cross-border shopping. Consumers in Saudi Arabia are active social media users, with Facebook, Twitter and Instagram ranking among the ten most visited websites in the country. Consequently, major online and offline retailers, as well as independent sellers use these platforms to market their offerings. Between one-third and one-half of online shoppers in Saudi Arabia made purchases from social media sites, according to a survey from early 2017 cited by yStats.com.
Regarding cross-border purchases, nearly two-thirds of online shoppers in Saudi Arabia buy on websites from other GCC countries, while nearly 50% shop on overseas websites. As a result, Amazon.com, eBay.com and Aliexpress.com are among the ECommerce sites most visited by Internet users in the country. Nevertheless, regional player Souq.com, acquired by Amazon in 2017, continues to hold the highest market share in Saudi Arabian B2C E-Commerce.