The Saudi Communications and Information Technology Commission (CITC) estimated the kingdom’s business-to-consumer (B2C) e-commerce spending to be worth more than 29.7 billion Saudi riyals ($7.9 billion) in 2016, a recent report published by the authority said.
“Saudi Arabia’s young population, increasing broadband and smartphone penetration rates, and the government’s growing focus on e-commerce are key factors that are driving this shift toward online buying in the country,” the report said.
The typical shopper in Saudi Arabia spends an average of 4,000 riyals online per annum, the report said, driven by favourable internet offers, home delivery convenience and a greater range of products.
E-commerce markets in MENA, India and Central Europe make up only 2.5 percent of global e-commerce spending, the report notes, yet they account for a high-growth potential in the industry.
The MENA region’s online retail industry is set to have a market size of $20 billion in 2020, according to consultants A.T. Kearney.
Online sales in Saudi Arabia alone are expected to rise to $13.9 billion by 2021 from around $8.7 billion this year, Reuters reported last month, quoting an industry analyst.
Two powerful players, Amazon’s and Saudi-backed battle for the Middle East e-commerce market dominance. Yet observers have argued that the regional market has enough capacity to sustain both players.
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© ZAWYA 2017