E-commerce spending in Saudi Arabia is booming and expected to grow multiple times shortly, a new report from the Saudi telecom regulator has revealed.
According to the Saudi Communications and Information Technology Commission (CITC), Saudi’s business-to-consumer (B2C) e-commerce spending was more than SAR29.7 billion ($7.9 billion) in 2016.
“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.
According to the report, the typical shopper in Saudi Arabia spends an average of SAR4,000 online per annum, driven by favorable internet offers, home delivery convenience and a wider range of products.
The report noted that while e-commerce markets in MENA, India and Central Europe make up only 2.5% of global e-commerce spending, they account for a high-growth potential in the industry.
According to another report by consulting firm A.T. Kearney, MENA’s online retail industry is set to have a market size of $20 billion in 2020.
The boom is expected to be driven by two powerful players, Amazon’s Souq.com and Saudi-backed Noon.com, as well as smaller but potent upstarts like Wadi.com.