Saudi Arabia is making expansive plans to become a major national, regional and international market for ecommerce. That’s in spite of access-to-market issues and other barriers to doing business.

Saudi ecommerce topped $10 billion in revenue in 2023, making the country the world’s 28th largest online market. It’s also on par with its regional neighbor, the United Arab Emirates, says a new regional report from Agility Logistics.

Growth in online revenue in Saudi Arabia is forecasted to expand at 13.5% annually through 2027. That’s much faster than the global growth average of 11.2%. Meanwhile, ecommerce sales are expected to meet and exceed $30 billion by 2027 and $44 billion by 2030.

In key areas such as investment, logistics capacity and shipping volumes, Saudi Arabia is set to establish itself as the region’s new ecommerce leader, according to the report’s authors.

A significant push and subsidies for national infrastructure development are tied to high-level ambitions for ecommerce growth.

Saudi Arabia’s plans include ecommerce

Saudi Arabia’s Vision 2030 strategy contains overarching economic objectives that are driving growth in its digital economy.

It wants to be a global and regional transport and logistics hub. Meanwhile, it is determined to expand non-oil sectors such as local manufacturing and exports.

The country’s Vision 2030 plan singles out ecommerce as a critical lever it needs to foster the expansion of small and medium-sized companies, which account for about 20% of gross domestic product (GDP) in the country.

To address the lack of a domestic logistics network, Saudi Arabia has simplified licensing for domestic delivery providers and created multiple tiers of licenses.

At the same time, fresh investment has poured in to boost warehousing, fulfillment and trucking capacity. Key ministries and agencies have gone paperless by automating processes for digital and logistics businesses, according to the report.

Saudi Arabia’s ecommerce investments

“Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF) has taken sizeable stakes in leading global retailers, e-commerce companies and payments providers, including Noon, Shopify, Pinterest, Walmart, Visa, and PayPal,” according to the report. “And PIF has been the Kingdom’s bridge to China, investing in Alibaba and Pinduoduo, paving the way for their expansion in the Saudi e-commerce market.” Pinduoduo Inc. is a Chinese online retailer with a focus on the traditional agriculture industry.

To boost consumer and business buyer confidence and fight fraud, Saudi Arabia has issued new rules requiring online retailers to offer:

• warranty information on invoices
• multiple payment options
• tracking
• order cancellation procedures
• return-and-refund instructions.

It also cracked down on vendors for failing to provide consumers with contact information, chat options, secure payment channels, complaint-resolution mechanisms and Arabic-language service, the report says.

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