Saudi Arabia’s social commerce industry is set to grow by 35 per cent this year, market intelligence company Research And Markets said.
Social commerce is the use of social media platforms like Facebook, Instagram and WhatsApp to market and sell products and services. This type of selling model lets customers complete purchases without leaving social media apps.
This is in contrast to e-commerce, where customers are redirected to an online retail website.
The social commerce industry in Saudi Arabia is expected to grow by 35 per cent on annual basis to reach $1338 million in 2023.
The report added that the social commerce industry is expected to grow steadily over the forecast period, recording a CAGR of 21.7 per cent between the years of 2022 and 2028.
The social commerce gross merchandise value in the country will increase from $1338 million in 2023 to reach $4351.2 million by 2028.
Social commerce — sometimes called s-commerce — was introduced globally in 2005 as a subset of traditional e-commerce. According to the Saudi ministry of commerce and investment, Saudi Arabia was recognised as one of the top 10 countries in the growth of e-commerce in the world.
In fact, the industry grew exponentially during the Covid-19 pandemic, and financial service providers also began supporting social commerce vendors.
Last year for example, financial service provider PayTabs announced that it would support vendors in the UAE and Saudi Arabia who are running social commerce stores. They would be able to receive instant payments over PayTabs social commerce platform, Paymes.
At the time, Neelam Keswani, general manager at PayTabs UAE had said: “Paymes helps the merchant to build a cart for the customer and share it in the same mode they’re communicating with them be it WhatsApp, Instagram, or other social media. This helps the merchant close the deal quicker instead of redirecting them to a website.”
PayTabs is a payments solutions provider founded by Saudi entrepreneur Abdulaziz Al Jouf.
Even bigger financial providers like Telr have invested in social commerce vendors who are based in Saudi Arabia.
According to another report by Forrester, social commerce in the Mena region grew by 70 per cent in 2022, as compared to the previous year.
The report concluded that industry sales are being led mainly by the region’s younger populace, especially those born between the years of 1997 and 2012. The generation — known as Gen Z — is leading the charge.
The report added that Gen Z and Millennials are increasingly shopping on Instagram, WhatsApp and TikTok.
According to Forrester, 29 per cent of people under 25 in the Mena region complete a purchase on a social network at least once a week, compared to 12 per cent of consumers aged 45-54.
The report concluded that vendors who keep up with social media trends will have better online sales as well.
