Saudi Arabia’s e-commerce industry will expand at a compound annual growth rate of 20.9 per cent within the next four years, market intelligence company Renub Research said.
The kingdom’s online retail revenue is expected to reach $20 billion in 2027.
Retailers will be able to cash in on the growing e-commerce industry, thanks to a 99 per cent internet penetration rate in the country, which reached 36.31 million people in January this year.
In the same month, Saudi Arabia also boasted 29.10 million social media users, accounting for 79.3 per cent of the total population.
Furthermore, there were 42.50 million active cellular mobile connections in Saudi Arabia in early 2023, which equates to 115.9 per cent of the total population.
Fashion stands out as a key sector in Saudi Arabia’s retail market, a report by Renub documented.
Riyadh and Jeddah will contribute most toward the country’s growing e-commerce customer base.
“Both men and women show a growing interest and purchasing intent for clothing, apparel, footwear, and accessories. The country’s young population, in particular, is driving this trend, contributing to one of the world’s fastest-growing retail markets. E-commerce represents the most significant opportunity for fashion, with numerous new online retailers and traditional brick-and-mortar businesses pursuing omnichannel strategies,” Renub said.
The growth of the online fashion market can be attributed to immersive tools like 3D try-and-buy technology.
With two-thirds of Saudi Arabia’s population being under the age of 35, the country is undergoing a surge in digital payments as well.
Government initiatives are also contributing to this growth.
As part of Vision 2030, Saudi Arabia aims to accelerate its digital economy and increase cashless transactions to 70 per cent by 2025.
The Saudi Ministry of Finance also unveiled a strategy aiming to triple the number of fintech firms from 82 to 230 in the next two years.
These new startups will offer a broad spectrum of services to private, corporate, and government partners.
