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Saudi e-commerce thrives as sales using Mada cards reach $3.76bn in February

 E-commerce sales in Saudi Arabia using Mada cards reached SR14.11 billion ($3.76 billion) in February, marking a 25 percent annual increase, as reported by the Kingdom's central bank.

These transactions encompass online shopping, in-app purchases, and e-wallet transactions but exclude Visa, MasterCard, and other credit card transactions.

Mada functions as Saudi Arabia's national card payment system, aimed at promoting digital payments within the country, particularly in bolstering e-commerce, point-of-sale systems, and ATM usage. Linked directly to the cardholder's bank account, Mada enables secure and real-time transactions for various purposes such as purchasing, cash withdrawals, and online payments.

E-commerce transactions also surged by 44 percent year-on-year to surpass 84 million in February.

The shift in consumer behavior post-COVID-19, coupled with regulatory reforms, robust internet infrastructure, and advancements in e-commerce businesses, has been instrumental in driving the transition away from cash payments.

Over the past three years, online sales in Saudi Arabia have soared by nearly 60 percent across diverse categories, with significant growth observed in media products, apparel, and footwear segments, according to the American International Trade Administration's January commercial guide.

Moreover, the average spending per e-commerce user in the Kingdom surged by more than 50 percent.

The organization forecasts continuous growth, estimating Saudi Arabia to reach 33.6 million e-commerce users by 2024, marking a 42 percent increase from 2019.

Key contributors to this growth include the country's high smartphone penetration rate of 97 percent, substantial mobile broadband subscriptions, and ranking as the 10th fastest country globally for internet speed.

Furthermore, 72 percent of Saudis aged 15 and above possess bank accounts, indicating the population's readiness for digital transactions and online commerce.

The organization highlighted the prominence of local e-commerce platforms and the entry of new players like Amazon Prime, introduced in January 2021.

However, challenges remain for the sector, particularly the need to enhance cybersecurity measures to counter threats like malicious emails and phishing scams, safeguarding sensitive information such as passwords, financial details, and personal data.

The surge in e-commerce became evident during the COVID-19 pandemic, significantly altering consumer behavior and impacting traditional retail outlets. The rise of e-commerce has become essential, providing digital access to products and enabling businesses to adapt to evolving market trends and consumer preferences.

This trend is reflected in data from the Kingdom's central bank, indicating a remarkable surge in e-commerce sales. In 2020, sales surged by 279 percent, from SR10.25 billion in 2019 to nearly SR39 billion.

This momentum continued in 2021 with an annual increase of around 91 percent, reaching SR74 billion, and further rising by 65 percent in 2022 to SR123 billion. By the end of 2023, e-commerce sales through Mada cards had reached SR157 billion, demonstrating the sector's robust growth.

The top five online retailers in Saudi Arabia's e-commerce sector for 2023, according to data from a German e-commerce database website, are,,,, and

These top three online retailers collectively hold a market share of 38.7 percent among the top 100 stores in the Kingdom's e-commerce market, based on net sales for the year 2023.

According to a 2023 Deloitte Digital report, these companies leverage data and analytics to gain deeper insights into their customer base, tailoring their offerings to better meet customer needs.

Saudi Arabia has made significant progress in its e-commerce landscape, transitioning from a population initially lacking trust in online retailers, limited payment options, and product diversity to a thriving e-commerce market, driven by government initiatives aimed at enhancing the digital economy's contribution to the Kingdom's GDP.

The regulatory framework's adaptability and adjustments to market dynamics have fostered an environment conducive to e-commerce growth and the adoption of innovative technologies.

As the industry evolves, new payment methods are emerging, prompting the central bank to establish a sandbox for testing and regulating these innovations, providing a crucial platform for experimenting with new technologies.

Additionally, initiatives such as dedicated sandboxes for delivery applications have streamlined operations and enhanced efficiency for e-commerce businesses.

Major players like STC entering the market and partnerships like Aramco's collaboration with Google Cloud have further supported the e-commerce ecosystem, facilitating infrastructure for all participants.

The establishment of free zones has also played a pivotal role in simplifying logistics and expediting goods movement, contributing to Saudi Arabia's flourishing e-commerce landscape.

Deloitte anticipates significant growth in the sector, projecting a market volume of $23.46 billion by 2027. Moreover, the number of e-commerce users in the Kingdom is expected to reach 34.5 million by 2025, with increasing user penetration.

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