Saudi Arabia’s e-commerce sector is undergoing impressive growth, driven by substantial venture capital investments and increasing user engagement. In 2023, venture capital investments in e-commerce startups reached SR1.6 billion ($426.7 million). This investment surge highlights the sector’s pivotal role in the Kingdom’s broader economic diversification strategy.
According to the Small and Medium Enterprises General Authority (Monsha’at), the number of e-commerce platform users in Saudi Arabia is expected to hit 34.5 million by 2025, marking a 42% increase from 2019. This growth is fueled by a series of national initiatives aimed at fostering innovation and economic expansion, including the establishment of the E-Commerce Council in 2018, which focuses on advancements in financial technology, payment solutions, and logistics.
The sector's contribution to Saudi Arabia’s GDP was 4% in 2020, with 8% of goods and 25% of services purchased online. By the end of 2024, e-commerce revenues are projected to reach SR211 billion. Despite the rapid expansion, e-commerce currently accounts for only 18% of total retail sales, indicating significant growth potential. The sector is expected to contribute 12% to GDP by 2025, driven by a projected 15% compound annual growth rate from 2020 to 2025. Furthermore, by 2030, 80% of transactions in Saudi Arabia are anticipated to be conducted electronically, aligning with the objectives of Saudi Vision 2030.
These developments underscore Saudi Arabia’s strategic focus on digital transformation and innovation, positioning it as a leading e-commerce market in the Middle East and North Africa.
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