Saudi Arabia’s Online Market
The Kingdom of Saudi Arabia (KSA) has the largest number of Internet users of all the Gulf States and presents a great opportunity for brands operating in the KSA or those planning to, to access a young, affluent market that, due to the country’s unique cultural dynamics, can at times be isolated from the rest of the world.
Saudi Arabia Internet Users
In July 2016, Saudi Arabia had 20,813,695 Internet users out of a total population of 32,157,974. That’s roughly as many Internet users as there are in Australia and Malaysia, respectively.
To compare, the UAE (who enjoy the second biggest Internet penetration in the Gulf Region) has 8.5 million Internet users, Yemen 6.7 million, Israel 5.9 and Syria 5.5 million. (Source: InternetLiveStats).
Statista.com projects this number will grow to just under 28 million users in 2021.
Also according to Statista.com, these are the preferred payment methods online shoppers in the KSA prefer to use (2015).
- Cash on delivery (64%)
- Credit card (46%)
- Debit card (11%)
- Direct debit from bank account (9%)
- Store gift card (3%)
- Digital payment system such as PayPal or Alipay (1%)
Ronaldo Mouchawar, Co-Founder of Souq.com, Saudi Arabia’s leading online shopping website told Mastercard.com that Saudi Arabia is the online retailer’s biggest and fastest-growing market. He says they are experiencing ‘record sales’ and enhanced the online shopping experience by offering cash on delivery, free returns and a one-year warranty on all products.
A 2015 MENA region online shopping behavior survey by MasterCard showed Saudis had a slight preference for local websites over foreign websites. Reasons for preferring to shop locally online included concerns over hidden charges and the ability to find everything they need locally.
According to Mouchawar, 30 to 40 percent of sales on Souq.com are made through mobile devices, demonstrating a huge opportunity for growth in this category. Mobile penetration rate in the KSA in 2015 stood at 168%. (Source: Statista.com) The survey showed the products most often bought online via mobile were: airline tickets, phone apps, toys, gifts, clothing, accessories, home appliances and electronic products.
Dubai-based tech company Go-Gulf.com‘s report titled: Online Shopping Trends in Middle East showed 75 percent of consumers believe that their interactions with brands on social media result in them purchasing more from their favorite brands.
Saudi Arabia is one of the largest social media markets in the Middle East, with Facebook, Twitter, YouTube and WhatsApp seeing huge penetration, driven by its young, tech-savvy population that uses social media to interact with their families and friends to, among other things, see what they’re buying.
It’s clear the Kingdom of Saudi Arabia offers huge opportunities, but all online vendors should always take notice of the Kingdom’s Anti-Cyber Crime Law that criminalizes “producing something that harms public order, religious values, public morals, the sanctity of private life, or authoring, sending, or storing it via an information network.”
