Economists confirm that e-commerce in Saudi Arabia is experiencing a high growth, estimating its value at SR15 billion per year. The size of the market is expected to increase at high rates in the coming years due to the eradication of trading obstacles, creating an ideal solution for buying low priced items and with minimal effort.
The Kingdom is progressing the fastest among all the Arab countries in the field of e-commerce as witnessed by the significant expansion in this area during the past two years, according to sources. The progress is due to the support of development in communications technology, and has allowed the acquiring of various goods at lower prices compared to what exists in the market.
However, a number of risks and challenges are associated with shopping online, namely the possibility of the leakage credit card information abroad, the incompatibility of expectations and the product received, and the new nature of this type of shopping. Also, some challenges emerge as a large number of shoppers, especially women and girls, must adjust their desire to preview the goods themselves before purchasing them. The high price of Internet connections in the Kingdom, as compared to the other developed countries, is also a problem.
Fadl bin Saad Al-Buainain, an economic expert, estimated the volume of e-Commerce trade in Saudi Arabia to be more than SR15 billion annually, adding that the Kingdom is advancing with all Arab countries in this area, and ranks first among Arab countries in terms of e-procurement practices.
Albuainain indicated that e-commerce in Saudi Arabia has witnessed significant growth over the past two years as a result of support in the development of technology and of direct communications with global retailers. Such expansions, he confirmed, will allow for the purchase of international brands, mostly apparel and electronic devices. Price is the main factor and that is motivating citizens toward e-procurement instead of buying locally.
Regarding the risks associated with shopping online, these risks are reduced when dealing with the known international companies, he said.
Abdul Rahman Al-Soniaa said that online shopping during Eid Al-Fitr saw an increase in sales volume exceeding SR300 million. According to Al-Soniaa, e-Commerce faces three hurdles — the novelty of this type of trade and the difficultly in building the trust of the shopper in a short period of time, the fear and apprehension toward e-procurement, especially with regard to credit card usage, and the adjustment from being able to preview goods in person prior to purchase.
The goods offered online do not compete with local markets in terms of the number of options offered, whether clothes, shoes, perfume or other goods, he added.
As an expert in the field of e-commerce, Mohammed Al-Sheheri, stated that the reasons behind delaying the growth of e-Commerce in Saudi Arabia is the higher prices of Internet connections, which are still too high and expensive compared to prices in developed countries.
“The cost of providing fiber optic service to homes in the Kingdom is double the cost in a country like the United States of America,” he said, adding that Internet prices in Saudi Arabia should decrease at a very fast rate. He also stressed the importance of issuing laws and regulations to protect both the seller and customers on the Internet, which could resemble similar laws in other countries with slight modifications to fit the Saudi market.
