Saudi Arabia’s e-commerce sector is experiencing significant growth, with venture capital investments in startups reaching $426.7 million in 2023.

According to a report from the Small and Medium Enterprises General Authority (Monsha’at), the number of e-commerce platform users in the kingdom is expected to reach 34.5 million by 2025, marking a 42% increase from 2019 to 2024.

The transformation of Saudi Arabia’s digital marketplace is part of a broader national initiative to foster innovation and stimulate economic growth.

In 2018, the E-Commerce Council was established to advance the sector, focusing on financial technology, payment solutions, and logistics. According to Muhannad Al-Mulhim, a consultant at the Ministry of Commerce, in 2020, the e-commerce sector contributed 4% to the Gulf state’s GDP, with 8% of goods and 25% of services purchased online.

“According to the E-Commerce Council, developments in several key sectors, including infrastructure and the legislative environment, have been driven by programs under Saudi Vision 2030, such as the e-commerce stimulus program. This led to the issuance of the e-commerce system by the Ministry of Commerce,” said Al-Mulhim. 

He added that the financial sector development program, in collaboration with the Saudi Central Bank, has significantly advanced the financial technology sector and led to several transformations in logistics services.

E-commerce revenues are projected to reach $56.2 billion by the end of this year. However, e-commerce sales currently account for only 18% of retail sales in Saudi Arabia, highlighting the need for further expansion.

The sector’s contribution to the country’s GDP is projected to reach 12% by 2025, driven by a targeted 15% compound annual growth rate (CAGR) from 2020 to 2025. Additionally, 80% of transactions in the kingdom are expected to be conducted electronically by 2030.

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