Ecommerce in Saudi Arabia’s retail sector is expected to double between 2020 and 2025, with a compound annual growth rate (CAGR) of 15%.

According to a report by the Small and Medium Enterprises Authority, “As the second-highest venture capital-funded sector in the kingdom, ecommerce is booming.”

The report noted that venture capital funding in ecommerce startups reached $428 million in 2023. “Saudi Arabia is working hard to remove barriers to ecommerce by stimulating fintech and payment solutions, improving IT infrastructure, and enhancing the overall logistics sector,” it added.

In April, the Saudi central bank reported that the share of electronic payments in the retail sector increased to 70% in 2023, up from 62% in 2022.

With support from the Saudi E-Commerce Council, the ecommerce sector is projected to surpass $13.2 billion by 2025.

This aligns with the kingdom’s efforts to attract venture capital and promote SMEs to diversify the economy away from oil.

The report said, “SMEs stand to gain disproportionately from the growth and expansion of ecommerce. From fewer distribution channel obstacles and reduced operating costs to reaching a far greater customer base, SMEs are among the first to capitalize.” 

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