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Saudi Arabia’s E-Commerce Booms with 9.4% Growth in Q3

Saudi Arabia’s e-commerce sector continues to thrive, showing a 9.4% increase in registered businesses during the third quarter of 2023. According to the Ministry of Commerce, 39,769 businesses were recorded, with Riyadh leading the way at 16,274. Makkah followed with 10,023 registrations, and the Eastern Province contributed 6,328. This growth underscores Saudi Arabia’s ongoing shift toward a digitally-driven economy. The Kingdom is now among the top 10 global leaders in e-commerce expansion.

E-Commerce’s Role in Economic Diversification

E-commerce plays a pivotal role in Saudi Arabia’s broader economic diversification under Vision 2030. Minister of Commerce Majid Al-Qasabi highlighted that the sector represents 8% of the Kingdom’s total trade volume. By 2025, it is expected to generate revenues of SAR 260 billion. The Kingdom’s fintech sector has also surged, growing by 95%, with more than 170 fintech companies in 2023, compared to just 10 in 2018.

Al-Qasabi, addressing entrepreneurs at the Qassim Chamber, emphasized the government’s commitment to supporting economic sectors, including consumer protection, market regulation, and combating commercial fraud. He noted that Saudi Arabia is using artificial intelligence to enhance its fight against commercial cover-up.

Small and Medium Enterprises and E-Commerce

The General Authority for Small and Medium Enterprises (Monsha’at) is working on six key areas to empower small businesses. These include access to financing, reducing procedures and fees, promoting entrepreneurship, and supporting innovation. Currently, small and medium enterprises hold SR275 billion in credit facilities, representing 8.7% of total lending.

The minister urged businesses to benefit from the upcoming Biban 24 Forum, scheduled for November 5 in Riyadh, as a platform for growth and collaboration.

Venture Capital and Future Outlook

Saudi Arabia’s e-commerce startups attracted SR1.6 billion ($426.7 million) in venture capital funding in 2023, reflecting the sector’s rapid growth. A Monsha’at report forecasts that e-commerce platform users in the Kingdom will reach 34.5 million by 2025, marking a 42% increase from 2019. E-commerce will contribute 12% to the Kingdom’s GDP by 2025, with 80% of transactions expected to be electronic by 2030.

This transformation of Saudi Arabia’s digital marketplace is part of the broader Vision 2030 strategy. The formation of the E-Commerce Council in 2018 has been a key driver of this growth, focusing on payment solutions, fintech development, and logistics improvements. In 2020, e-commerce accounted for 4% of the Kingdom’s GDP, with online purchases comprising 8% of goods and 25% of services.

Vision 2030: The Road Ahead

By 2030, Saudi Arabia aims to conduct 80% of its transactions electronically. This goal aligns with the Kingdom’s Vision 2030 objectives for economic diversification and innovation. The e-commerce sector will continue contributing significantly to the national economy, creating new business opportunities and driving growth across various industries.

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