Boston Consulting Group’s new research shows that the e-commerce market in the region is set to grow to SR50bn by 2025.
Saudi Arabia’s e-commerce market is forecast to exceed SR50bn by 2025 after witnessing rapid growth in recent years. Driven predominantly by apparel, electronics and appliances, e-commerce sales have increased by more than 30 per cent on average annually, with growth observed across all categories.
Boston Consulting Group’s (BCG) new research showed that the sector’s market value increased by almost 60 per cent between 2019 and 2020. It added that e-commerce growth in the kingdom largely outpaces that of traditional retail and shows no signs of abating.
However, the segment is still in a nascent phase at present despite undergoing fast growth. In 2020, online sales in Saudi Arabia accounted for approximately eight per cent of total retail sales compared to 18 per cent worldwide. This figure is also much lower than those in leading e-commerce markets where penetration easily exceeds 30-40 per cent.
“The e-commerce market in Saudi Arabia is smaller in comparison to some of the bigger e-commerce markets, such as China, US, and the UK, however, its tremendous potential is already apparent despite its infancy, and the advancement of a robust e-commerce ecosystem in the years ahead will present a multitude of economic and social benefits,” said Pablo Martinez, Managing Director and Senior Partner, BCG.
