e-commerce is an increasingly viable sales channel for U.S. companies in Saudi Arabia.  According to Boston Consulting Group (BCG) and Meta, in 2020, online sales accounted for six percent of the total retail sales in Saudi Arabia compared to 18 percent in leading e-commerce markets.  At the same time, however, online sales in Saudi Arabia increased almost 60 percent on average across all categories, most significantly in the media products, apparel, and footwear segments.  Moreover, the average spend per e-commerce user in Saudi Arabia increased more than 50 percent during the past three years.

Saudi Arabia’s e-commerce channel is primed for continued growth.  By 2024, the number of Saudi internet users for e-commerce (selling and buying) is expected to reach 33.6 million, an increase of 42 percent from 2019.  Saudi Arabia boasts one of the highest smartphone penetration rates (97 percent) in the world, its mobile broadband internet subscriptions are higher than the majority of advanced markets, it ranks tenth in the world for the fastest internet speed, and a relatively high share (72 percent) of its population that is over the age of 15 possesses a bank account.  While local e-commerce platforms dominate the Saudi market, new players are entering – including Amazon Prime, which entered Saudi Arabia in January 2021.  Importantly, the Saudi Arabian Government is taking steps to strengthen Saudis’ confidence in e-commerce and to spur the use of e-commerce platforms by strengthening the country’s e-commerce regulatory environment to protect consumers and companies. 

While Saudi Arabia’s e-commerce channel is a viable option for selling products and services in Saudi Arabia, U.S. companies should be prepared to address certain challenges.  For instance, Saudi consumers generally favor cash payment on delivery rather than credit card payment at the point of sale on the Internet.  Additionally, Saudi Arabia is the second-largest global market for malicious e-mail, requiring the need for improved cybersecurity to mitigate this risk.