ECOMMERCE

STRONG ECOMMERCE WORKS IN TANDEM WITH SAUDI’S DIGITAL FOCUS

Saudi Arabia has been named the world’s 25th largest ecommerce market, valued at USD 7 billion, according to ecommerceDB, an ecommerce consultancy firm.

“With an increase of 34%, the Saudi Arabian ecommerce market contributed to the worldwide growth rate of 29% in 2020. Revenues for ecommerce continue to increase,” the research website stated. “New markets are emerging, and existing markets also have the potential for further development. Global growth will continue over the next few years. This will be propelled by East and Southeast Asia, with their expanding middle class and lagging offline shopping infrastructure.”

According to ecommerceDB, namshi.com was the kingdom’s biggest digital commerce platform, with net sales of USD 126 million, followed by Jarir.com at USD 91 million. Coming in third was extra.com with USD 64 million in net sales last year, while global ecommerce giant amazon.com took the fourth spot with USD 52 million.

“It has been predicted that the compound annual growth rate (CAGR 20-24) for the next four years will be 8%. Compared to the year-over-year growth of 34%, this decrease suggests a moderately flooded market,” noted ecommerceDB. “Another indicator of market saturation is the online penetration of 69% in Saudi Arabia; in other words, 69% of the Saudi Arabian population have bought at least one product online in 2020.”

The Saudi government is also pursuing a five-year strategy to develop smart government and rollout state-of-the-art telecommunication systems and ICT technology to facilitate the country’s digital transformation.

The country has embarked on two five-year ‘First Action Plans’ for 2006-10 and 2012-16, while the third Action Plan 2020-2024 aims to realise a digital-first government.

“The Smart Government Strategy (2020-2024) defines the kingdom's aspiration, vision, objectives, initiatives, and action plan. Most strategic initiatives are geared towards achieving SDGs by taking actions and innovative approaches to align with the UN Sustainable Development Goals (SDGs) and the Saudi Vision 2030,” according to the government.

The strategy aspires to achieve the following:

• deliver a unified and world-class smart serviceexperience;
• provide all public servants with leading smart capabilities;
• equip leaders with insights to solve tomorrow's challenges today;
• deliver the future through a digitally capable, inclusive workforce;
• fast track digital through an ecosystem of partners; and
• make use of shared resources to deliver more for less.

In an effort to make digital services widely available in the kingdom by 2024, the government is also pursuing the digital-by-default strategy, which ensures that digital channels will be the primary means to provide services to consumers and businesses, although the government will ensure that those without the ability to go digital will also be included in the service.

“The high level of Internet penetration with approximately 98% of the population covered with 4G, with plans to have more Internet coverage by 2024 and assuming a relatively high individual Internet users percentage (83%), allows the government to move the focus toward implementation of the ‘digital by default’ approach and ‘mobile-first’ strategy,” according to the GOV.sa, the unified national platform. “Both are identified as key priorities that can be implemented in the provision of governmental services by 2024.

 

Saudi corporations are also introducing new digital services, especially as the country’s telecommunication companies roll out 5G services.

5G wireless technology delivers peak data speeds, ultra-low latency, more reliability, massive network capacity, increased availability, and a more consistent user experience. Higher performance and improved efficiency empower new user experiences and connects new industries.

GSMA, a global body that tracks the development of technology, states that Saudi Arabia had the highest ratio among GCC countries in the first quarter of 2021.

“We compared Saudi Arabia’s median download speed over 5G with an average of 5G download speeds around the world during Q1 2021 and found that Saudi Arabia’s 5G is 127% faster at 322.42 Mbps,” GSMA said.

Last year, 5,358 new 5G towers were installed across the country, bringing the total to 12,302 by the end of the year.

“This number is set to grow as the allocation of spectrum for commercial uses continues to increase, as does the demand for faster Internet services,” the my.gov.sa noted.

The government is also exploring a number of areas in the digital space. From cloud to automation, robotics and digital payments, the technology sector in the kingdom is expanding at an exponential rate to ensure that it is ready to serve as a springboard for Saudi Vision 2030’s other goals.