The E-Commerce business has had an enormous economic and societal influence in recent times. Saudi Arabia is one such region that is undoubtedly seeing a shift in the increasing popularity and collaboration in the E-Commerce landscape, with sales increasing by 30% on average annually according to a report by Boston Consulting Group and Meta. The report found that the market value of e-commerce increased from SAR 6 Bn in 2016 to SAR 12 Bn in 2019 which stands at 25 bn in 2022. Saudi Arabia’s E-Commerce market enjoys the strongest position in the appliances and electronics category; it is known to be the 25th largest market.
UAE E-Commerce is Evolving
With time, regulations for the regional e-commerce players have evolved in the interest of the end consumers. To continue operating, all online businesses are to obtain a commercial license from the Saudi E-commerce Council, which was established by the Saudi Ministry of Commerce. The council has stated that all e-commerce businesses in the kingdom – including startups, SMEs, and large-scale businesses – must abide by specific regulations as stated by the authorities.
B2C E-Commerce successfully disrupted brick & mortar stores
In the past few years, E-Commerce has replaced the traditional ways of buying and selling products and services in Saudi Arabia. Changing consumer buying behaviour and habits has led to a permanent shift in the ways end-consumers purchase their products nowadays, quick commerce has taken over. Convenience, availability of products and one place to shop for everything attitude have been the pillar of the success of E-Commerce. Food, beverages and home-related products have seen the fastest growth with increased competition.
Top E-Commerce players making waves in Saudi Arabia
Launched in 2009, AliExpress soon became the world’s most popular marketplace for small businesses and entrepreneurs to sell their products. It is a global marketplace that connects buyers and sellers from all over the world. The success of AliExpress can be attributed to its commitment to transparency, ease of use, and low fees. A wide range of products are available at reasonable prices on AliExpress, this has made it a popular shopping destination.
One of the most popular online marketplaces in the world, MercadoLibre has grown rapidly. It offers a wide range of products, including electronics, fashion, books, and more. With MercadoLibre, one can sell any product or service from their homes or buy from others from anywhere in the world. The online marketplace was created as an alternative to traditional brick-and-mortar stores.
Amazon is a multinational retailer with operations across the globe. It has grown rapidly and quickly to become one of the most popular online buying destinations. Amazon.ae sells electronics, apparel, home and garden, toys, sports equipment, and a variety of other items.
Jazp.com is the Middle East’s most popular online shopping destination. Its diverse product mix includes exclusive in-house collections, sports products, electronics, mobile phones, perfumes, and globally recognised brands. Among the reasons, customers choose Jazp.com is its aspirational product assortment that is affordable at the same time. Authenticity, affordability, and variety are the company’s trademarks.
Originally founded to facilitate transactions between people who wanted to buy or sell items using their personal computers, today eBay is one of the leading online marketplaces with a huge use base. The platform also allows people to buy and sell items that are not available on the market, such as antiques, collectables, or rare items. It has become a trusted platform.
Walmart with its large number of stores across different countries is known for hiring talented people to work in their stores and help customers find what they need easily. Their site allows people to buy anything they want through online auctions. The platform also offers insights into customer behaviour, which can be used to improve customer experience, needs and preferences.
7. Target Corporation
Target has been around for over 50 years and has grown to be one of the largest retailers in North America. The E-Commerce company sells apparel, electronics, home goods, groceries, and more. Target Corporation has been at the forefront of using technology to improve its business. They have been using digital marketing for years now and are continuing to do so by investing in content generation, customer engagement, marketing, and more.
8. Best Buy
Best Buy is a big chain of electronic retail stores that sells a variety of different electronic items. The company has over 1,000 locations in the United States, making it one of the largest retailers. Best Buy provides consumers with the latest technology and gadgets. It provides customers with a wide range of options at low prices, making it one of the few retailers that can do both.
Rakuten is a Japanese company that was founded in 1997 by Hiroshi Mikitani, it operates the largest online marketplace in the world. It offers a wide range of services, including e-commerce, finance, and travel. Over the years, the company has grown to include a variety of online shopping services as well as credit card processing, travel booking, and other businesses.
Newegg is a popular online retailer of computer hardware, software, and consumer electronics. For more than 10 years it has been around and has continued to grow in popularity over the years. Newegg is the largest online retailer in Saudi Arabia that provides a variety of products and services. In addition to offering a wide selection of computers, smartphones, tablets, laptops, desktops, and other electronics, it is also a leader in e-commerce innovation.
B2B E-Commerce is highly attractive
Saudi Arabia boasts one of the youngest populations on earth, making it an ideal target for B2B e-commerce, this has in turn made Saudi Arabia a leading target for IT products and services. B2B e-commerce is an extension of an already massive B2C market. In 2015, a Business Insider report found that Saudis spent over $24 billion on B2C purchases alone. There is immense potential for business owners to capitalize on both B2C and B2B forms of commerce. Although quintessentially, Saudi has been seen as a buyers’ market, it has recently entered into agreements with several companies to help build on its online marketplace. One would wonder what is really working in favour of Saudi’s e-commerce growth. The answer is rather simple;
- Opportunities for collaboration on a wide scale
- High internet penetration and usage of online social channels
- Growth in the local B2C businesses
- Changed shopping behaviour to incorporate the latest technology and trends
- Emergence and ready adoption of diverse Online Payment Options
Challenges in B2B E-Commerce Market
1. Understanding the modern buyer
Purchasing behaviour and patterns have changed with the influx of modern buyers in the region. A modern buyer is tech savvy, more educated and more sophisticated. According to Google’s research, 61% of B2B buyers are millennials, and they will become 75% by 2025. The new generation of buyers is all set to engage with providers and re-write newer ways of transaction.
2. Personalized experiences
Relationship building has been of great importance in business development and success, especially in UAE’s B2B segment. Customer feedback is a great way to understand their likes, dislikes and preferences. The more one knows about their customer’s preferences, the easier it is to target the right product/ services for them. They will keep coming back for more.
3. Buyers have a time-consuming procurement process
Businesses acquire products and services in order to support their operations through procurement. Policies and processes are often clearly defined, and it’s closely monitored and controlled. procurement can include a lot of documents, like contracts, requisition orders, purchase orders, invoices, and more. B2B buyers are doing their research before making a purchasing decision. They spend about 40% of their time researching online before calling a salesperson or going to the store. In fact, almost half (45%) of B2B buyers reported visiting 4-6 sites before deciding on a vendor. Companies should have a non-complex procurement process so that they don’t drive their customers away.
What’s next for Saudi Arabia?
Saudi Arabia’s E-Commerce sector is still at its nascent stage when compared to bigger e-commerce markets such as China, the US and the UK. The opportunities however in Saudi Arabia have a multitude of economic and social benefits. Social Commerce is ready to piggyback on E-Commerce; the social commerce industry is expected to grow at a CAGR of 55/6% during the tenure of 2022-2028. In the region, social commerce has already begun to play a decisive role in transforming society. Marketplaces like Facebook and Twitter are becoming mainstream platforms for buying and selling products. It is only a matter of time before Metaverse and social media platforms take over to become the hub for major consumer transactions along with increased interest from businesses’ virtual presence.
Authored by Richa
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