It makes sense that the largest economy in the Middle East is also expected to take the lead for the biggest eCommerce market in the region.
The Kingdom of Saudi Arabia represents the largest economy in the Middle East, and contributes nearly 30 percent of the total GDP in the Arab world. However, similar success does not translate to its eCommerce sales. New merchants and startups in country commonly cite Saudi Arabia’s moderate growth in the eCommerce sector. Stakeholders cite lack of public trust, absent regulations and frameworks, and poor consumer awareness of online shopping as the most challenging hindrances.
Despite these difficulties, a new study by the Qatar Foundation and Northwestern University indicated that Saudi Arabia may be in the running for eCommerce leadership after all.
According to Wamda, Saudi Arabia is presently the second largest eCommerce market in the Gulf Cooperation Council. In 2011, the market received $520 million in online sales.
The study included results from eight countries across the Middle East, and of all the contenders, Saudi Arabia proved to have the greatest potential for eCommerce opportunity. Overall, Saudi consumers are buying products online and making bill payments online more than any other Arab country.
The growth of Saudi Arabia’s eCommerce sector is largely due to its accommodating online payments system. Saudi offers one of the largest ranges of payment gateways in its region. The payment network includes PayPal, Skrill, CashU, Gate2Play, Cashi and several others. Additionally, the study indicated the Kingdom has the highest percentage of credit card payments and the second lowest rate of consumers who are scared to make credit card payments for online purchases.
Saudi consumers are becoming more open-minded about shopping online as the polls show consumer purchases are continuing to rise. In 2011, 39 percent of Saudi Internet users (three million consumers) reported to have made a purchase online. New businesses, partnerships and entrepreneurs are expanding and starting operations in the Saudi market, which will further encourage eCommerce sales.
As the statistics show, the promising Arab country is likely to continue to encourage more entrepreneurs and overseas merchants. Ambitious stakeholders will fight to take advantage of the growing consumer interest in Saudi Arabia and the country’s sophisticated online payment infrastructure.
To read the full story at Wamda, click here.