Saudi Arabia’s e-commerce market is projected to reach a total size of $29 billion by 2030, growing at a 12% CAGR from 2025. Once an emerging sector, it has now become a critical pillar of the Kingdom’s economic diversification strategy, fueled by digital adoption, fintech innovation, and strong government-backed initiatives.
99% Internet Penetration and Mobile Dominance Drive Online Retail in Saudi Arabia
Connectivity is no longer a luxury in Saudi Arabia—it’s the backbone of commerce. With 99% internet penetration and 48.1 million mobile connections, the country is primed for an e-commerce revolution. Mobile shopping leads the charge, with 65% of transactions happening through apps, as Saudi consumers favor convenience over traditional web-based browsing. Major e-commerce players, from Noon to Shein, have responded with mobile-first strategies, reinforcing the dominance of smartphone-driven retail.
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Digital Payments Surge in Saudi Arabia: 10.8 Billion Transactions in 2023
Money moves differently in the Kingdom. With the rise of fintech and digital wallets, Saudi Arabia’s national payment system processed 10.8 billion transactions in 2023, marking a 24% year-over-year increase. While card payments still account for 45% of e-commerce transactions, alternative solutions such as buy now, pay later (BNPL) are rapidly gaining ground. The shift is fueled by consumer demand for frictionless payment options, setting the stage for a fully digital retail ecosystem.
$426 Million in Venture Capital Fuels E-Commerce Expansion
Investment in Saudi e-commerce startups isn’t just accelerating—it’s breaking records. Venture capital firms injected $426.7 million into the sector in 2023, driving a surge in new business entrants. The number of licensed e-commerce stores rose to 35,314, reflecting a 23% jump since 2020. The momentum isn’t slowing, with projections estimating e-commerce revenues to hit $56.2 billion by the end of 2024, reinforcing the Kingdom’s position as a regional powerhouse in digital commerce.
Growth Opportunities: Food Delivery Market Reshapes Consumer Behavior
Saudi Arabia’s e-commerce boom isn’t just about fashion and electronics—food and grocery delivery are rewriting retail habits. Local giants Hungerstation and Jahez now command 67% of market share, fueled by rising consumer demand and platform-driven innovation. Jahez alone recorded a 31% increase in gross merchandise volume (GMV) in early 2024, surpassing 50 million total orders. With aggressive expansion strategies from startups like Keeta and Ninja, and new partnerships reshaping logistics, the food delivery sector is fast becoming a defining force in Saudi e-commerce.
Logistical Challenges: The Hidden Obstacle to Market Growth
Even as e-commerce accelerates, logistics remain a roadblock. Saudi Arabia’s vast terrain and limited warehousing infrastructure create last-mile delivery inefficiencies, making fulfillment more complex and costly. The sector’s rapid growth—while promising—puts pressure on small and medium-sized enterprises, which struggle with high operational costs. Addressing these gaps will be crucial to sustaining long-term expansion, particularly as expectations around delivery speed and reliability continue to rise.
The Future is E-Commerce: 80% of Transactions Will Be Digital by 2030
Saudi Arabia’s e-commerce market is growing faster than ever, yet there’s still room for significant expansion. Despite record-breaking growth, online retail accounts for just 18% of total sales today—a figure expected to rise as digital transactions make up 80% of purchases by 2030. With government initiatives supporting fintech innovation, infrastructure development, and foreign investments, Saudi e-commerce is on the cusp of redefining retail in the Middle East.
As the Kingdom accelerates toward its Vision 2030 goals, e-commerce will be at the heart of the transformation, unlocking new opportunities for businesses, investors, and consumers alike.
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