Although e-commerce is still emerging in Saudi Arabia, there is a remarkably increasing trend among investors and companies to adopt and implement it. This has been reinforced by the widespread penetration of smartphones and social media, which is one of the main marketing channels for e-commerce. This came after the adoption of the electronic commerce concept among all government sectors and some private entities. Therefore, this contributed to an increase in consumer awareness and acceptance for these types of transactions.
Social Media & Smart Devices:
The popularity of e-commerce activities in recent years is attributed to several important factors, most notably the spread of smartphones and social media. It is no longer necessary to sit in the office and use the computer to buy and trade products and services as before. The process to view products, place an order and follow-up on the shipment may all be completed now simply using a smartphone.
Consumers in Saudi Arabia have recently become aware of what is called a "shopping tradition,” where shoppers have the opportunity to browse products online and compare their features and prices, which may reach a 50% difference between them and local stores.
The difference between what electronic stores and local markets have to offer has become clear to consumers. Electronic stores typically offer more options and advantages, providing consumers with special features such as adding and canceling items and browsing price differences directly.
Community Awareness & Challenges:
There are several challenges facing the e-commerce sector, including the core infrastructure of e-commerce, logistics, e-payment services, reliability, and credibility.
Although the situation continues to improve, the environment needs more support as e-commerce is increasingly taken into consideration.
There is a noticeable improvement in the shipping, delivery and payment services. Although some shops have overcome the payment issue by creating a payment method on delivery, the overall awareness of online payments is gradually becoming a common concept. The Kingdom is directing the concept of e-government and online payments through payment channels for government services, which has raised the acceptance of consumers to new payment solutions and their confidence in them. Currently, the Ministry of Commerce and Industry is working to legalize electronic stores and business accounts of social networks, which will contribute to the development of this new market. This will eventually raise the level of activity in terms of confidence and quality and raise the level of reliability and consumer satisfaction to provide a secure e-commerce environment.
The total value of e-commerce between 2014 and 2015 exceeded the upper limit of $1.5 billion. The size of the e-market in the Kingdom amounted to $ 1.5 billion (SAR 5.6 billion), while the number of online shoppers reached 10.6 million, 61 million of whom 39 per cent are male and 39 percent female. In terms of payment methods, the data indicated that debit and credit cards accounted for 26 percent, cash in receipt of 59 per cent and other payment methods of 15 per cent.
The percentage of purchases through electronic commerce in the Kingdom in the electronic appliances sector was 38% of the total purchase rate.