– Saudi e-commerce startups attracted SR1.6 billion ($426.7 million) in venture capital funding in 2023, signaling robust sector growth.

– E-commerce platform users in Saudi Arabia are expected to reach 34.5 million by 2025, reflecting a 42 percent increase from 2019.

– E-commerce is set to contribute 12 percent to Saudi Arabia’s GDP by 2025, with 80 percent of transactions anticipated to be electronic by 2030.

Saudi Arabia’s e-commerce sector is experiencing significant growth, with venture capital investments in startups reaching SR1.6 billion ($426.7 million) in 2023, according to official data.

A report by the Small and Medium Enterprises General Authority (Monsha’at) forecasts that the number of e-commerce platform users in the Kingdom will hit 34.5 million by 2025, marking a 42 percent increase from 2019 to 2024.

This growth highlights the sector’s pivotal role in the Kingdom’s economic diversification strategy. The transformation of Saudi Arabia’s digital marketplace is part of a broader national effort to promote innovation and boost economic development.

The formation of the E-Commerce Council in 2018 was a strategic step to advance the sector, focusing on financial technology, payment solutions, and logistics improvements. These initiatives have positioned Saudi Arabia as one of the most dynamic e-commerce markets in the Middle East and North Africa.

In 2020, e-commerce accounted for 4 percent of the Kingdom’s GDP, with online purchases comprising 8 percent of goods and 25 percent of services, according to Muhannad Al-Mulhim, a consultant at the Ministry of Commerce. By year-end, e-commerce revenues are anticipated to reach SR211 billion. Despite this rapid expansion, e-commerce currently represents only 18 percent of total retail sales, indicating significant potential for growth.

Looking ahead, the sector is expected to contribute 12 percent to GDP by 2025, with a targeted compound annual growth rate of 15 percent from 2020 to 2025.

Al-Mulhim said: “According to the E-Commerce Council, developments in several key sectors, including infrastructure and the legislative environment, have been driven by programs under Saudi Vision 2030, such as the e-commerce stimulus program. This led to the issuance of the e-commerce system by the Ministry of Commerce.” 

He added: “Additionally, the financial sector development program, in cooperation with the Saudi Central Bank, has resulted in a comprehensive development of the financial technology sector and prompted several transformations in the logistics services sector.” 

By 2030, 80 percent of transactions in Saudi Arabia are projected to be conducted electronically, in line with the objectives of Vision 2030. As the Kingdom advances its ambitious agenda, the e-commerce sector is poised to be a key driver of economic diversification, innovation, and new business opportunities.