Saudi Arabia’s tech-savvy and growing young population make the Kingdom a key market player for anyone or any company wanting to start an e-commerce business in Saudi Arabia. The Kingdom’s e-commerce growth is geared toward continuous growth. A high smartphone penetration rate (97%), advanced mobile broadband internet subscriptions, and tenth global ranking for internet speed give out a favorable environment for setting up an e-commerce business in Saudi Arabia. The Saudi e-commerce market is estimated to rise to US$ 22.01 billion, with a 13.5% retail market share by 2027, faster than the global growth rate of 11.2%. In the first half of 2023, 35,000 commercial licenses were issued, and the venture capital raised $428 million, up by 153% from the previous year, giving way to more e-commerce companies to enter the market.
With more than a decade’s experience in helping ventures setting up businesses in different countries, Analytix aim to guide you through the whole process on how to start an e-commerce business in Saudi Arabia through this blog.
Benefits of Starting an E-commerce Business in Saudi Arabia
Let’s take a look at the benefits of setting up e-commerce business in Saudi Arabia
- Large & growing Market: The e-commerce sector is expanding tremendously because more and more firms are starting an e-commerce business in KSA. Observing the current trends, there is an increasing need for online shopping among customers. In 2024, the internet users in Saudi Arabia will reach 33.6 million, representing a 42% increase from 2019.
- Affordable Operating Costs: E-commerce companies usually have low overhead costs since they don’t require stores or offices, which reduces the rent and maintenance costs.
- Access to Worldwide Markets: Due to the robust logistics and shipping infrastructure in Saudi Arabia, the e-commerce business sector is recognized worldwide.
- Promising Future: As an emerging market, like any other market, the Saudi e-commerce market also has its share of challenges. That’s why the government announced plans to invest SAR 100 billion (USD 28 billion) to speed up the growth of the sector, especially in logistics, and also to adopt friendly e-commerce regulations.
- Increasing Internet Penetration: In Saudi Arabia, more than 90% of the population have internet access, which ranks the Kingdom among other countries with the highest internet usage.
- Rising Disposable Incomes: The young and growing population and the increase in disposable income pilot towards online shopping demand.
- Growing Awareness of Online Shopping: The Saudi consumers are gradually being more aware to the advantages of the online shopping, like the convenience and low costs.
- Shift to Online Payments: Vision 2030 proposed that 70% of transactions be through cards and online platforms, thereby minimizing cash on delivery’s reign.
- Educational Initiatives: In 2023, PepsiCo collaborated with MCIT and AstroLabs to bring forth the PepsiCo ScaleUp e-commerce program and fast-track one hundred Saudi businesses on their online journey.
How to Start an E-commerce Business in Saudi Arabia
Starting an e-commerce business in KSA needs a proper strategy and execution. Here’s a step-by-step guide to help you start an e-commerce business in Saudi Arabia successfully:
Choose a proper business plan and model
Select the e-commerce business model you want for your business, either Business-to-Business (B2B) or Business-to-Customer (B2C). To meet the needs and preferences of your target audience, customize your offerings.
Set a name for your Brand
Choose a unique name for your e-commerce brand and make sure it aligns with your business vision and values. Check thoroughly for the availability of the domain and trademark.
Specify the Products/Services
List the products or services by type, brand, features, and more. Set a systematic inventory management system to systematize the operations.
Create your E-commerce website
Create a user-friendly and visually attractive e-commerce website to show your products or services. Use trustable e-commerce platforms like Shopify, BigCommerce, or WooCommerce for effortless development.
Register with Ministry
After you have finalized your domain and name, go through https://mc.gov.sa/en/Pages/default.aspx and follow the instructions mentioned for registration.
Content and Product images
Write engaging product descriptions and design high-quality images to attract potential customers. For improving visibility of your website on search engines, optimize your website content.
Payment Gateways
Incorporate secure and convenient payment gateways for smooth transactions. Provide various payment options to cater to different customers’ preferences.
Social Media Marketing
Social media platforms are a good way to promote your business and engage with your target audience. Develop a social media marketing strategy to get more people to notice your brand and visit your website.
Last Mile Delivery
Partner with a trustworthy logistics company to deliver products to your customers safely and quickly. The customers should be able to easily track their orders.
Customer Service
Customer satisfaction should be your priority and to commit to that provide prompt support and solution to any issue that may arise. Create a channel through which customers can give their feedback which will give you an idea of which areas to improve and get better.
Analytix Help You in Setting Up E-commerce Business in Saudi Arabia
The idea of starting an e-commerce business in KSA seems exciting but it needs careful planning and expertise in the local market. That’s where we, Analytix, come in!
With over 15 years of experience, we understand the Saudi market inside and out, giving your business the guidance and support it needs to succeed. We’ll be there for you at every step of the way even after setting up e-commerce business in Saudi Arabia, offering a wide range of services so that you can focus on expanding your empire, while we take care of the everything else.
Conclusion
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We hope we’ve covered all the points necessary.
If you have any doubts or feel like we missed mentioning something, let us know in the comments or book a free consultation with us and we’ll answer all your queries.
Happy Reading everyone!
