E-commerce in Saudi Arabia: All You Need to Start With No Risk

In the past few years, e-commerce in Saudi Arabia has witnessed a remarkable rise largely as a result of an appropriate economic environment that provided it with the possibilities of development and expansion.

According to (ecommerceDB), Saudi Arabia is the 30th largest market for e-commerce with revenue of US$9.9 billion in 2021, placing it ahead of Denmark and behind Belgium.

Moreover, it is among the top 10 growing countries in the field of e-commerce in the world, with a growth rate of more than 32%. (global payments inc)

So,

• How to start an e-commerce business in Saudi Arabia’s promising market safely with almost zero risk?
• What do you need to know before you start?
• Which e-commerce platform is best in Saudi Arabia to help you start faster, easier, and with ultimate support?

All these questions and more will be answered in this article.

Let’s start with a quick review of the reasons that catalyzed the growth of e-commerce in this pivotal Gulf and Middle Eastern country.

Reasons for the Growth of E-commerce in Saudi Arabia

To clarify this, we will stand on the most important milestones that contributed to the growth of the e-commerce industry in Saudi Arabia.

Growth of E-commerce in Saudi Arabia Key Milestones 2001- The start of e-commerce in KSA 2014 – The highest e-commerce growth rate 2017 – The first e-commerce exhibition 2018 – Establishing the E-Commerce Council 2019 – Issuing the Electronic Commerce Law 2020 – Launching “Maroof” e-platform 2022 – Government initiative for male and female entrepreneurs[/caption]

In 2001

Since e-commerce activity in Saudi Arabia first began in 2001, the industry has undergone a number of notable developments as a result of providing the necessary legal and regulatory frameworks for its activation.

In 2014

In 2014, Saudi Arabia topped the MENA region with the highest e-commerce growth rate, estimated at 41 % compared to 2012 and 2013.

By launching “Vision 2030” in 2016, e-commerce has gained traction as one of the core pillars that support this vision and motivate investors, businessmen, and owners of small and medium enterprises.

In 2017 & 2018

During the years 2017 and 2018, two e-commerce exhibitions were organized in Saudi Arabia, with 3 core aims:

1. Creating a link between the public and providers of online shopping services.
2. Spreading the culture of investment in the e-commerce sector.
3. Providing an opportunity for Saudi entrepreneurs in this field to display their brands and offer their services and products.

Important steps were taken in 2018 to organize the e-commerce sector and maximize the returns generated from it, by establishing the “E-Commerce Council”, with the aim of unifying the efforts of all government agencies in order to create a stimulating environment for e-commerce in Saudi Arabia.

In 2019

Later, in 2019, the “Electronic Commerce Law” was issued, with 2 key aims:

1. Stimulating and developing this industry in Saudi Arabia.
2. Providing the necessary protection for its transactions from fraud, deception, and misleading, in a way that preserves the rights of both merchants and online shoppers.

Click here so you can download the Ecommerce Low PDF

In 2020

In 2020, the “Saudi Ministry of Commerce” has launched the “Maroof” e-platform as a free service that enables the seller to easily reach a larger group of customers by marketing his store, using all means of communication in a reliable way. Besides giving online shoppers a visualization of the quality of services provided to them by the e-stores.

In 2022

In 2022, a government initiative was launched that allows male and female entrepreneurs and the owners of small and medium enterprises to obtain a free e-store with each commercial registration for a period of 6 months from the date of the application, to allow investors in this sector to expand and spread locally and globally.

Moreover, the availability of suitable technological infrastructure, represented by the penetration of the Internet and the significant increase in the use of smartphones, has improved the chances of expanding the e-commerce market in Saudi Arabia.

These steps and conditions, in addition to encouraging national investors to invest in e-commerce, have also stimulated international suppliers of the e-commerce market to invest in Saudi Arabia, which contributed to promoting the growth of this market.

After we have reviewed the most prominent reasons for the growth of e-commerce in Saudi Arabia, let’s answer the most common question 👇

How Can I Start an E-commerce Business in Saudi Arabia?

When trying to accomplish something, nothing is better than having a checklist.

So, here is a checklist that draws a clear path for you toward obtaining your own business in the field of e-commerce in Saudi Arabia with minimal risk.

Starting E-commerce Business in KSA Checklist

1. Conduct a Feasibility Study

The first step is to do a comprehensive feasibility study on your business, including the following:

• Determine the type and nature of the product or service that you will offer based on the needs and requirements of the target market/audience.

• A comprehensive preliminary estimate of the project budget details and the total costs of all tasks and activities that the business must fulfill.

• Market research includes collecting, analyzing, and interpreting data about the target market, consumers, competitors, and the e-commerce industry as a whole.

2. Review the Relevant Legal Framework

It’s obvious that in order for your business to be legitimate and compatible with the prevailing regulations, you should familiarize yourself with the law regulating electronic commerce in Saudi Arabia.

Saudi legal procedures or conditions for establishing businesses, particularly in the field of e-commerce, are smooth and uncomplicated.

Saudi Arabia’s ministry of commerce is keen to establish conditions and regulations that guarantee the rights of both consumers and merchants in this area. In addition to facilitating binding procedures, it provides many services electronically, which helps merchants save time, effort, and money.

Conditions for Opening an Online Store in Saudi Arabia

The regulatory framework for the activities of the e-commerce industry is represented in the E-commerce Law (Royal Decree No. M/126 July 10, 2019) which controls all electronic commerce transactions in Saudi Arabia and defines the obligations and rights of both merchants and customers.

Here are the key points of the law regulating electronic commerce activities in Saudi Arabia:

• The service provider must have a specific address, which for the merchant is his work address specified in the Commercial Register, and for the practitioner, it is his work address as specified in his e-shop, unless otherwise indicated.

• A service provider’s use of a domain or e-mail address connected to a specific country shall not create a presumption that his business address is located in that country.

• A service provider shall disclose the following in his e-shop:

• His name or any identifying characteristic, and his address, unless he is registered with an e-shop authentication entity;
• His contact information;
• The name and number of his commercial registration, if any, or of any other publicly available register; and
• Any other data specified by the Regulations.

• In order to be able to sell your product, the marketing advertisement for the product must contain the name of the user or his brand and the name of the product in a clear manner.

• A service provider shall provide the consumer with a statement that includes the terms and conditions of the contract to be concluded, in addition to procedures to be taken to conclude the contract, information related to the service provider, basic characteristics of the products or services subject of the contract, and etc.

• The trademark on the product or product must actually belong to you and not a misleading mark, such as using a famous trademark and placing it on your product, doing this exposes you to blocking the advertisement and possibly closing the store in Saudi Arabia.

• A service provider shall not use a consumer’s personal data or electronic communications for unauthorized or impermissible purposes, nor disclose the same to other entities, whether at no cost or for a consideration unless the consumer consents to such disclosure or are required by law.

3. Obtain an Electronic Commercial Register

In the aftermath of conducting a feasibility study for your business, designing its marketing plan, and reviewing the laws regulating it, the first practical step towards launching your e-commerce is to obtain a digital store license (commercial registry).

This step is intuitive and necessary in order to protect your legal business rights and the rights of your customers. In addition, it enables access to acts and facts regarding the legal status of your business, partnerships, and other entities or sole traders.

Do not worry about this step; it is quick and simple in Saudi Arabia, as shown in the next section. 👇

How to Get an E-commerce License in KSA?

You can do this through some smooth steps or procedures approved by the Saudi government to facilitate engaging in electronic commerce and get e commerce license in saudi arabia

These steps can be done electronically according to the following sequence:

• Access the website of the Saudi Ministry of Commerce and Investment to issue electronic commercial registration from here.
• Register on the site.
• Go to the service and select your trade name.
• Register the commercial data required for registration.
• Confirm the data you registered.
• Through the SADAD system, pay the commercial registration fees and the membership of the Chamber of Commerce in a unified invoice.

As soon as you have completed these steps, you will be able to issue your commercial registration with your membership number in the Chamber of Commerce. You can finish it while at home in just a few minutes.

4. Register With Maroof E-platform

After obtaining the commercial register, the next necessary step is to register with Maroof (known) platform. In this way, you can register your store with the Ministry of Commerce.

The purpose of this step is to increase trust between seller and buyer and to increase the chance of your store’s success.

How can you register on Maroof?

You can do this through the following steps

• Enter the platform link from here.
• Click on the “Create Account” icon, and fill in the required information.
• After logging in, click on the “My Business” icon followed by the “Add work” option.
• Fill in the required information and then click on the “Add work” icon.

What are the advantages my business will gain from registering on the “Maroof” platform?

• You will receive an icon to verify your account on your electronic platforms.

• Enhance the reliability of your e-commerce, given that the Maroof site is considered a reliable marketing platform by customers.

• Besides enabling you to obtain a commercial registry, it also allows you to get a gold certificate and add it to your business website or social media sites. This earns it more customer trust.

5. Design Your E-commerce Store

Needless to say that starting e-commerce in Saudi Arabia required having an online store. It’s the online store platform is a pivotal factor in the success of your project.

Successful e-commerce web design can help give customers a better experience, contribute to increasing their levels of satisfaction, and potentially lead to more sales and revenues.

In order for the design of your e-commerce platform to be optimal, the following considerations should be taken into account:

• Giving a positive first impression to users through its attractive appearance, smoothness, and effectiveness.
• Provide an optimized customer experience by ensuring a smooth journey from start to finish, the ease of finding things, and the clarity of links to information and contact.
• Maintaining consistency between the brand and the design across all platforms.

When doing this step, all you have to do is entrust the matter to a reputable company that specializes in this field.

We at Zid, as a leading provider of innovative e-commerce solutions, offer you the ability to:

• Build and design your own online store with your own identity, with an all-inclusive dashboard that enables you to control the operations and appearance of your store smoothly.
• Access endless options for customizing the theme and the way your store looks.

6. Prepare and Configure the Online Store

After completing the procedural matters and obtaining approval to create your store and obtaining the appropriate design for it, comes the stage of preparing and displaying its products.

This is done by accomplishing the following: 

• Photographing products in a professional manner and starting to add them to the store platform. 
• Writing a professional description for each product that includes all its characteristics and features. 
• Pricing products based on the cost and prices of similar products offered by competitors.

We at Zid have excellent experience to carry out this step in a professional and exceptional way.

We have a professional team to help you prepare your online store from the first time you register in Zid and to support you until you upload all your products and set up your store to receive orders.

7. Provide Electronic Payment Methods

Payment operations are one of the most critical elements of e-commerce, as all online business operations depend on them, and for this reason, it must be done effectively based on what suits the requirements and preferences of the target customers.

This is available conveniently and very easily in Saudi Arabia, as the government has facilitated financial services by confirming a number of electronic methods, including Sadad, Saree, and Mada. 

Additionally, there are other electronic payment platforms such as Moyasar, Payfort, Paytaps, and Hyperpay.

We at Zid provide an innovative payment solution that enables retailers to manage orders and online payments seamlessly and effectively in one place through ZidPay, plus our integrations with other national and international payment providers.  

Why should you start using ZidPay for your online store?

When you decide to use a payment gateway for your business, you should use the solution that helps you save time, effort, and costs as much as possible. And this is what you will find with ZidPay, which offers you the following:

• Instant activation.
• Various payment networks.
• No set-up or monthly fees.
• No fixed fee for each transaction.
• Full and partial refunds at no additional charge.
• Plus, fees are inclusive of VAT.

8. Manage Shipping Services

The service of shipping and delivering orders to consumers is a vital element to the success of your online store, as the quality and effectiveness of this service give positive impressions to customers and contribute to increasing their loyalty to your brand.

That is why you should assign this service to the appropriate companies that can carry out the shipping and delivery operations quickly and efficiently.

Zid provides you with the perfect solution to implement this step efficiently through ZidShip.

What is ZidShip and why you need to start using it?

ZidShip is a logistic service that allows retailers to send orders with several shipping companies covering a large number of cities in the Kingdom at competitive prices. 

ZidShip is suitable for all online stores and retailers, whether the number of their shipments is large or small.

Imagine shipping all your orders with your preferred couriers, processing shopping operations with couple of clicks, and managing everything in one place.

Nothing is better than this.

9. Prepare a Marketing Plan

Now, it’s time to promote your e-commerce business.

For a successful and profitable start to your business, you must prepare an effective marketing plan for your products or services that you intend to provide.

The marketing plan visualizes the advertising strategy the business will implement to generate leads and sell its products or services.

It identifies the target market, the value proposition of the brand or the product, the marketing campaigns that will be implemented, and the metrics that will be used to measure the effectiveness of marketing campaigns.

The question now is, how can you promote your e-commerce store the easiest way?

Of course, you don’t need to spend your efforts running marketing campaigns manually and wasting your resources.

That’s why Zid offers you the opportunity to do marketing smartly by offering you:

• The ability to integrate your online store with Facebook and Instagram.
• The ability to send SMS and email marketing campaigns easily.
• The ability to offer your customers discount coupons, promo codes, and other promotional techniques.
• The ability to apply affiliate marketing on your store.
• The tools you need to optimize your store and improve your Google rank.

And much more…

By completing these steps, you will have established your e-commerce business in Saudi Arabia and become a member of one of the most developed and profitable economic sectors in the country, given the vast possibilities of this sector, which we will mention below. 

The Possibilities of E-commerce in Saudi Arabia

The field of e-commerce in Saudi Arabia has abundant potential, as the digital economy has grown significantly over the past few years, and is projected to continue its significant growth over the next stage.

The size of the e-commerce market in Saudi Arabia is expected to reach US$ 20.01 Billion in 2027, expanding at a CAGR of 20.87% from 2022 to 2027. (GlobeNewswire)

This market is relatively diversified as it includes different areas, which contributes to increasing its growth opportunities.

In terms of the composition of the e-commerce market categories in Saudi Arabia, it is, according to (ecommerceDB), as follows:

• Fashion is the largest segment with 32% of the market revenue. 
• Electronics and Media with 28%.
• Food and Personal Care with 24%.
• Toys, Hobby, and DIY with 9%.
• Furniture and Appliances with 6%.

Now let’s answer some of the most frequent questions that you might be interested to learn their answers. 👇

What Are the E-commerce Companies in Saudi Arabia?

Many companies are active in the e-commerce market in Saudi Arabia, the most prominent of which are AliExpress, MercadoLibre, Amazon, Jazp, eBay, and Walmart.

And the top online stores in the Saudi Arabian e-commerce market are Haraj, Namshi, Jarir, extra, and noon.

Which E-commerce Platform Is Best in Saudi Arabia?

According to (Similarweb), haraj.com.sa ranked number 1 and is the most visited e-commerce and shopping store in Saudi Arabia in December 2022.

Is There a Plenty of E-commerce Jobs in Saudi Arabia?

Yes, there is. 

As a result of the large size of the Saudi e-commerce market, and the multiplicity of companies active in it, many job opportunities are available in this field with very high salaries.

Final Thoughts

E-commerce in Saudi Arabia market represents a major force in the global economy, as it is growing at a faster rate than traditional trade, driven by the shift of more companies and consumers towards online marketing and purchasing, taking advantage of smartphone technologies and the continuous innovation and improvement in e-commerce platforms.

Among the promising markets is E-commerce in Saudi Arabia, which has witnessed a remarkable rise in the past few years, largely as a result of an appropriate economic environment that provided it with the possibilities of development and expansion dropshipping in saudi arabia.

The future of this industry looks brighter with 78% of consumers in Saudi Arabia saying they will maintain or increase their current level of e-commerce spending into 2023.

This significant expansion carries with it more opportunities for active businesses in this field.

To enhance your ability to take advantage of these promising opportunities, get in touch with us at Zid to provide you with the innovative digital solutions necessary to achieve your goal.