Saudi e-commerce valued at SR15bn annually

Saudi e-commerce valued at SR15bn annually
Updated 30 August 2013

Saudi e-commerce valued at SR15bn annually

Saudi e-commerce valued at SR15bn annually

Economists confirm that e-commerce in Saudi Arabia is experiencing a high growth, estimating its value at SR15 billion per year. The size of the market is expected to increase at high rates in the coming years due to the eradication of trading obstacles, creating an ideal solution for buying low priced items and with minimal effort.
The Kingdom is progressing the fastest among all the Arab countries in the field of e-commerce as witnessed by the significant expansion in this area during the past two years, according to sources. The progress is due to the support of development in communications technology, and has allowed the acquiring of various goods at lower prices compared to what exists in the market.
However, a number of risks and challenges are associated with shopping online, namely the possibility of the leakage credit card information abroad, the incompatibility of expectations and the product received, and the new nature of this type of shopping. Also, some challenges emerge as a large number of shoppers, especially women and girls, must adjust their desire to preview the goods themselves before purchasing them. The high price of Internet connections in the Kingdom, as compared to the other developed countries, is also a problem.
Fadl bin Saad Al-Buainain, an economic expert, estimated the volume of e-Commerce trade in Saudi Arabia to be more than SR15 billion annually, adding that the Kingdom is advancing with all Arab countries in this area, and ranks first among Arab countries in terms of e-procurement practices.
Albuainain indicated that e-commerce in Saudi Arabia has witnessed significant growth over the past two years as a result of support in the development of technology and of direct communications with global retailers. Such expansions, he confirmed, will allow for the purchase of international brands, mostly apparel and electronic devices. Price is the main factor and that is motivating citizens toward e-procurement instead of buying locally.
Regarding the risks associated with shopping online, these risks are reduced when dealing with the known international companies, he said.
Abdul Rahman Al-Soniaa said that online shopping during Eid Al-Fitr saw an increase in sales volume exceeding SR300 million. According to Al-Soniaa, e-Commerce faces three hurdles — the novelty of this type of trade and the difficultly in building the trust of the shopper in a short period of time, the fear and apprehension toward e-procurement, especially with regard to credit card usage, and the adjustment from being able to preview goods in person prior to purchase.
The goods offered online do not compete with local markets in terms of the number of options offered, whether clothes, shoes, perfume or other goods, he added.
As an expert in the field of e-commerce, Mohammed Al-Sheheri, stated that the reasons behind delaying the growth of e-Commerce in Saudi Arabia is the higher prices of Internet connections, which are still too high and expensive compared to prices in developed countries.
“The cost of providing fiber optic service to homes in the Kingdom is double the cost in a country like the United States of America,” he said, adding that Internet prices in Saudi Arabia should decrease at a very fast rate. He also stressed the importance of issuing laws and regulations to protect both the seller and customers on the Internet, which could resemble similar laws in other countries with slight modifications to fit the Saudi market.


Kuwait plans region’s first city for electric carmakers

Kuwait plans region’s first city for electric carmakers
Updated 01 August 2021

Kuwait plans region’s first city for electric carmakers

Kuwait plans region’s first city for electric carmakers
  • Kuwait Ports Authority noted that electric carmakers do not use local distributors or dealers

DUBAI: Kuwait Ports Authority (KPA) has approved a proposal to build the Middle East’s first city to serve electric vehicle manufacturers, the authority said in a statement on Sunday.

The statement does not make clear where the project, called EV City, will be located.

The design and construction tendering process will be during the 2011/22 fiscal year, said KPA General Manager Yousef Al-Abdullah Al-Sabah.

KPA noted that electric carmakers do not use local distributors or dealers and sell their vehicles directly to consumers, adding that it was common for ports to provide certain infrastructure to manufacturers.

“KPA is able to provide all port and logistics services to the biggest global companies manufacturing electric cars,” Sabah said, adding that the project was in line with Kuwait’s Vision 2035 economic diversification plan.

The Public Investment Fund, the sovereign wealth fund of Saudi Arabia, has made huge gains after it invested more than $1 billion in electric carmaker Lucid in 2018.

Lucid Group listed last month after a merger with a blank check company, Churchill Capital Corp IV, in February in a deal that gave the combined company a pro-forma equity value of $24 billion. PIF owns 62.7 percent
of Lucid.


Saudi budget airline expands flights to Bisha

Saudi budget airline expands flights to Bisha
Updated 01 August 2021

Saudi budget airline expands flights to Bisha

Saudi budget airline expands flights to Bisha

RIYADH: Saudi Arabia’s budget airline flyadeal on Sunday launched operations from Dammam to Bisha.

The addition of the new destination to the company’s flight network is part of its expansion plans.

It is a pure low-cost airline, with passengers charged for meals and checked luggage, a model that has so far not had major success in the Middle East beyond UAE-headquartered Air Arabia. The Saudi government owns the airline through state carrier Saudia.

Ahmed Al-Barahim, executive vice president for commercial and customer affairs, vowed to ensure good service for passengers.

He said the airline will continue to expand its fleet and flight network.

Fahd Al-Harbi, CEO of Dammam Airports Co., said healthy competition between airlines will support the Kingdom’s drive to boost domestic tourism.


Saudi Arabia’s net foreign assets rebound from 10-year low on higher oil sales

Saudi Arabia’s proceeds from sales of crude oil increased with the global oil industry gradually recovering from the impact of the coronavirus disease (COVID-19). (Reuters/File Photo)
Saudi Arabia’s proceeds from sales of crude oil increased with the global oil industry gradually recovering from the impact of the coronavirus disease (COVID-19). (Reuters/File Photo)
Updated 01 August 2021

Saudi Arabia’s net foreign assets rebound from 10-year low on higher oil sales

Saudi Arabia’s proceeds from sales of crude oil increased with the global oil industry gradually recovering from the impact of the coronavirus disease (COVID-19). (Reuters/File Photo)
  • The value of Saudi Arabia’s oil exports in May increased by 147 percent to just over SR60 billion from a year earlier

RIYADH: Saudi Arabia’s net foreign assets rose 2 percent in June, recovering slightly from their lowest level in more than a decade as the Kingdom’s proceeds from sales of crude oil increased with the global oil industry gradually recovering from the impact of the coronavirus disease (COVID-19).

Data from the Saudi Central Bank (SAMA) showed the foreign assets — a measure of its ability to support its dollar-pegged currency — rose by SR34 billion ($9.1 billion) to SR1.65 trillion from May to June. Total assets increased by SR16.18 billion to SR1.842 trillion, the central bank said on Saturday.

The value of Saudi Arabia’s oil exports in May increased by 147 percent to just over SR60 billion from a year earlier, while non-oil exports rose by 70 percent, the General Authority for Statistics showed last month.

The recent decline in Saudi Arabia’s foreign reserves to the lowest level in a decade was partly due to a lag between import payments and export receipts, the SAMA’s governor told Reuters last month.

The ratio of SAMA’s total assets at the end of July increased by 0.8 percent over the previous month and amounted to SR1.842 trillion. The rise in total assets is due to the rise in investments in securities abroad, which amounted to SR1.13 trillion, an increase of 0.5 percent over the previous month. The value of foreign exchange amounted to SR271 billion, an increase of 0.2 percent.

Net foreign assets declined significantly in 2020 as lower oil income strained finances and officials transferred $40 billion to the Kingdom’s sovereign fund to fuel an investment spree. The indicator — which topped $700 billion in 2014 after an oil boom increased savings — now stands at SR1.66 trillion.

The state’s general reserve declined during the period 2016 to 2020 from SR640 billion to SR358 billion, due to the increase in projects as a part of the Vision 2030 reform plans. The state is pouring significant funds on projects which will be compensated by future income, Zaed Alfaded, a financial analyst, told Arab News. These income streams are expected to increase with the country diversifying its economy away from oil and its price fluctuations, he added.

The government’s current account dipped from SR89 billion to SR52 billion, and then rose again to SR70 billion, as the government spent on its urgent requirements, Alfaded said.

Central bank data showed on Saturday that the issuance of SAMA bills, an indicator of increased lending to local banks, also declined, which Alfaded attributed to the bank’s plans to contain inflation and direct customers to save and invest. 

This strategy, he said, will reflect positively on the markets for trading in financial assets and other investment assets in the Saudi economy.


Saudi Arabia eyes global tie-ups to tap $20bn in cultural opportunities

In the wake of the G20 meeting last year, Saudi Arabia added culture to the forefront of its investment agenda. (Social media)
In the wake of the G20 meeting last year, Saudi Arabia added culture to the forefront of its investment agenda. (Social media)
Updated 01 August 2021

Saudi Arabia eyes global tie-ups to tap $20bn in cultural opportunities

In the wake of the G20 meeting last year, Saudi Arabia added culture to the forefront of its investment agenda. (Social media)
  • Public-private partnership seen as a means to increase sector’s contribution to GDP

DUBAI: Saudi Arabia is seeking partnership with global partners including leading international museums as it sees its culture sector generating $20 billion in revenues and creating 100,000 jobs, while contributing 3 percent to its gross domestic product (GDP), a senior official said.

In the wake of the G20 meeting last year, Saudi Arabia added culture to the forefront of its investment agenda. The Ministry of Culture, which was established three years ago in the hopes of promoting cultural growth and supporting Vision 2030, sees that the sector has already attracted the interest and engagement of private companies both locally and abroad, Rakan Altouq, head of strategy and policy at the Saudi Ministry of Culture, said in an interview on Sunday.

In addition to the public sector, the private sector is a vital contributor to cultural development and Saudi Arabia will benefit from this new strategy, as it will lead to an increase in its economy. As part of the Ministry of Culture, all 16 sectors with 11 dedicated commissions are engaged now to prepare the groundwork for economic activity. 

The Cultural Development Fund, created by the Ministry of Culture last year, is also a vital tool for bridging the financial gap that exists between public and private sector funding for cultural programs. By using the Cultural Development Fund, a bridge of capital will be provided, he said. Through Invest Saudi and the Shareek program that has been announced across the private sector engagement in Saudi Arabia, all of the targets they have developed cannot be achieved without private capital, and they are contributing to creating the right conditions for capital to invest in the culture sector.

Altouq said that the culture sector should not be evaluated in the same way as other more publicly owned sectors. Nonprofit organizations conduct many private activities, such as the visual arts sector, in the country. Further opportunities exist for establishing infrastructure in digital platforms; such investments have already been initiated by media and other regional companies. 

In the museum sector, the ministry has held numerous discussions with its partners around the world. Soon, the dedicated museum of Saudi Arabia will launch its strategy and seek partnerships with other museums around the world. The Museum Commission will launch its own communication strategy in the coming months to further develop that.

In the national cultural strategy, three main aspirations are outlined: Culture as a way of life, culture as an economic growth tool, and culture as an exchange mechanism among cultures.

As a first step, culture has been developed as a lifestyle in Saudi Arabia through connecting local communities to ensure that all citizens and residents have access to an extraordinary range of diverse cultural offerings in the region while preserving the rich cultural heritage. As for the culture for economic growth, culture will be seen in creative industries, which will allow Saudi Arabia to witness an increase in its GDP by 3 percent by 2030. Lastly, culture for global exchange is engaging the Kingdom and participating in international platforms such as the G20 and UNESCO.     


Saudi Arabia’s Digital Government Authority approves first regulatory framework

It will work on developing the digital capabilities and talents of public sector employees. (Supplied)
It will work on developing the digital capabilities and talents of public sector employees. (Supplied)
Updated 01 August 2021

Saudi Arabia’s Digital Government Authority approves first regulatory framework

It will work on developing the digital capabilities and talents of public sector employees. (Supplied)
  • The framework is the first milestone after the approval of the Saudi Cabinet in March to launch the authority

RIYADH: Saudi Arabia’s Digital Government Authority (DGA) on Sunday said its board of directors approved the first regulatory framework of the digital government.

“The regulatory framework developed by DGA for the digital government will be the basis on which the authority will develop future regulations for the digital government,” DGA Gov. Ahmed Mohammed Al-Soyyan said in a statement. “The framework includes a set of principles, policies, standards, and user guides.”

He added that the DGA is seeking to issue regulations, policies, and standards that contribute to creating a regulatory environment, which enables reaching advanced levels of maturity in the government digital transformation, unify and institutionalize the concept of government policies and standards, provide recommendations to government agencies during implementation, and ensure the adoption of unified tracks for the development of government digital services.

The framework is the first milestone after the approval of the Saudi Cabinet in March to launch the authority. Abdullah Al-Swaha, the Saudi minister of communications and information technology and chairman of the National Digital Transformation Unit, told Arab News’ sister publication Asharq Al-Awsat in an earlier interview that the DGA will help in achieving key objectives, most important of which is augmenting returns on government digital assets and investments. It will also work on developing the digital capabilities and talents of public sector employees.

The framework is based on eight essential principles, including the “Once-Only Principle,” “Digital by Design,” and the “Mobile First.” In addition, it encompasses the Digital Government Policy, which enables and accelerates the sustainable digital transformation of the government sector and enables the successful implementation of the strategic directions of the digital government, DGA said in the statement.

The Digital Government Policy is supported by five sub-policies, including digital governance, it added.

DGA said in the statement that it aims to support the efforts of the government agencies through developing plans, programs, indexes, and measurements related to the works of digital government and integrated digital government services, as well as the government digital market platform. DGA is also responsible for regulating operational, administrational processes, related projects and monitor compliance, it said.