Electronic trading the new normal in Saudi Arabia

Electronic trading the new normal in Saudi Arabia
The number of e-commerce users in Saudi Arabia reached 12.5 million by 2017. (Shutterstock)
Updated 05 November 2018

Electronic trading the new normal in Saudi Arabia

Electronic trading the new normal in Saudi Arabia
  • Saudi Arabia promotes e-commerce for small traders
  • Maroof business-registered users have  increased to 20,000

RIYADH: The number of online stores registered on Maroof has increased to 20,000 in 15 diversified activities, according to a Ministry of Commerce and Investment 2018 third quarter report.  

The Maroof platform is an initiative that began in April 2016 to support e-commerce in the Kingdom under the supervision of the Ministry of Commerce with the cooperation of Thiqah Business Services as a developer and operator. 

The platform is to ease concerns about payment protection and authenticity of products while shopping online. All brands listed on Maroof comply with Saudi trading rules and regulations, and electronic store sellers are accredited. 

The platform also helps to enhance the quality of e-store services through customer feedback and evaluation, and electronic store owners find that Maroof's free service provides a better opportunity for attracting traffic and sales. 

The top-rated electronic shop on Maroof Nicenesa.com, led by CEO Omar Al-Olayan, answered the question: How did enlisting in Maroof platform influence the growth of your e-shop?

“Gaining the trust of clients in purchasing original products is an essential and valuable factor that the Maroof platform provides us with,” Al-Olayan said. “The initial probability of customers’ purchase before Maroof was 30 percent, and after the addition of Maroof credibility, the rate ratio increased up to 80 percent.” 

Given the increases in the number of registered businesses, it reflects the confidence of both seller and buyers in governmental services such as the Maroof platform to differentiate credible sellers from not-credible ones. This helps to create a healthy business environment that encourages small e-shops growth to achieve the Vision 2030 objective of reaching 35 percent of SME participation in GDP. 

If Maroof continues its implementation of Ministry of Comerce and Investment regulations that protects consumers’ rights, it will encourage the rise of new startups, and escalate the growth of small electronic businesses in Saudi Arabia.

E-commerce has become an integral part of daily life, and according to a report by the Communications and Information Technology Commission (CITC), Saudi Arabia’s business-to-consumer e-commerce spending was estimated at SR29.7 billion ($7.9 billion) in 2016, making the country one of the largest e-commerce markets in the Middle East and North African (MENA) region. 

Forbes Middle East reported that the number of e-commerce users in Saudi Arabia had reached 12.5 million by 2017, and the number is expected to increase to about 12.4 percent by 2020.

In spite of the challenges that face any online store — such as logistics management — Saudis are ready to engage in e-commerce as it has much growth potential, especially with new IT infrastructure that enables the escalation of small businesses through growing organic traffic and selling their products in the MENA region. 

The initiative of governing e-shops through Maroof will result in a sustainable business economy, which is parallel to another goal of 2030 Vision — of promoting local content and creating a vibrant startup e-commerce ecosystem that encourages the creation of new business models and local opportunities such as SMEs and home-based sellers.