The rise of ‘phygital’ — Saudi e-commerce industry sees Ramadan rush

The rise of ‘phygital’ — Saudi e-commerce industry sees Ramadan rush
This ‘phygital’ approach — combining the best of physical and digital shopping — will define the future of Ramadan commerce in the Kingdom. (SPA)
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Updated 15 March 2025
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The rise of ‘phygital’ — Saudi e-commerce industry sees Ramadan rush

The rise of ‘phygital’ — Saudi e-commerce industry sees Ramadan rush
  • Convergence of cultural roots with digital convenience is reshaping consumer expectations across the Kingdom

RIYADH: Embracing the essence of tradition while adapting to the evolving demands of a digital era, Ramadan in Saudi Arabia reflects a fusion of heritage and modernity.

The convergence of cultural roots with digital convenience is reshaping consumer expectations across the Kingdom, which has a population of 38 million, of whom 70 percent are under the age of 35.

Brands are now tasked with infusing core values such as personalization, community engagement, and generosity into the shopping journey to resonate with this tech-savvy and culturally rich demographic.

E-commerce rush in Saudi Arabia during holy month of Ramadan

According to Janahan Tharmaratnam, partner at Arthur D. Little Middle East, the Kingdom’s digital commerce market — valued at $14 billion in 2023 — is projected to reach $20 billion in 2025, a compound annual growth rate of 20 percent.

“The Ramadan period alone accounts for 35-40 percent higher transaction volumes, driven by a surge in demand for groceries, electronics, fashion, and gifting,” Tharmaratnam said. “The post-pandemic shift to online shopping has solidified consumer reliance on e-commerce, with 77 percent of Saudis now preferring digital-first shopping experiences.”

He went on to say that growth is not just focused on demand — it is also about fulfillment. 

The Ramadan period alone accounts for 35-40 percent higher transaction volumes, driven by a surge in demand for groceries, electronics, fashion, and gifting.

Janahan Tharmaratnam, Partner at Arthur D. Little Middle East

“Logistics networks must scale by 40 percent to meet the Ramadan surge, with nighttime deliveries increasing by 50 percent compared to other months,” he explained, adding that successful businesses do not just ramp up promotions; they optimize artificial intelligence-driven demand forecasting, reduce delivery times by 30 to 40 percent, and integrate micro-fulfillment centers across urban hubs to ensure inventory is closer to consumers.

This shift from centralized warehouses to hyper-local distribution is key to sustaining Ramadan’s retail boom, according to Tharmaratnam.

“A prime example is Jahez, Saudi Arabia’s homegrown quick-commerce platform, which experienced a 70-percent surge in Ramadan orders last year. Instead of simply adding more riders, Jahez used AI-driven logistics to optimize routes, reducing delivery times by 25 percent,” he said. “The platform also expanded partnerships with neighborhood retailers, ensuring customers had access to essentials without supply-chain bottlenecks. This kind of data-driven agility will define the next phase of e-commerce in Saudi Arabia.”

Tharmaratnam said that mobile commerce dominates, accounting for over 90 percent of e-commerce transactions during Ramadan, while social commerce, via WhatsApp, Instagram, and TikTok, now drives 30 percent of online sales.

He went on to emphasize that the real disruption is the shift from transactional commerce to culturally embedded, experience-driven engagement, as traditional Ramadan shopping has focused on physical markets and communal buying.

The partner stressed that today, leading e-commerce players curate AI-driven experiences that align with consumer sentiment. From AI-powered gifting suggestions to influencer-led Ramadan livestreams, brands that focus on storytelling rather than hard-selling see higher conversion rates and customer retention beyond Ramadan.

“A great example is Namshi, a leading Saudi fashion e-commerce platform. Last year, Namshi saw a 45-percent boost in sales conversion rates by combining cultural resonance with digital engagement,” Tharmaratnam said. “The platform launched AI-powered Eid styling recommendations, influencer-led ‘Suhoor Lookbooks,’ and interactive content that blended fashion with tradition. By seamlessly integrating Ramadan traditions into the online shopping journey, Namshi transformed shopping from a necessity into a personalized, experience-driven event.”

Ramadan traditions and online shopping behaviors

There is no doubt that the fundamental values of Ramadan, such as generosity, family bonding, and the distinct pattern of late-night gatherings, have a significant impact on online shopping trends in Saudi Arabia.

According to Joe Abi Akl, partner and head of Oliver Wyman’s retail and consumer practice for  India, the Middle East and Africa, there is a significant spike in demand for essential groceries, traditional fashion and thoughtful gifts, with peak activity occurring post-iftar. 

Expect a significant leap in logistics efficiency, with same-day or even instant delivery becoming more prevalent.

Joe Abi, Akl Partner and head of Oliver Wyman’s retail and consumer practice

“Savvy businesses are capitalizing on this by crafting culturally resonant marketing campaigns, curating Ramadan-specific bundles, and ensuring swift, reliable delivery that accommodates the altered daily schedules. This includes leveraging suhoor and iftar time-focused promotions,” Akl said.

Ian Khan, a technology futurist and author, noted that Ramadan is not just a time of spiritual reflection, it is also a season of significant consumer activity — and retailers in Saudi Arabia are capitalizing on this in remarkable ways.

“Take Mazeed, for example — this e-commerce platform has curated products from over 8,000 local merchants, offering items that deeply resonate with Ramadan traditions. 

“This isn’t just about sales; it’s about creating meaningful shopping experiences that align with cultural values,” Khan said.

Opportunities Ramadan e-commerce poses for businesses

Ramadan presents a prime opportunity for Saudi businesses to forge deeper customer connections through bespoke, culturally sensitive campaigns and exclusive loyalty programs.

Oliver Wyman’s Akl said that the heightened online traffic during this period allows for significant brand building and the refinement of operational efficiencies, particularly in fulfillment and delivery.

“This is also the perfect time to explore cutting-edge technologies like AI-powered chat commerce — which offers personalized customer service — and strategic influencer partnerships that resonate with the Saudi audience,” he added.

ADL’s Tharmaratnam suggested Ramadan is an opportunity not just to increase sales, but to build enduring digital-engagement strategies. 

HIGHLIGHT

Mobile commerce accounts for over 90 percent of e-commerce transactions during Ramadan, while social commerce, via WhatsApp, Instagram, and TikTok, now drives 30 percent of online sales.

“The Kingdom’s population growth — 2.5 percent annually — and urban expansion are driving a fundamental shift in how businesses approach fulfillment, customer experience, and personalization. Instead of treating Ramadan as a short-term promotional window, brands that invest in AI-driven customer retention strategies and logistics optimization will see sustained post-Ramadan growth,” Tharmaratnam said.

“The biggest disruption comes from AI-driven conversational commerce. With WhatsApp and chatbot-based shopping now accounting for 25 percent of digital transactions, brands must rethink how they engage customers,” he added.

Moreover, supply-chain transparency is becoming a differentiator. Real-time delivery tracking and blockchain-enabled halal verification will build trust in Ramadan purchases, especially in the $6 billion halal food and fashion market, the ADL partner highlighted.

“An example of this is Cenomi, Saudi Arabia’s largest retail group, which seamlessly blends physical and digital commerce. By integrating augmented reality shopping experiences, in-store pickup for online orders, and AI-driven product recommendations, Cenomi saw a 30-percent Ramadan sales boost in 2023. This ‘phygital’ approach — combining the best of physical and digital shopping — will define the future of Ramadan commerce in the Kingdom,” Tharmaratnam said.

Khan told Arab News that shopping app installations in Saudi Arabia surged by 67 percent during Ramadan in 2024, in what is “clear indicator” of how mobile-first commerce is shaping the future.

He added: “Consumer spending follows this trend. In 2024, 64 percent of foreign nationals in Saudi Arabia reported higher expenditures during Ramadan, reinforcing the economic impact of the season. And across the Middle East and North Africa, e-commerce transactions shot up by 23 percent, with Gross Merchandise Value climbing 13 percent. This is the power of Ramadan in the digital age — blending tradition with technology to fuel unprecedented growth.”

Ramadan e-commerce projections and alignment with Vision 2030

From Oliver Wyman’s perspective, Akl explained that Ramadan e-commerce in Saudi Arabia this year will be driven by sophisticated AI personalization, ensuring shoppers receive highly relevant offers and recommendations.

“Expect a significant leap in logistics efficiency, with same-day or even instant delivery becoming more prevalent. Live shopping and social commerce will be integral, creating interactive and engaging experiences,” he said. “Furthermore, embedded finance solutions will streamline transactions, fostering frictionless purchasing.”

Akl went on to highlight that this evolution directly supports Saudi Vision 2030’s digital-transformation goals, building a robust, tech-enabled retail landscape that prioritizes convenience and expands consumer choice, directly contributing to the Kingdom’s economic diversification.

ADL’s Tharmaratnam noted that in 2025 Saudi Arabia’s e-commerce sector will be worth $20 billion, and the way consumers interact with digital platforms continues to evolve at an exponential pace.

“Ramadan commerce will shift from being reactive to predictive and personalized, driven by AI-powered shopping assistants, voice commerce, and health-integrated marketplaces. Consumers won’t just be browsing for products — they’ll be receiving real-time, AI-curated recommendations based on their dietary preferences, health conditions, and fasting habits,” he said.

Vision 2030 is pushing for a cashless economy, targeting 70 percent digital payments by 2025, as well as the expansion of smart logistics networks and the integration of digital health tools into everyday life. This means Ramadan e-commerce will no longer be just about selling — it will be about enabling better, healthier choices.

The partner explained that virtual dietitians, AI-powered hydration monitoring, and smart pharmacy solutions will be embedded directly into e-commerce experiences.

“A preview of this is already happening with SehhaTech, an AI-driven health-commerce platform in Saudi Arabia. SehhaTech integrates digital pharmacy services, health coaching, and e-commerce, allowing users to buy fasting-friendly supplements, receive medication adherence reminders, and even book telehealth consultations,” Tharmaratnam said.

“During Ramadan, these services saw a 150-percent increase in engagement, proving that consumers aren’t just looking for products — they’re looking for intelligent, personalized health solutions integrated with their shopping experiences,” he added.

Khan believes that as Saudi Arabia pushes toward Vision 2030 and a fully digital economy, the Ramadan rush will only become more sophisticated.

“AI-driven personalization, seamless fintech solutions, and hyper-efficient logistics will redefine the shopping experience. Businesses that understand this intersection of culture and technology will be the ones that thrive,” he said.


Saudi Arabia, Indonesia sign key agreements to boost trade and mining cooperation 

Saudi Arabia, Indonesia sign key agreements to boost trade and mining cooperation 
Updated 24 sec ago
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Saudi Arabia, Indonesia sign key agreements to boost trade and mining cooperation 

Saudi Arabia, Indonesia sign key agreements to boost trade and mining cooperation 

RIYADH: Saudi Arabia and Indonesia have signed a series of memoranda of understanding aimed at enhancing bilateral trade and expanding cooperation in the mining sector. 

As part of an official visit to Jakarta, Saudi Arabia’s Minister of Industry and Mineral Resources, Bandar Alkhorayef, signed an MoU with Indonesia’s Minister of Energy and Mineral Resources, Bahlil Lahadalia, to promote strategic collaboration and the exchange of expertise in mining and mineral resources. 

According to a joint press statement, the agreement will foster cooperation in areas including mineral exploration, geological surveying, sustainable mining practices, mineral production and processing, and the development of modern technologies for the mining and metallurgical industries. 

The deal was signed during Alkhorayef’s official trip to Indonesia, which also saw discussions on deepening industrial ties and enhancing knowledge transfer between the two nations. 

In a parallel move, the Saudi Export-Import Bank signed an MoU with Indonesia Eximbank to establish a framework for strengthening trade relations and promoting joint investment initiatives, the Saudi Press Agency reported. 

“This MoU marks a significant step toward improving export and import efficiency and facilitating bilateral trade. It also reflects our commitment to enhancing partnerships and commercial exchange between the two countries,” said Saad Al-Khalb, CEO of Saudi EXIM, as quoted by SPA. 

He added: “The agreement will serve as a catalyst for trade development and joint investment projects across various sectors. We are committed to encouraging Saudi exporters to seize promising investment opportunities, and are fully dedicated to enabling the export of Saudi non-oil products to the Indonesian market.” 

The agreement includes provisions for exchanging best practices related to export credit policies and developing new export products, while also encouraging collaboration between Saudi and Indonesian companies. 

Sukatmo Padmosukarso, acting executive director of Indonesia Eximbank, described the agreement as “more than a ceremonial step,” adding: “It marks the beginning of real, actionable cooperation. We hope to soon realize joint projects in renewable energy, co-financing, and export ventures, supported by dedicated teams from both sides.” 

During the visit, Saudi EXIM officials also held meetings with Indonesian financial institutions, export credit agencies, and trade organizations to explore opportunities for expanding trade, strengthening economic ties, and supporting local exporters in scaling their international operations. 

Trade between Saudi Arabia and Indonesia remains robust. In January alone, Saudi Arabia exported non-oil goods to Indonesia worth SR202.7 million ($54 million), underlining the growing importance of economic collaboration between the two countries. 


Mortgage securitization can offer Saudi banks funding boost: Fitch  

Mortgage securitization can offer Saudi banks funding boost: Fitch  
Updated 50 min 59 sec ago
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Mortgage securitization can offer Saudi banks funding boost: Fitch  

Mortgage securitization can offer Saudi banks funding boost: Fitch  

RIYADH: Saudi banks could unlock additional funding and expand the Kingdom’s debt market by converting home loans into investment products, according to a recent report by Fitch Ratings. 

The rising securitization of residential mortgage loans would represent a major shift in financing strategies, with Saudi banks’ combined mortgage portfolio now totaling around SR0.7 trillion ($186.7 billion) — approximately 23 percent of gross loans.  

Securitization involves pooling loans — such as mortgages or unpaid debts — and converting them into tradable securities that investors can purchase. This process enables banks to raise capital, reduce risk exposure, and support the development of deeper capital markets.  

“Saudi Arabian banks’ liquidity profiles and capital ratios may benefit if potential bad debt securitisations go ahead, but probably not enough to trigger Viability Rating upgrades,” Fitch Ratings said.  

“Securitisations, which some banks are reportedly considering, could also help to develop the Kingdom’s debt capital markets,” it added. 

Some financial institutions have already begun to take steps in this direction, including the issuance of mortgage-backed securities by the Saudi Real Estate Refinance Co. However, Fitch noted that “the use of mortgage securitizations is still low,” with SRC’s loan book amounting to only SR29 billion. 

The report noted that impaired loans in the banking sector have declined, reaching SR41 billion, or 1.4 percent of gross loans, by the end of 2024 — down from SR49 billion in 2022 — driven by write-offs and a healthier operating environment. Newly impaired loans also fell to SR10 billion in 2024, from SR16 billion in 2022. 

Should banks proceed with securitizing impaired loans, the agency added that the resulting bonds would likely be issued at the loans’ net balance sheet value, which stood at SR17 billion at the end of 2024.   

However, Fitch cautioned that “the uplift to core capital ratios from impaired loans securitizations would be limited,” as these loans represent just 0.5 percent of risk-weighted assets. 

While securitization is unlikely to significantly narrow the Kingdom’s SR0.3 trillion deposit gap or alter Fitch’s 12–14 percent credit growth forecast for 2025, it could offer banks an alternative source of funding. 

This is especially relevant as lending continues to outpace deposit growth, and Saudi banks play a pivotal role in financing the Kingdom’s giga-projects. 

Ultimately, the shift toward greater securitization — whether of impaired loans or mortgages — could prove instrumental in diversifying bank funding and strengthening Saudi Arabia’s capital markets. 

The push also aligns with the Kingdom’s Vision 2030 goals to transform the financial sector into a key engine of economic growth. Developing deep, liquid capital markets through instruments like mortgage-backed securities supports the broader strategy to diversify funding sources beyond traditional banking and position Riyadh as a regional financial hub. 


China says it will ignore US ‘tariff numbers game’

China says it will ignore US ‘tariff numbers game’
Updated 17 April 2025
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China says it will ignore US ‘tariff numbers game’

China says it will ignore US ‘tariff numbers game’

BEIJING: China will pay no attention if the US continues to play the “tariff numbers game,” China’s foreign ministry said on Thursday, after the White House outline how China faces tariffs of up to 245 percent due to its retaliatory actions.

In a fact sheet released on Tuesday, the White House said China’s total duties include the latest reciprocal tariff of 125 percent, a 20 percent tariff to address the fentanyl crisis, and tariffs of between 7.5 percent and 100 percent on specific goods to address unfair trade practices.

US President Donald Trump announced additional tariffs on all countries two weeks ago, before suddenly rolling back higher “reciprocal tariffs” for dozens of countries while keeping punishing duties on China.

Beijing raised its own levies on US goods in response and has not sought talks, which it says can only be conducted on the basis of mutual respect and equality. Meanwhile, many other nations have begun looking at bilateral deals with Washington.

Last week, China also filed a new complaint with the World Trade Organization expressing “grave concern” over US tariffs, accusing Washington of violating the global trade body's rules.

China this week unexpectedly appointed a new trade negotiator who would be key in any talks to resolve the escalating tariff war, replacing trade tsar Wang Shouwen with Li Chenggang, its envoy to the WTO.

Washington said Trump was open to making a trade deal with China but Beijing should make the first move, insisting that China needed “our money.”


Trump hails ‘big progress’ in Japan tariff talks

Trump hails ‘big progress’ in Japan tariff talks
Updated 17 April 2025
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Trump hails ‘big progress’ in Japan tariff talks

Trump hails ‘big progress’ in Japan tariff talks

WASHINGTON: President Donald Trump touted “big progress” in tariff talks with Japan on Wednesday, in one of the first rounds of face-to-face negotiations since his barrage of duties on global imports roiled markets and stoked recession fears.

Japan had not expected the president to get involved in Wednesday’s talks, viewing them as a preliminary, fact-finding mission, a sign that Trump wants to keep tight control over negotiations with dozens of countries expected over coming days and weeks.

Tokyo had also been hoping to limit the scope of the talks to trade and investment matters. But announcing his involvement early Wednesday, Trump said thorny issues including the amount Japan pays towards hosting US troops were among discussion topics.

“A Great Honor to have just met with the Japanese Delegation on Trade. Big Progress!” Trump said in a social media message that contained no details of the discussions.

Opposite Trump was Ryosei Akazawa, a close confidant of Japanese Prime Minister Shigeru Ishiba who serves in the relatively junior cabinet position of economic revitalisation minister.

Speaking to reporters after the talks, Akazawa gave few details but said the parties had agreed to hold a second meeting later this month and that Trump had said getting a deal with Japan was a “top priority.”

Exchange rates, which the Trump administration has said Japan and others manipulate to get a trade advantage, were not part of the talks, Akazawa added.

The dollar strengthened against the yen after his remarks on forex, up around 0.5 percent on the day. Tokyo denies it manipulates its yen currency lower to get make its exports cheaper.

Akazawa held a 50-minute meeting with Trump at the White House before another session with his Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick and Trade Representative Jamieson Greer that stretched to almost an hour and a half, according to Japanese readouts of the talks.

Japan’s prime minister, who has previously said he won’t rush to reach a deal and does not plan to make big concessions, sounded a more cautious tone speaking to reporters later in Tokyo.

“Of course, the negotiations will not be easy going forward, but President Trump has stated that he wants to give top priority to the talks with Japan,” Ishiba said.

Italian Prime Minister Giorgia Meloni heads to the White House on Thursday to discuss tariffs imposed on the EU with Trump, while Bessent has invited South Korea’s finance minister to Washington for talks next week.

FIRST MOVER ADVANTAGE

Trump has long complained about the US trade deficit with Japan and other countries, saying US businesses have been “ripped off” by trade practices and intentional efforts by other countries to maintain weak currencies.

Japan has been hit with 24 percent levies on its exports to the US although these rates have, like most of Trump’s tariffs, been paused for 90 days. But a 10 percent universal rate remains in place as does a 25 percent duty for cars, a mainstay of Japan’s export-reliant economy.

Bessent has said there is a “first mover advantage” given Washington has said more than 75 countries have requested talks since Trump announced sweeping duties on dozens of countries — both friend and foe — earlier this month.

Akazawa declined to comment on the matter, adding only that he strongly requested a revocation of the tariffs and that he believed Washington wanted to secure a deal in the 90-day window.

Washington is hoping to strike deals with countries that would cover tariffs, non-tariff barriers and exchange rates, Bessent has said, though Tokyo had lobbied to keep the latter separate.

Trump earlier this month lambasted Japan for what he said was a 700 percent tariff on rice, a figure Tokyo disputes. Levies on autos are particularly painful for Japan as they make up nearly a third of shipments to the US, its biggest export market.

Japan hopes that pledges to expand investment in the US will help to convince the US that the allies can achieve a “win-win” situation without tariffs.

Possible Japanese investment in a multi-billion-dollar gas project in Alaska could also feature in tariff negotiations, Bessent said before Wednesday’s talks.

“It sounds like the Trump administration really does want a quick deal, which suggests it will be a less substantive deal,” said Tobias Harris of Japan Foresight, a political risk advisory.

“My baseline is that if the US really starts making demands on agriculture and maybe also on some of the auto regulations, it becomes a lot more contentious and hard to do quickly.”


Oil Updates — Crude set for weekly rise on new Iran sanctions, OPEC cuts

Oil Updates — Crude set for weekly rise on new Iran sanctions, OPEC cuts
Updated 17 April 2025
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Oil Updates — Crude set for weekly rise on new Iran sanctions, OPEC cuts

Oil Updates — Crude set for weekly rise on new Iran sanctions, OPEC cuts

LONDON: Oil prices extended gains on Thursday on the prospect of tighter supply after Washington imposed further sanctions to curb Iranian oil trade and as some OPEC producers pledged more output cuts to compensate for pumping above agreed quotas.

Brent crude futures rose 56 cents, or 0.85 percent, to $66.41 a barrel by 9:25 a.m. Saudi time and US West Texas Intermediate crude was at $63.12 a barrel, up 65 cents, or 1.04 percent. 

Both benchmarks settled 2 percent higher on Wednesday at their highest levels since April 3 and are on track for their first weekly rise in three. 

Thursday is the last settlement day of the week ahead of the Good Friday and Easter holidays.

“I think the rally has a couple of factors behind it — short-covering, the weaker USD, which makes crude oil cheaper to buy, and the US pressure on Iran,” IG market analyst Tony Sycamore said.

WTI could rise back to $65-$67 a barrel but may struggle with further gains, he said.

“If we assume that US growth is going to be flat at best for the next two quarters and Chinese GDP (gross domestic product) is set to slow to somewhere between the 3 percent-4 percent band, it’s not good for crude oil,” Sycamore said.

President Donald Trump’s administration issued new sanctions targeting Iran’s oil exports on Wednesday, including against a China-based “teapot” oil refinery, ramping up pressure on Tehran amid talks on the country’s escalating nuclear program.

Adding to supply concerns, the Organization of the Petroleum Exporting Countries said on Wednesday it had received updated plans for Iraq, Kazakhstan and other countries to make further output cuts to compensate for pumping above quotas.

“(These factors) certainly could have affected sentiment – would argue that Iranian production (is) not significant and that OPEC quotas more often breached than observed, but both factors fed into the more bullish tone,” said Michael McCarthy, CEO of online investment platform Moomoo.

Big draws on US gasoline and distillates stocks and a smaller-than-expected gain in weekly crude inventories also bolstered markets, he said.

“Much of the recent selling pressure in global crude markets related to fears of an imminent flood of US oil, but the drop in refining suggests that bottlenecks to supply may be emerging,” McCarthy said.

Still, OPEC, the International Energy Agency and several banks, including Goldman Sachs and JP Morgan, cut forecasts on oil prices and demand growth this week as US tariffs and retaliation from other countries threw global trade into disarray.

The World Trade Organization said it expected trade in goods to fall by 0.2 percent this year, down from its expectation in October of a 3.0 percent expansion.