Saudi Arabia E-commerce Logistics - Market Share Analysis, Industry Trends & Statistics, Growth Forecasts (2024 - 2029)
The Saudi Arabia E-commerce Logistics Market size is estimated at USD 2.02 billion in 2024, and is expected to reach USD 3.32 billion by 2029, growing at a CAGR of 10.94% during the forecast period (2024-2029).
Key Highlights
Electronic commerce is expected to flourish in Saudi Arabia, with total revenues reaching SAR 49 billion (USD 13.07 billion) by 2025, according to the Deputy Minister of Commerce and General Supervisor of the Saudi Center for Economic Business, which is creating a significant demand for efficient logistics solutions.
The increasing internet penetration in the region is driving the market, which is widening the consumer base. According to industry experts, data suggests that the richer Middle Eastern nations have high internet adoption rates. Bahrain, Kuwait, Qatar, Saudi Arabia, and the UAE all reported over 99% of their online population in January 2024.
Government initiatives to promote digital transformation are further propelling the market. For instance, The Saudi government has been actively supporting the growth of e-commerce in the country through initiatives such as the National Transformation Program (NTP) and Vision 2030. The younger demographic's inclination toward online shopping is also influencing market dynamics. The rise of online-only sales events, the efficiency of inventory management systems, and a growing emphasis on customer service quality also contribute to the market.
Secure and various payment methods are offering consumers flexibility and trust, enhancing market growth. Moreover, the Saudi Arabian Government is taking steps to strengthen Saudis’ confidence in e-commerce and to spur the use of e-commerce platforms by strengthening the country’s e-commerce regulatory environment to protect consumers and logistics companies. Since online retailers depend more on 3PL service providers, it is expected to positively influence the Saudi e-commerce logistics sector.
Saudi Arabia E-commerce Logistics Market Trends
Growth in e-Commerce Sales is Driving the Growth of the Market
The growth of homegrown e-commerce websites in Saudi Arabia has been remarkable in recent years due to the support provided by the government. There are also many educational initiatives supporting e-commerce growth in Saudi Arabia.
In 2023, PepsiCo partnered with MCIT and AstroLabs to run the PepsiCo ScaleUp e-commerce program that accelerated 100 Saudi businesses on their online journey. The e-commerce industry is a critical factor that the country's Vision 2030 plan aims to leverage to promote the growth of small and medium-sized enterprises.
Hence, Saudi Arabia's e-commerce sector is observing steady growth, as the number of registered businesses has reached 36,330 in the third quarter of 2023. This represents an annual increase of 12 percent. According to the latest data released by the Minister of Commerce, the city of Riyadh has the highest number of registrations with 14,497, followed by Makkah with 9,275 and the Eastern Province with 5,866. The Madinah and Qasim regions have 1,792 and 1,222 e-commerce registrations, respectively.
In June 2023, Seeking to explore the immense growth opportunities in Saudi Arabia, Dubai-based e-commerce facilitator YallaHub launched a full-throttle expansion plan to enter the KSA. YallaHub aims to foster Saudi e-commerce growth by offering a comprehensive solution to aid SMEs significantly. The company offers registration and licensing services, export and import assistance, storage and fulfillment, super-fast delivery, marketing, e-commerce setup, and payment gateway rent.
Increasing Demand for Consumer Electronics is Driving the Market
The demand for electronics in Saudi Arabia’s e-commerce market is increasing with a rising middle class, increasing internet penetration, and higher disposable incomes, more Saudis have the purchasing power to buy electronic goods. Moreover, the younger, more tech-savvy population is driving the demand for electronic products, including smartphones, laptops, and smart home devices.
As per the industry experts' data, smartphone penetration in Saudi Arabia was forecast to remain at a similar level in 2029 as compared to 2024, at 97 percent. However, the number of mobile internet users in Saudi Arabia was forecast to continuously increase between 2024 and 2029 by a total of 2.8 million users.
Moreover, in the electronic products segment, the E-commerce companies have implemented various consumer-friendly features to attract more customers, including diverse product ranges, customer ratings and reviews, discounted deals, affordable delivery options, free exchanges and returns, competitive pricing, and 24/7 availability.
The growth of the consumer electronics e-commerce market in Saudi Arabia is expected to be boosted by the increasing demand for smartphones. This demand has made online shopping more accessible, convenient, and attractive, leading to more consumers using their smartphones to purchase a wide range of electronic products.
In October 2023, Honor, one of the leading global providers of smart devices, reported strong demand for its high-end smartphones in the region. This trend indicates that the increasing demand for smartphones is driving the growth of the consumer electronics e-commerce market.
Saudi Arabia E-commerce Logistics Industry Overview
The e-commerce logistics market in Saudi Arabia is highly competitive, with both local and international players vying for market share. Various notable players operating in the market include Amazon, Noon (Noon E-Commerce), Aliexpress, Namshi, Jazp, and Carrefour. Currently, these are the main businesses dominating the e-commerce market in Saudi Arabia; however, as the e-commerce industry evolves, new companies and startups are expanding their market presence by entering new areas and gaining new contracts in Saudi Arabia’s e-commerce market.
In addition, e-commerce players are expanding their businesses through mergers, acquisitions, strategic partnerships, and new service launches to meet customer needs in Saudi Arabia. For instance, in 2023, E-commerce company Noon completed the acquisition of online fashion retailer Namshi. So, the acquisition of Namshi will expand Noon’s digital offering of products and services to include more fashion and lifestyle brands for the region's consumers. Saudi Post, SMSA Express, Aramex, and SAB Express are among others.
Additional Benefits:
The market estimate (ME) sheet in Excel format
3 months of analyst support
Key Highlights
Electronic commerce is expected to flourish in Saudi Arabia, with total revenues reaching SAR 49 billion (USD 13.07 billion) by 2025, according to the Deputy Minister of Commerce and General Supervisor of the Saudi Center for Economic Business, which is creating a significant demand for efficient logistics solutions.
The increasing internet penetration in the region is driving the market, which is widening the consumer base. According to industry experts, data suggests that the richer Middle Eastern nations have high internet adoption rates. Bahrain, Kuwait, Qatar, Saudi Arabia, and the UAE all reported over 99% of their online population in January 2024.
Government initiatives to promote digital transformation are further propelling the market. For instance, The Saudi government has been actively supporting the growth of e-commerce in the country through initiatives such as the National Transformation Program (NTP) and Vision 2030. The younger demographic's inclination toward online shopping is also influencing market dynamics. The rise of online-only sales events, the efficiency of inventory management systems, and a growing emphasis on customer service quality also contribute to the market.
Secure and various payment methods are offering consumers flexibility and trust, enhancing market growth. Moreover, the Saudi Arabian Government is taking steps to strengthen Saudis’ confidence in e-commerce and to spur the use of e-commerce platforms by strengthening the country’s e-commerce regulatory environment to protect consumers and logistics companies. Since online retailers depend more on 3PL service providers, it is expected to positively influence the Saudi e-commerce logistics sector.
Saudi Arabia E-commerce Logistics Market Trends
Growth in e-Commerce Sales is Driving the Growth of the Market
The growth of homegrown e-commerce websites in Saudi Arabia has been remarkable in recent years due to the support provided by the government. There are also many educational initiatives supporting e-commerce growth in Saudi Arabia.
In 2023, PepsiCo partnered with MCIT and AstroLabs to run the PepsiCo ScaleUp e-commerce program that accelerated 100 Saudi businesses on their online journey. The e-commerce industry is a critical factor that the country's Vision 2030 plan aims to leverage to promote the growth of small and medium-sized enterprises.
Hence, Saudi Arabia's e-commerce sector is observing steady growth, as the number of registered businesses has reached 36,330 in the third quarter of 2023. This represents an annual increase of 12 percent. According to the latest data released by the Minister of Commerce, the city of Riyadh has the highest number of registrations with 14,497, followed by Makkah with 9,275 and the Eastern Province with 5,866. The Madinah and Qasim regions have 1,792 and 1,222 e-commerce registrations, respectively.
In June 2023, Seeking to explore the immense growth opportunities in Saudi Arabia, Dubai-based e-commerce facilitator YallaHub launched a full-throttle expansion plan to enter the KSA. YallaHub aims to foster Saudi e-commerce growth by offering a comprehensive solution to aid SMEs significantly. The company offers registration and licensing services, export and import assistance, storage and fulfillment, super-fast delivery, marketing, e-commerce setup, and payment gateway rent.
Increasing Demand for Consumer Electronics is Driving the Market
The demand for electronics in Saudi Arabia’s e-commerce market is increasing with a rising middle class, increasing internet penetration, and higher disposable incomes, more Saudis have the purchasing power to buy electronic goods. Moreover, the younger, more tech-savvy population is driving the demand for electronic products, including smartphones, laptops, and smart home devices.
As per the industry experts' data, smartphone penetration in Saudi Arabia was forecast to remain at a similar level in 2029 as compared to 2024, at 97 percent. However, the number of mobile internet users in Saudi Arabia was forecast to continuously increase between 2024 and 2029 by a total of 2.8 million users.
Moreover, in the electronic products segment, the E-commerce companies have implemented various consumer-friendly features to attract more customers, including diverse product ranges, customer ratings and reviews, discounted deals, affordable delivery options, free exchanges and returns, competitive pricing, and 24/7 availability.
The growth of the consumer electronics e-commerce market in Saudi Arabia is expected to be boosted by the increasing demand for smartphones. This demand has made online shopping more accessible, convenient, and attractive, leading to more consumers using their smartphones to purchase a wide range of electronic products.
In October 2023, Honor, one of the leading global providers of smart devices, reported strong demand for its high-end smartphones in the region. This trend indicates that the increasing demand for smartphones is driving the growth of the consumer electronics e-commerce market.
Saudi Arabia E-commerce Logistics Industry Overview
The e-commerce logistics market in Saudi Arabia is highly competitive, with both local and international players vying for market share. Various notable players operating in the market include Amazon, Noon (Noon E-Commerce), Aliexpress, Namshi, Jazp, and Carrefour. Currently, these are the main businesses dominating the e-commerce market in Saudi Arabia; however, as the e-commerce industry evolves, new companies and startups are expanding their market presence by entering new areas and gaining new contracts in Saudi Arabia’s e-commerce market.
In addition, e-commerce players are expanding their businesses through mergers, acquisitions, strategic partnerships, and new service launches to meet customer needs in Saudi Arabia. For instance, in 2023, E-commerce company Noon completed the acquisition of online fashion retailer Namshi. So, the acquisition of Namshi will expand Noon’s digital offering of products and services to include more fashion and lifestyle brands for the region's consumers. Saudi Post, SMSA Express, Aramex, and SAB Express are among others.
Additional Benefits:
The market estimate (ME) sheet in Excel format
3 months of analyst support
1 INTRODUCTION
1.1 Study Assumptions
1.2 Scope of the Study
2 RESEARCH METHODOLOGY
3 EXECUTIVE SUMMARY
4 MARKET INSIGHTS
4.1 Current Market Scenario
4.2 Government Regulations and Initiatives
4.3 Technological Trends and Automation Insights
4.4 Impact of the COVID-19 Pandemic on the Market
5 MARKET DYNAMICS
5.1 Market Drivers
5.1.1 Growing Internet and Smart Phone Penetration
5.1.2 Urbanization and Lifestyle Changes
5.1.3 Government Initiatives
5.2 Market Restraints
5.2.1 Poor Infrastructure and Last-mile Delivery
5.3 Market Opportunities
5.3.1 Investments in the Logistics Infrastructure
5.3.2 Cross-border e-commerce and Reverse Logistics
5.3.3 Collaborations with E-commerce Companies
5.4 Industry Attractiveness - Porter's Five Forces Analysis
5.4.1 Bargaining Power of Suppliers
5.4.2 Bargaining Power of Buyers/consumers
5.4.3 Threat of New Entrants
5.4.4 Threat of Substitutes
5.4.5 intensity of Competitive Rivalry
6 MARKET SEGMENTATION
6.1 By Service
6.1.1 Transportation
6.1.2 Warehousing Inventory Management
6.1.3 Value-added Services (Labelling, Packaging)
6.2 By Business
6.2.1 B2B
6.2.2 B2C
6.3 By Destination
6.3.1 Domestic
6.3.2 International
6.4 By Product
6.4.1 Fashion and Apparel
6.4.2 Consumer Electronics
6.4.3 Home Appliances
6.4.4 Furnniture
6.4.5 Beauty and Personal Care Products
6.4.6 Other Products (Toys. Food Products)
7 COMPETITIVE LANDSCAPE
7.1 Market Concentration Overview
7.2 Company Profiles
7.2.1 ESNAD Express
7.2.2 Saudi Post
7.2.3 SMSA Express
7.2.4 Alma Express
7.2.5 Ali Express
7.2.6 Aramex
7.2.7 DHL
7.2.8 UPS
7.2.9 Zajil Express
7.2.10 SAB Express*
7.3 Other Companies
8 FUTURE OUTLOOK OF THE MARKET
9 APPENDIX
1.1 Study Assumptions
1.2 Scope of the Study
2 RESEARCH METHODOLOGY
3 EXECUTIVE SUMMARY
4 MARKET INSIGHTS
4.1 Current Market Scenario
4.2 Government Regulations and Initiatives
4.3 Technological Trends and Automation Insights
4.4 Impact of the COVID-19 Pandemic on the Market
5 MARKET DYNAMICS
5.1 Market Drivers
5.1.1 Growing Internet and Smart Phone Penetration
5.1.2 Urbanization and Lifestyle Changes
5.1.3 Government Initiatives
5.2 Market Restraints
5.2.1 Poor Infrastructure and Last-mile Delivery
5.3 Market Opportunities
5.3.1 Investments in the Logistics Infrastructure
5.3.2 Cross-border e-commerce and Reverse Logistics
5.3.3 Collaborations with E-commerce Companies
5.4 Industry Attractiveness - Porter's Five Forces Analysis
5.4.1 Bargaining Power of Suppliers
5.4.2 Bargaining Power of Buyers/consumers
5.4.3 Threat of New Entrants
5.4.4 Threat of Substitutes
5.4.5 intensity of Competitive Rivalry
6 MARKET SEGMENTATION
6.1 By Service
6.1.1 Transportation
6.1.2 Warehousing Inventory Management
6.1.3 Value-added Services (Labelling, Packaging)
6.2 By Business
6.2.1 B2B
6.2.2 B2C
6.3 By Destination
6.3.1 Domestic
6.3.2 International
6.4 By Product
6.4.1 Fashion and Apparel
6.4.2 Consumer Electronics
6.4.3 Home Appliances
6.4.4 Furnniture
6.4.5 Beauty and Personal Care Products
6.4.6 Other Products (Toys. Food Products)
7 COMPETITIVE LANDSCAPE
7.1 Market Concentration Overview
7.2 Company Profiles
7.2.1 ESNAD Express
7.2.2 Saudi Post
7.2.3 SMSA Express
7.2.4 Alma Express
7.2.5 Ali Express
7.2.6 Aramex
7.2.7 DHL
7.2.8 UPS
7.2.9 Zajil Express
7.2.10 SAB Express*
7.3 Other Companies
8 FUTURE OUTLOOK OF THE MARKET
9 APPENDIX
