Saudi e-commerce thrives as sales using Mada cards reach $3.76b

FE Team | Published: March 30, 2024 22:25:04

RIYADH, Mar 30 (Arab News): Saudi e-commerce sales using Mada cards reached SR14.11 billion ($3.76 billion) in February - an annual increase of 25 per cent, the Kingdom's central bank has revealed.
This figure includes transactions through online shopping, in-app purchases and e-wallets, and excludes transactions by Visa, MasterCard and other credit cards.
Mada serves as Saudi Arabia's national card payment scheme, aimed at advancing digital payments within the country, particularly in supporting e-commerce, point of sales, and ATM growth. Linked directly to the cardholder's bank account, it enables real-time, secure, and reliable transactions for a variety of purposes, including purchasing, cash withdrawals, and online payments.
The number of e-commerce transactions also increased by 44 per cent on a year-on-year basis to reach more than 84 million in February.
The shift in consumer behavior post-COVID-19, supported by regulatory reforms, robust internet infrastructure, and the continuous advancement of sophisticated e-commerce businesses, has been key drivers of the shift away from cash. In the past three years, online sales in Saudi Arabia surged by almost 60 per cent across various categories, with significant growth seen in media products, apparel, and footwear segments, according to the American International Trade Administration in a January commercial guide.
Additionally, the average spend per e-commerce user in the Kingdom rose by over 50 per cent. The organisation anticipates continuous growth, projecting Saudi Arabia to reach 33.6 million e-commerce users by 2024, marking a 42 per cent increase from 2019.
Factors contributing to this growth include the country's 97 per cent smartphone penetration rate, high mobile broadband subscriptions, and ranking as the 10th country globally for internet speed.
Moreover, 72 per cent of Saudis over the age of 15 possess bank accounts highlighting the readiness of the population for digital transactions and online commerce.
The organissation emphasized the prevalence of local platforms and the introduction of new entrants like Amazon Prime, which debuted in January 2021.
Other contributing factors include the government's initiatives to enhance the sector's regulatory framework, aimed at bolstering confidence among Saudis and encouraging the use of its platforms, with a focus on protecting consumers and businesses alike.
However, the organisation also highlighted challenges for this sector, particularly the need to strengthen cyber-security measures to counter malicious emailing.