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The Saudi ICT Market and E‐Commerce Potential
Agenda
Saudi Ecommerce and Potential
• Saudis on Social networks
• Saudi Retail Market Size
• Ecommerce Market Size and Trends
• Market Players
• Challenges and opportunities
The Saudi ICT Market
• Saudi Vs UK in numbers
• Facts on Saudi
• Internet and mobile penetration
• Smart Phone Penetration
• ICT Market Size
The Saudi ICT Market
Saudi Arabia Vs UK in Numbers
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Area 2.15 trillion m² 243.6 billion m²
Population 28.8 Million 64.1 Million
GDP $748 Billion $2.68 Trillion
Median Age 26 years old 40.3 years old
Internet users 63.7% 91.6%
Mobile Penetration 179.5 % 123.5 %
• Among the twenty most important industrial and emerging countries (G-20).
• Main member of OPEC, having largest conventional oil reserves worldwide, (260 billion barrels) 18% of the world's petroleum reserves.
• No Sales Tax, No Income Tax.
• 150 k students studying abroad on gov. scholarships.
• One of the lowest countries globally in Debt and highest National Reserves and Forex Reseves.
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More on Saudi Arabia
Internet and Mobile Penetration in Saudi
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Source : ITU-D : ICT Data and Statistics (IDS) 2014
from total subscribers in Saudi48% are Mobile Data Subscribers
High Smart Phone Penetration (2013)
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Source : Google’s Our Mobile Planet
~$ 30 Billion ICT Spending annually
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ICT Investments in Saudi Arabia by Industry Vertical,
2014 (Total = USD 4.75 Billion)
ICT Spending in Saudi Arabia by Technology, 2014
(Total = USD 29.86 Billion)
Source: Saudi Communications and Information Technology Commission (CITC) ITC Report 2015
~ $14 Billion IT Spending
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Growth 2014-18 (CAGR)
Source:
The Saudi E‐Commerce & Potential
Saudis on Social Networks
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Saudi has the highest
penetration of Twitter in
the world.
47% of the tweets in the Arab world are produced in or by
Saudis, despite its small population
As per Google : Saudi Arabia is "the biggest user of YouTube per capita in the world"
Saudis on Social Networks
Speed of adaptation of Social network is Remarkable
Oversharing ! Local Social “Celebrities” ! Speed of Word of Mouth !Powered by a Social culture
Saudi Retail Market Size
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• Saudi Retail Market is $120b*• 11% annual growth **
(GCC growth 6% avg)• 54% of GCC Retail Market **• “Solid Growth & Untapped
Potential” **• Consumer Goods 32% of retail**
Sources: * Alpen Capital Report 2013, ** AT Kearny’s Global Retailers 2013
Ecommerce Market Size in Saudi
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Sources: *BCG G20 Report 2012, ** RetailMeNot Online Retail Study 2014
• 2011: $3b, 2.9% of Retail*
• 2016: $15b, 8% of Retail*
B2C Ecommerce in Saudi
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• 10 m Users growing to 17 m by 2020
• 2015 : $604 average revenue per user (ARPU)
Ecommerce Players in Saudi 1
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www.Souq.com www.MarkaVIP.comwww.Namshi.com
www.vanillaeshop.com www.iPhady.comwww.mumzworld.com
Ecommerce Players in Saudi 2
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Ecommerce Players in Saudi 3
Challenges & Opportunities : Payment
• ~ 80% of Ecommerce in Saudi is Cash on Delivery.
• Debt cards can not be used online. Paypal not Popular.
• Bank transfers is common.
• Local payment providers e.g. “OneCard” cant do Ecommerce.
• 80% of Saudis have bank accounts.
• Gov. Launched recently SADAD OLP, a Platform connecting all Saudi
banks with Ecommerce Sites’ check out pages.
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Challenges & Opportunities : Delivery
• Big logistics companies are Expensive and slow. And do
not offer Cash on Delevery.
• Problems with Labor.
• Non unified Addresses.
• Growing percentage of Returns.
• Demand concentrated in few big cities. Pickup is popular.
• Social use freelancers, and New “Uber” like solutions
emerging.
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Challenges & Opportunities : Other
Legal and Taxation :
• Not easy for non Saudis.
• Tax on non Saudis.
Culture :
• No research available on Taste, preferences or behaviors.
• Need to experiment with taste & have a Local team.
• Need to experiment with Marketing, especially Social.
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Opportunities
• Delivery and pickup innovation
• Managing Returns
• Partnerships with Local Players
• Start online and go offline
• Platforms
• Social and mobile commerce and comparison engines
• Big investments
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Saudi Ecommerce Opportunities
Ecommerce in Saudi is still a Blue Ocean with lots of opportunities
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