E-commerce share in Saudi Arabia’s retail sector to hit 46% by 2030: Visa official 

Ali Bailoun, regional general manager of Visa, during an interview with Arab News in Riyadh on Tuesday. AN photo by Loai El-Kellawy
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Updated 05 February 2025
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E-commerce share in Saudi Arabia’s retail sector to hit 46% by 2030: Visa official 

RIYADH: Saudi Arabia’s consumer retail spending is projected to experience significant growth in the coming years, with e-commerce expected to account for 46 percent of the overall retail sector by 2030, according to a Visa executive.

Speaking to Arab News at the Retail Leaders Circle in Riyadh on Feb. 4, Ali Bailoun, regional general manager of Visa, highlighted that Saudi Arabia currently represents 44 percent of the total retail spending in the Gulf Cooperation Council region.

Bailoun’s remarks reflect Saudi Arabia’s ongoing shift toward a more diversified, digitally-driven economy, where e-commerce plays a pivotal role.

E-commerce in Saudi Arabia

Earlier this month, data from the Ministry of Commerce revealed that Saudi Arabia’s e-commerce sector continues to show strong growth. As of the fourth quarter of 2024, the Kingdom now has 40,953 registered e-commerce businesses, marking a 10 percent year-on-year increase.

“In line with Vision 2030, we see Saudi growing or doubling the payment volume by 2030. Even if you look at e-commerce, we expect e-commerce to grow to 46 percent by 2030. So, we see growth and we see potential. And you can see this on the ground,” said Bailoun. 

He added: “Today, you can go anywhere in Saudi Arabia, and you can use your card and make any payments in any retail shop.” 

Bailoun noted that e-commerce in Saudi Arabia currently accounts for 29 percent of all consumer retail payments in 2024, and is projected to rise to 46 percent by the end of this decade.

He also highlighted that cross-border transactions represent 15 percent of consumer retail payments in Saudi Arabia for 2024.

Supporting these insights, a September 2024 report from Saudi Arabia’s Small and Medium Enterprises Authority indicated that the Kingdom’s retail sector is poised to double between 2020 and 2025, with an annual compound growth rate of 15 percent.

Furthermore, a December report from Statista projected that credit card penetration in Saudi Arabia will reach 46.83 percent, continuing a trend of growth observed over the past 15 years.

Technological advancements

Bailoun suggested that data should be used wisely by retailers to enhance the growth of cross-border business. 

“My recommendation always to retailers is data. You need to find a way to collect and optimize your data and then customize these solutions,” said Bailoun. 

He added: “You need to work with data, not only yourself. You need to look at the market. You need to look at the region and start building up on the data you have to customize the solutions or build up these solutions.” 

The Visa official further said that the implementation of advanced technologies like Artificial Intelligence is also crucial to elevate the growth of both physical and e-commerce retail sectors. 

“Today when you look at social media, sometimes you like something and you read more about it. Then it becomes it pops up in different areas. It is all AI,” he said. 

A recent report by market research firm IMARC echoed similar sentiments, emphasizing the growing role of technology in shaping the e-commerce retail sector.

According to the report, the increasing use of data analytics and AI algorithms to personalize shopping experiences is a key driver of the market. “The expanding use of data to recommend products based on a user’s browsing and purchase history is making it easier for customers to discover items they may be interested in,” the report stated.

IMARC also highlighted that Saudi Arabia’s e-commerce market was valued at $22.9 billion in 2024, with projections indicating it will reach $708.7 billion by 2033, reflecting a compound annual growth rate of 12.8 percent.

Visa’s Saudi operations

He also talked about Visa’s close cooperation with STC Bank, which recently received a non-objection certificate from the Saudi Central Bank to commence its banking operations in the Kingdom. 

“We are a payment technology network. We work and we enable all players in the ecosystem; be it a traditional bank, digital bank, a wallet, a merchant, or maybe a telco provider. We work and we operate and enable the whole ecosystem,” said Bailoun. 

He added: “STC was a wallet. They’ve converted to become a digital bank. We’ve been working with them when they were a wallet, we will continue working with them when they become a bank again. We enable them to do payment credentials, which means they can issue a card under the Visa brand, and they go and do payments anywhere and everywhere in the world.” 

Calling Saudi Arabia one of the strategic markets of Visa, Bailoun also outlined some of the major initiatives taken by the payment card services company in the Kingdom. 

In October 2024, Visa opened its fifth innovation center globally in Riyadh in the King Abdullah Financial District. 

“Today, if you have a problem statement. If you have anything you want to solve or cater for, we sit down together with many partners, we co-create and come up with a solution in that innovation center,” said Bailoun. 

He added: “In addition, we have some best practices and some experiences that we’ve taken from around the world; be it on the gaming, on AI or gen AI. We have something on urbanization. In the innovation center, we have also added something that will cater for the new cities the likes of Neom, the likes of Qiddiyah.” 

Bailoun also detailed Visa’s major partnerships in the Kingdom with retailers including Cenomi Retail and Marriot Bonvoy. 

“With Cenomi, we have signed a deal to work on two parts; the loyalty platform and we have also worked on something called co-brand. So, Cenomi will have a co-brand credit card. The more you spend on their card, the more loyalty you get, and then you can redeem within the group,” said the Visa official. 

He added: “Marriott Bonvoy is a group of hotels. It’s a loyalty platform, one of the big platforms globally. The card is issued in partnership with Visa and Bonvoy. So, the more you spend, the more you will get points to redeem in Bonvoy hotels.” 


Saudi e-commerce sales using Mada cards hit $53bn in 2024

Updated 07 February 2025
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Saudi e-commerce sales using Mada cards hit $53bn in 2024

  • Year-on-year growth of 25.82%, according to Saudi central bank data
  • Spending power, nation’s economic strength are ‘fueling market growth’

RIYADH: E-commerce sales using Mada cards in Saudi Arabia reached SR197.42 billion ($52.64 billion) in 2024, a year-on-year growth of 25.82 percent, according to data from the Kingdom’s central bank.

Figures released by the institution showed that in December, sales totaled SR19.37 billion, representing a 42.06 percent increase compared to the same month in the previous year.

These figures include payments for online shopping, in-app purchases, and e-wallet transactions, but exclude transactions using credit cards such as Visa and MasterCard.

Mada, the Kingdom’s national payment card system, supports both debit and prepaid services within its network. The cards utilize near-field communication technology for contactless payments, enabling secure transactions at both physical retailers and online.

Mohammed Dhedhi, partner in the consumer and retail practice team at Kearney Middle East and Africa, told Arab News: “The growing spending power in Saudi Arabia, driven by factors such as dual-income households and higher overall economic strength, is fueling market growth.”

He added: “Additionally, the proliferation of NFC-capable devices has significantly boosted the penetration of digital payment channels like Mada, further supporting the shift toward a more digital economy.”

In addition to the surge in sales, the number of e-commerce transactions also experienced a significant rise, increasing by 28.86 percent year-on-year to nearly 1.13 billion transactions in 2024.

December saw a 30.47 percent annual increase, reaching 105.73 million transactions.

According to Dhedhi: “Today, local Mada cards account for over 90 percent of cards issued in the country and over 95 percent of the total transactions made. One of the main reasons for Mada’s popularity is because of how convenient it is to use.”

He added that Mada is widely accepted both in-store and online across Saudi Arabia, providing secure transactions as it is operated by Saudi Payments, a subsidiary of the Saudi Central Bank.

The growing adoption of Mada aligns with the government’s push toward a cashless society, promoting the transition from cash to digital payments.

Dhedhi explained that the COVID-19 pandemic significantly accelerated e-commerce penetration in Saudi Arabia, driving faster digital adoption across various sectors.

This growth was further supported by increased investments from both regional and global players looking to expand their operations.

He noted that in 2022, noon.com opened a Customer Fulfillment Center in Riyadh to improve delivery speed and meet the growing demand from consumers.

Saudi Arabia’s growing spending power, supported by factors including dual-income households and a robust economy, continues to drive market expansion.

At the same time, the widespread adoption of NFC-enabled devices has propelled the use of digital payment solutions like Mada.

As a result, the Kingdom is witnessing a rapid shift toward a more digital economy, with seamless and secure transactions becoming an integral part of the evolving e-commerce landscape.

The rise in e-commerce activity aligns with Saudi Arabia’s goal to make digital transactions account for 80 percent of the retail sector by 2030, with 70 percent conducted online by the same year.

According to the International Trade Administration, the Saudi e-commerce market, valued at $5.15 billion in 2023, accounted for 6 percent of the Kingdom’s $92.6 billion retail market.

Dhedhi said: “To improve online shopping experiences, Saudi Arabia’s Ministry of Commerce has introduced reforms focusing on refunds, delivery options, and payment choices.”

He added: “These changes aim to address consumer concerns such as unclear warranties, limited delivery coverage, slow complaint resolutions, and delayed refunds. Retailers are now required to submit performance reports and conduct consumer awareness campaigns.”

According to Dhedhi, Saudi Arabia’s e-commerce market growth will be driven primarily by appliances and electronics, which will account for 23 percent of total growth, with a compound annual growth rate of 8 percent from 2024 to 2028.

The fashion sector is expected to contribute 18 percent, also growing at 8 percent CAGR, while health and beauty will make up 14 percent, expanding at a much faster 16 percent CAGR.

The dominance of electronics and appliances reflects a strong demand for advanced technology and gadgets, particularly among younger, tech-savvy consumers.

In addition, the rising popularity of beauty and home care products aligns with an increasing focus on self-care and wellness across the Kingdom.

Meanwhile, the food and beverage segment is projected to experience the highest growth rate at 25 percent CAGR, although its overall market size remains smaller compared to other leading categories, according to Dhedhi.

“The rise in food and beverage e-commerce reflects a growing demand for convenience. Quick commerce has been growing rapidly, and while it historically took players much longer to achieve profitability, the current focus on dark stores and improved unit economics is accelerating this process,” Dhedhi said.

He also noted that while this shift has accelerated growth in the sector, it has also intensified competition. This dynamic ultimately benefits market players in Saudi Arabia by fostering innovation and enhancing service quality.

According to the International Trade Administration, Saudi Arabia’s digital economy is expanding rapidly, driven by substantial government investments and widespread adoption of emerging technologies.

As of 2023, the Kingdom’s Information and Communications Technology sector was the largest and fastest-growing in the Middle East and North Africa region, valued at $40.94 billion and contributing 4.1 percent of gross domestic product, the report stated.

The Kingdom ranked second among G20 countries on the UN International Telecommunication Union’s ICT Development Index in 2023, highlighting its strong digital infrastructure.

Over the past six years, Saudi Arabia has invested $24.8 billion in this area, leading to a 99 percent internet penetration rate and mobile internet speeds of 215 megabits per second, nearly double the global average.

These advancements place the Kingdom among the top 10 countries globally for mobile internet speed, according to the ITA.

Saudi Arabia was an early adopter of 5G technology, with coverage reaching 77 percent of the country — significantly above the global average — and 94 percent in Riyadh, positioning it among the world’s leading cities for 5G accessibility.

This high-speed internet expansion is fueling growth in e-commerce, telecommunications, and digital services, the ITA added.

The number of e-commerce users is projected to reach 34.5 million by 2025, with penetration rising from 66.7 percent in 2023 to 74.7 percent by 2027, according to the report.

Digital payments are also surging, aligning with Vision 2030’s goal of a cashless society. Electronic payments in retail transactions surpassed 57 percent in 2021, exceeding the 55 percent target set by the Financial Sector Development Program.

This shift is expected to further accelerate e-commerce growth, attracting more investment in digital financial services.

Dhedhi said: “Millennials, who constitute around 50 percent of the population, are key drivers of e-commerce growth due to their digital fluency and tech-savviness.”

He added: “Expats, on the other hand, prioritize the delivery experience more than locals and show a strong preference for international brands or diverse product offerings, contributing to a broader assortment in the offerings.”

Dhedhi said quick commerce players are tapping into the demand for fast delivery, affordable subscriptions, and influencer partnerships to target younger consumers.

By offering low delivery costs, they are setting new convenience standards. Chinese e-commerce giants including Shein and Temu have successfully attracted Gen Z and millennials with trendy, affordable products, despite occasional compromises in product quality, he said.

Urbanization and rising female workforce participation are further fueling the shift to online retail, with families increasingly relying on e-commerce for groceries, fashion, and household items.

Dhedhi noted that these demographic shifts are broadening the customer base, diversifying consumer behavior, and fueling the expansion of Saudi Arabia’s e-commerce sector, which plays a pivotal role in the Kingdom’s economic transformation.


Oil Updates — crude set for 3rd straight weekly decline amid tariff concerns

Updated 07 February 2025
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Oil Updates — crude set for 3rd straight weekly decline amid tariff concerns

LONDON: Oil prices rose on Friday after new sanctions were imposed on Iran’s crude exports but were on track for a third straight week of decline, hurt by US President Donald Trump’s renewed trade war on China and threats of tariffs on other countries.

Brent crude futures were up 51 cents, or 0.7 percent, at $74.80 a barrel by 3 p.m. Saudi time, but were poised to fall 2.6 percent this week. US West Texas Intermediate crude rose 48 cents, or also 0.7 percent, to $71.09 a barrel, down 2.1 percent on a weekly basis.

The US Treasury said on Thursday it was imposing new sanctions on a few individuals and tankers helping to ship millions of barrels of Iranian crude oil per year to China, in an incremental move to increase pressure on Tehran.

“Trump has talked about maximum pressure (on Iran). The market takes that quite seriously,” said Michael Haigh, global head of commodities research at Societe Generale. The French bank projects that Iranian oil exports are set to halve.

“The imposition of tariffs and the pauses should be bullish for the oil market because it adds uncertainty. But you haven’t seen this response because of demand concerns. Tariffs and tit for tat responses from nations, it hurts global GDP ... and oil demand,” Haigh added.

Trump had announced a 10 percent tariff on Chinese imports as part of a broad plan to improve the US trade balance, but suspended plans to impose steep tariffs on Mexico and Canada.

“Downside pressure has stemmed from the news flow around tariffs, with concerns over a potential trade war fueling fears of weakening oil demand,” analysts at BMI said in a note on Friday.

Oil prices settled lower on Thursday after Trump repeated a pledge to raise US oil production, unnerving traders a day after the country reported a much bigger-than-anticipated jump in crude stockpiles.

The benchmarks were also under pressure from swelling US crude inventories, which rose sharply last week as demand softened on ongoing refinery maintenance.


PIF’s SIRC, Germany’s Concord Blue to launch first phase of sewage to renewable hydrogen station

Updated 07 February 2025
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PIF’s SIRC, Germany’s Concord Blue to launch first phase of sewage to renewable hydrogen station

  • Both parties will offer innovative solutions that contribute to environmental sustainability and promote the circular carbon economy
  • Plan will see around 100 million tonnes of waste recycled annually

RIYADH: A new agreement between the Saudi Investment Recycling Co. and the German company Concord Blue will lead to the construction of a station in the Kingdom that converts sewage into renewable hydrogen.

The Public Investment Fund firm inked the memorandum of understanding with the engineering company for the first phase of the development, whereby the plant will use Concord Blue Reformer technology to develop sludge treatment projects resulting from sewage and other organic waste, according to a statement.

Concord Blue Reformer’s non-combustion reforming process uses the principles of staged reforming to efficiently and cleanly recycle waste into energy.

This falls in line with SIRC’s goal of actively leading the charge in implementing impactful waste reduction strategies, accelerating the widespread adoption of renewable energy solutions, and championing the principles of environmental justice.

It also aligns with the comprehensive plan announced by the Kingdom’s Ministry of Environment in January 2024, which targets recycling a significant portion — up to 95 percent — of the country’s waste.

“Under this memorandum, SIRC will provide sewage and agricultural waste as raw materials, while Concord Blue will convert this waste into renewable hydrogen, in addition to transferring knowledge in this field and training national cadres to build, operate and maintain facilities for converting waste into hydrogen,” said Faisal Al-Solami, executive vice president of finance and strategic planning at SIRC.

When fully implemented, the plan will see around 100 million tonnes of waste recycled annually, showcasing the nation’s commitment to sustainability.

Under the terms of the newly signed MoU, both parties will offer innovative solutions that contribute to environmental sustainability and promote the circular carbon economy by producing high-quality green hydrogen and manufacturing biochar and industrial-activated coal. 

Al-Solami said signing the agreement is a key step toward achieving Vision 2030’s recycling and sustainability goals, as it promotes environmentally friendly energy solutions from waste, reduces emissions, and supports an eco-conscious economy.

This comes as the first phase of the project will achieve several goals, including reducing the volume of waste sent to landfills, enhancing hydrogen production on a large scale, and developing innovative solutions to reduce carbon emissions.

It will also support local manufacturing projects and contribute to achieving a zero-carbon future by producing clean fuel that supports the transition to a hydrogen economy in the industrial and transportation sectors.


Closing Bell: Saudi main index edges up to close at 12,433

Updated 06 February 2025
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Closing Bell: Saudi main index edges up to close at 12,433

RIYADH: Saudi Arabia’s Tadawul All Share Index edged up on Thursday, gaining 19.18 points, or 0.15 percent, to close at 12,433.58. 

The total trading turnover of the benchmark index was SR6.88 billion ($1.83 billion), as 123 of the listed stocks advanced, while 96 retreated.  

The MSCI Tadawul Index increased by 2.23 points, or 0.14 percent, to close at 1,545.99. 

The Kingdom’s parallel market Nomu also rose, gaining 135.68 points, or 0.43 percent, to close at 31,386.27. This comes as 40 of the listed stocks advanced, while 39 retreated. 

The best-performing stock was Almasane Alkobra Mining Co., with its share price surging by 7.49 percent to SR68.9. 

Other top performers included the Thimar Development Holding Co., which saw its share price rise by 5.76 percent to SR56.9, and Makkah Construction and Development Co., which saw a 4.42 percent increase to SR108.60. 

Mutakamela Insurance Co. saw the largest decline of the day, with its share price dropping 2.19 percent to SR18.72. 

The Tanmiah Food Co. saw a decline of 1.99 percent, with its share price dropping to SR127.80, while the Saudi Industrial Investment Group fell by 1.69 percent to SR17.40. 

On the announcements front, Saudi Industrial Investment Group reported its annual financial results for 2024, with net profits reaching SR11 million, matching the previous year’s figure. 

Saudi Arabian Mining Co., known as Ma’aden, also announced the official launch of its US dollar-denominated trust certificates offering.

The offering is available to eligible investors both in Saudi Arabia and internationally, as part of Ma’aden’s strategic initiative to strengthen its financial position and expand investment opportunities. 

To facilitate the issuance, Ma’aden has appointed 10 companies as joint lead managers for the transaction, including Citigroup Global Markets Limited, HSBC Bank, Al Rajhi Capital Co., BNP Paribas, and GIB Capital.

The other five include J.P. Morgan Securities plc, Natixis, Saudi Fransi Capital, SNB Capital Co., and Standard Chartered Bank. 

In a statement to Tadawul, the company stated that the sukuk will be issued in two tranches, with maturities of 5 and 10 years. The minimum subscription amount is set at $200,000, with the final value and terms of the offering to be determined based on market conditions. 

Following the announcement, Ma’aden’s shares closed at SR48.15, up 4.05 percent in today’s session. 


Saudi crown prince launches ‘King Salman Automotive Cluster’ at KAEC

Updated 06 February 2025
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Saudi crown prince launches ‘King Salman Automotive Cluster’ at KAEC

RIYADH: Saudi Crown Prince Mohammed bin Salman has named the automotive manufacturing hub within King Abdullah Economic City the “King Salman Automotive Cluster,” the Saudi Press Agency reported on Thursday.

The King Salman Automotive Cluster will serve as a pivotal center for the automotive industry, housing the headquarters and manufacturing facilities for both local and international companies.

Notable brands, such as Ceer—the first Saudi electric vehicle brand—and Lucid Motors, which opened its first international factory in KAEC in 2023, are set to be key players in the cluster.

The site will also host multiple Public Investment Fund joint ventures with global manufacturers, including a highly automated factory with Hyundai Motor for car production in Saudi Arabia and a partnership with Pirelli to establish a tire factory.

This new cluster marks a significant milestone in Saudi Arabia’s economic diversification efforts, supporting the development of the automotive sector and advancing sustainable transportation. It will contribute to boosting the non-oil gross domestic product and increasing exports.

The King Salman Automotive Cluster will accelerate local manufacturing capacity, promote research and development, and optimize supply chains, making them more efficient for both regional and international markets.

The project is expected to create numerous investment opportunities for the private sector, fostering the growth of promising industries within the Kingdom.

By 2035, the cumulative GDP contribution from companies within the cluster is projected to reach approximately SR92 billion.

The cluster will generate thousands of direct and indirect jobs, support local manufacturing, and boost Saudi exports, positively impacting the nation’s balance of payments.

Leveraging KAEC’s robust infrastructure and its strategic location near a well-developed port, the cluster offers significant advantages for both local private sector entities and international companies. These factors will provide ample opportunities for collaboration between partners, suppliers, and investors within the automotive industry and related sectors.

The King Salman Automotive Cluster will play a key role in advancing the National Industrial Development and Logistics Program, which aims to position Saudi Arabia as a leading industrial hub and global logistics center by fostering high-growth sectors and attracting foreign investment.