As per the latest data released by the Saudi Arabia Minister of Commerce, the Kingdom is witnessing steady growth in its e-commerce businesses, as the total number of registered firms touched 36,330 in the third quarter of 2023, thereby registering a 12% annual rise.
As per the data, Riyadh topped the list with 14,497 business registrations, followed by Makkah (9,275), the Eastern Province (5,866), Madinah (1,792) and Qasim (1,222).
The registration growth was primarily attributed to the emergence of technology-driven sectors, including fintech, telemedicine, and custom software development. The trend also underscored the sector’s pivotal role in bolstering the national economy, with the Kingdom ranking among the top 10 countries globally in e-commerce growth.
Another salient feature in this upswing was the 56% rise in the number of firms registered in the electronic games development sector by the end of the third quarter of 2023, when compared to the same period in 2022.
Out of 2,803 new registrations, Riyadh topped with 1,613 registrations, followed by Makkah (622), Eastern Province (322), Madinah (98) and Asir (42).
In August, while speaking during the ‘Next World Forum’ in Riyadh, Saudi Esports Federation Chairman Prince Faisal bin Bandar said that the Kingdom’s population was passionate about gaming and, if utilized wisely, the trend could transform itself as a prolific career path.
Coming back to the surge in e-commerce registrations, telecare and telemedicine centres saw registrations jumping by 33% year-on-year in the third quarter of 2023 to reach 757.
Riyadh came first with 404 registrations, followed by Makkah (190), Eastern Province (66), Madinah (29) and Qassim (15).
According to the management consulting firms Kearney and Mukatafa, the Saudi e-commerce scene is currently worth SAR 19.3 billion, 5.9% of the overall SAR 347.2 billion market. By 2026, this is anticipated to grow to USD 34.7 billion, or 7.6% of the market.
“As it rises, however, the amount of cross-border trade is likely to diminish from 59% of all e-commerce revenue, to 49% by 2026,” the consulting agency noted in August 2023.
Kearney and Mukatafa also noted that local homegrown players are increasingly entering into the e-commerce market.
Prince Waleed Bin Nasir Bin Fahad Al Saud, first-cousin of Crown Prince Mohammad bin Salman, and CEO of Mukatafa said, “It is a strong sign that local e-commerce businesses are gaining more traction in the market. We must make sure that these businesses are supported to thrive as well as cross-border accounts.”
In terms of the fintech solutions sector, the number of companies registered in Saudi Arabia in the same period climbed by 21% in comparison to the corresponding period a year ago to reach 2,831.
As the Kingdom eyes an aggressive economic diversification under the ‘Vision 2030’ roadmap, its fintech sector is witnessing a boom with the number of ventures operating in the sector more than doubling in 2023, compared to 2022.
Ayman Al-Sayari, governor of the Saudi Central Bank, also known as SAMA, said in September 2023 that as of August 2023, over 200 of these firms were present in the economy, up from 89 in 2022.
“We view Saudi as an incredibly exciting place to be doing business at the moment. I’ve been coming regularly for over five years and just seeing the rapid expansion there across, of course, the megaprojects like ROSHN and others that we’re very happy and excited to be involved in, but (also) all of the things which are pointing toward Vision 2030,” said Chris Sheldrick, co-founder and CEO of what3words.