Saudi Arabia E-commerce Market Expected to Reach USD 708.7 Billion by 2033 | Projected CAGR of 12.8%

Saudi Arabia’s E-commerce market size reached USD 222.9 billion in 2024. The market is projected to reach USD 708.7 billion by 2033, exhibiting a growth rate (CAGR) of 12.8% during 2025-2033, according to Industry Today.

According to IMARC Group’s latest research publication, “Saudi Arabia E-commerce Market Report by Type (B2C E-commerce, B2B E-commerce), and Region 2025-2033”, the Saudi Arabia E-commerce market size reached USD 222.9 billion in 2024. Looking forward, IMARC Group expects the market to reach USD 708.7 billion by 2033, exhibiting a growth rate (CAGR) of 12.8% during 2025-2033.

Growth Factors Driving the Saudi Arabia E-commerce Industry

High Internet and Smartphone Penetration

E-commerce is a booming business in Saudi Arabia due to the popularity of internet and usage of smartphones. Online shopping is a habit with more than 95 percent of the population having access to high-speed internet and 97 percent of them possessing smartphones. This virtual infrastructure has allowed individuals to browse through mobile applications or websites easily and shop, which is why, e-commerce stores such as Amazon.sa and Noon have become pop culture names. The demand of the government of free Wi-Fi hotspots nationwide has also closed the connectivity gaps even in the most distant corners. In 2023, Online purchases from internet users increased to 63.7 percent; leading the purchases is the women group who made 74.6 percent of purchases. This move towards high technology coupled with the fact that the average population of this country is 30 years makes this an ideal environment to foster e-commerce as far more customers are choosing to shop in online markets than in traditional stores.

Vision 2030 and Government Support

Saudi Vision 2030 by the Saudi government is a game-changer in e-commerce advocating digital economy with policies which support e-retailing. To help back up e-stores, the Ministry of Commerce has implemented ten projects that would foster the shift to the digital version of local businesses. The easing of regulations such as 100 percent foreign ownership of licensed e-commerce sites has seen the likes of Amazon coming into the market and doubling its warehouse space in Riyadh in 2023. Improved logistics, including modernization of the Saudi Post is provided at the expense of the Ministry of Communications, which means expedited delivery. Saudi E-commerce Council controls online stores and earns customer confidence through safe payment platforms and licensing provisions. In 2023, e-commerce venture capital amounted to 428 million, indicating how the government support is transforming Saudi Arabia into a leading e-commerce maven.

Growing Consumer Trust in Digital Payments

Shoppers in Saudi Arabia are warming up to digital payments, driving e-commerce growth. While cash-on-delivery was once king, platforms like Mada, Apple Pay, and STC Pay have made online transactions smoother and safer. In 2021, electronic payments accounted for over 57% of retail transactions, surpassing government targets. This shift builds confidence, especially with secure gateways and fraud prevention measures on platforms like Amazon.sa, which sees 20.8 million monthly visits. Flexible return policies and reliable delivery services further ease concerns about online shopping. The rise of Buy Now, Pay Later (BNPL) options, led by companies like Tamara and Tabby, caters to younger shoppers, making high-value purchases more accessible. This trust in digital systems encourages more Saudis to shop online, boosting the market significantly.

Emerging Trends in the Saudi Arabia E-commerce Market

Surge in Mobile Commerce

Saudi Vision 2030 by the Saudi government is a game-changer in e-commerce advocating digital economy with policies which support e-retailing. To help back up e-stores, the Ministry of Commerce has implemented ten projects that would foster the shift to the digital version of local businesses. The easing of regulations such as 100 percent foreign ownership of licensed e-commerce sites has seen the likes of Amazon coming into the market and doubling its warehouse space in Riyadh in 2023. Improved logistics, including modernization of the Saudi Post is provided at the expense of the Ministry of Communications, which means expedited delivery. Saudi E-commerce Council controls online stores and earns customer confidence through safe payment platforms and licensing provisions. In 2023, e-commerce venture capital amounted to 428 million, indicating how the government support is transforming Saudi Arabia into a leading e-commerce maven.

Growth of Cross-Border E-commerce

There is a boom in cross border e commerce with Saudis being in need of international brands and variety of products. Social sites such as AliExpress and Trendyol have been successful in international shipments of products and Aramex is the best shipping company to have made it easier. Logistics is cited as an issue by 42 per cent of e-commerce firms as of 2023, and local warehousing such as the 2.7 million cubic foot Amazon fulfillment centre in Riyadh is reducing the delivery period. This trend can be supported by the logistics improvements of Vision 2030 such as the improvement of ports and airports that streamline the customs clearance. Customers enjoy reduced prices and diversity and fashion and electronics are the most popular categories to be purchased across the borders. This development provides an opportunity to local sellers to target markets across the world as Saudi Arabia strives to emerge as a logistics hub that links three continents so that they can enjoy a flourishing cross-border e-commerce environment.

AI and Personalization in Shopping

AI is helping in the e-commerce platforms in Saudi Arabia to make shopping more personal and efficient. With the help of AI-powered applications, such as the product recommendation engines on Noon and Amazon.sa, these companies can process user data and personalize it to support improving indecisiveness and satisfying a customer by proposing an item they have a high chance of liking. Chatbots respond immediately to requests, and augmented reality (AR) will allow dress customers to put on clothes or imagine furniture to reduce returns. As an example, AR is applied on such fashion sites as Namshi so that online shopping should be more enjoyable. Data analytics is also beneficial when a business needs to follow a trend, whereby electronics are the most likely leading trend with 23 per cent of e-commerce revenue by 2024. Automatic inventory decreases delays and thus deliveries are faster. These technology breakthroughs are in line with the efforts of Vision 2030 in realizing the future of digital transformation, thus making online shopping smart and more interactive to the Saudi consumers, who are considering more and more a personalized experience without the need to put any effort.