New Regulatory Sandbox for Boosting Growth, on the Rise

Communications and Information Technology Commission (CITC), Saudi Arabia’s digital regulator, revealed that applications for delivery to operate, in the Kingdom, have risen by over 460%, in just 2-year.

With number surging from 3 in the Q4, 2019 to 17, at the end of 2021.
Such a rapid development of the delivery application ecosystem has been made possible by the CITC’s new regulatory sandbox.

It is a powerful tool for technology and regulation development that has produced one of the Kingdom’s first success stories of the year: Jahez, in short.

It is an online food delivery platform, that became the first company to make an initial public offering, in Saudi Arabia, in 2022, implying a market value of SR 8.9bn.
The sandbox initiative, phase one of which was launched, in 2020, was introduced as a response to the jump in demand for online commerce, during the pandemic. CITC’s move to support the digital delivery space has seen a marked increase, in the online ordering activity, with a daily average of requests rising from 117,000, in Q4, 2019 to 525,000, in the Q4, 2021. Average monthly order value, meanwhile, increased from SR310mln to SR1.75bln over the same time span.
The delivery sector was put under enormous strain during the pandemic, and the introduction of the sandbox has brought crucial flexibility and investment in the market.
Sandbox is a regulatory environment, in which delivery agents can trial new applications and processes, in a space that allows for experimentation while protecting consumers.

The concept has been successfully deployed, in financial markets, worldwide, but the Kingdom’s use of it in the delivery app segment, places it at the forefront of global regulatory innovation.
The implementation of phase two, which began in January 2021, reasserted assessment and advisory to the areas of consumer protection, quality of service, and business legality.

All sandbox companies enjoy an array of benefits, including regulatory support, assistance with obtaining funds, access to development workshops, training courses, and intellectual property registration as well as protection, according to SPA.
CITC’s collaborative approach between the private sector and the regulatory body aims to drive innovation and localization in the sector, while ensuring that the Kingdom keeps pace with the fast-emerging and growing digital economy.