E-commerce sales in Saudi Arabia are projected to reach $7.7 billion next year and forecast to expand by an annual average of 12 percent to $10.5 billion in 2022, Fitch Solutions Macro Research said in a new report.
"We believe Saudi Arabia will be the next Middle East and North Africa (MENA) market of interest for e-commerce investors looking at opportunities beyond the UAE," the consultancy noted.
Saudi Arabia ranks second in Fitch’s e-commerce index for the MENA region and is the only other market in the region besides the United Arab Emirates (UAE) to score above the global average of 50.
According to the report, the Kingdom has the largest population out of the Middle Eastern states in the index, which is expected to reach 34 million in 2019. Nearly 84 percent of the population is urbanized, making it easier to develop logistics networks, especially final mile.
In addition, Saudi Arabia already outperforms the UAE in terms of its large share of 3G/4G subscribers with 87.3 percent of mobile subscribers in the country having 3G/4G subscriptions, compared to 78.4 percent in the UAE.
"This makes the market ripe for m-commerce to develop and gain dominance in the e-commerce sphere. The young adult consumer base, with 35.5 percent of Saudi Arabia's population aged between 20-39 years in 2019, will further support the growing m-commerce market," the report stated.
Meanwhile, Fitch forecasts e-commerce sales in the UAE to grow by an average of 23 percent annually between 2018 and 2022, to reach $16 billion next year, and rising to $27.1 billion by 2022.
Overall, the MENA region is likely to record e-commerce sales growth of 21.4 percent in 2019 to reach $28.5 billion. The region is projected to have the fastest e-commerce sales growth globally, projected to average 18 percent annually over the medium term (2018-2022).
E-commerce sales in MENA are projected to average 18 percent annually between 2018 and 2022, above that of the biggest e-commerce market (Asia) where sales are forecast to grow by 14 percent over the same period.
However, MENA lags in terms of total e-commerce sales by value, with sales projected to touch $28.5 billion in 2019, placing it above Sub-Saharan Africa's $9.1 billion, but below Central and Eastern Europe ($56.9 billion) and Latin America ($64.2 billion), the report added.
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