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Saudi sees a 180% surge in monthly online shoppers in the past 48 months

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Riyadh – Asdaf News: Amidst an era marked by swift digital transformation, Saudi Arabia’s digital payments ecosystem has demonstrated exceptional growth, while Saudi consumers continue to be increasingly enthusiastic about online shopping demonstrated by an impressive 180% increase in monthly e-commerce shoppers since 2020. These insights and more were revealed in Checkout.com’s 4th annual MENA e-commerce report.

The leading global payments solution provider’s report titled: “The State of Digital Commerce in MENA 2024: A Tale of Rapid, Sustained Growthhighlights the dynamic evolution of the region’s digital commerce landscape, with data showing a remarkable trend towards digital payments and underlining the importance of digital commerce platforms in meeting the evolving needs and preferences of consumers in the kingdom.

As the digital economy in the MENA region continues to flourish, the report sheds light on how consumers engage with online shopping, their favored platforms for transactions, and the potential for merchants to enhance their digital payment strategies. Over the past four years, Checkout.com has closely monitored the rapid growth of e-commerce in the region. The latest report provides a comprehensive review of trends spanning 48 months, illustrating the significant evolution in digital commerce during this period.

The state of the digital economy

This year’s report underscores the resilience and growth potential of the digital economy, revealing that over half of Saudi consumers 53% are looking to boost their online spending in the next 12 months. This optimistic outlook reflects the digital economy’s resilience and the still untapped growth potential in Saudi Arabia. The findings also shed light on a staggering 90% surge in the number of daily online shoppers among Saudis over the past four years. These trends underscore a growing preference for digital commerce.

This data underscores a notable and consistent transition in online shopping habits within the kingdom. Furthermore, it signals a heightened trust in digital payments and e-commerce. It also attests to Saudi’s rapid embrace of digital commerce, fueled by a growing consumer preference for online shopping.

Furthermore, the kingdom’s commitment to digitalization has fostered an environment conducive to the flourishing of fintech firms. Supported by innovative products like AFT (Automated Funds Transfer) and driven by the ambitious targets of Vision 2030, which aims to cultivate 525 fintech entities by 2030, the landscape is ripe for transformative growth in the financial technology sector.

From a regional perspective, the report highlights MENA consumers’ fast adoption of digital payments with the overall volume of digital payment transactions in MENA growing nearly seven-fold 658% since 2020. Consumers in MENA have a very optimistic outlook on their future online spending, the report reveals that half of them anticipate an increase in their online spending over the next 12 months.

Remo Giovanni Abbondandolo, General Manager for MENA at Checkout.com, notes: “Saudi Arabia is witnessing a remarkable transformation in its digital commerce, aligned with the country’s Vision 2030 to become a predominantly cashless society. The data released in our report is a testament that e-commerce is more intertwined in Saudi consumers’ lives than ever before, and further pins the Saudi Central Bank announcement made earlier this year which confirmed digital payments in Saudi had reached 70% of total retail payments in 2023.”

“We are experiencing an unprecedented era of digital transformation in the kingdom. Saudi’s commitment to advance its infrastructure, platforms, and policies to facilitate a digital strategy is undeniably producing significant outcomes, evident in the expansion of e-commerce volumes and the widespread adoption of digital payment tools by merchants across various sectors,” he added.

Payment security is the key loyalty driver

The report also underscores Saudi Arabia’s notable shift towards convenient and secure digital payment alternatives. This transition is primarily propelled by consumers’ increasing prioritization of payment security.

The report also highlights the number of respondents ranking payment security as the most important feature offered by an e-commerce business is growing exponentially. with 39% of Saudi consumers having highlighted payment security as their top concern when shopping online, a sentiment that aligns with the 32% of Saudi consumers who have reported being victims of online payment fraud.

Furthermore, the report emphasizes the need for optimized payment performance, as an alarming 28% of Saudi shoppers would switch to a competitor following a single failed payment, a critical consideration for retailers in the country.

“Whilst ease of use is key for payments, security is the foundation for consumers’ trust. Finding the right balance between usability and security is crucial for fostering a healthy relationship between merchants and end users in the world of payments. By prioritizing both ease of use and robust security measures, businesses can instill trust and confidence in their payment systems, retain their customers and ultimately enhance the overall customer experience,” said Abbondandolo.

The unmistakable demise of cash

The report also marks a significant shift away from cash on delivery (COD) towards digital payment methods. This shift is particularly pronounced in the UAE, where there’s been a remarkable 66% decrease in preference for COD over the last 48 months. This significant shift mirrors a broader trust in and acceptance of digital payments, with 75% of Saudi consumers indicating they would opt for card payments if COD was not an option. This shift reflects a broader trust in and acceptance of digital payments, aligning with trends observed across the MENA region.

The report also highlights the rapid adoption of digital wallets such as Apple Pay and Google Pay, which have seen significant growth rates between 2020 and 2023, indicating a shift towards more diverse payment preferences.

“As the confidence in digital payment methods grows, it is not a surprise to see a decline in the preference for COD as a payment method. This presents a unique chance for businesses to keep their costs down. With new technologically advanced payment solutions presenting a more scalable and consumer-friendly experience, the complexity and cost of legacy operations for businesses will continue to decline,” said Abbondandolo.

Diverse spending and payment preferences

A trend evident in this year’s report, is the significant growth in digital commerce across various retail sectors, moving beyond the conventional focus on essential items such as food, groceries and clothing. This year, there’s been a noticeable increase in consumers purchasing a diverse range of products online, including household items, electronics, furniture, event tickets, travel services, and beauty and luxury products. This highlights that digital commerce, fintechs, wallets and remittances are becoming an integral part of everyday life, encompassing a wide spectrum of goods and services.

From a Saudi perspective, consumers show varied online spending habits, with Electronics topping the list at 59%, followed by food and prepared meals 51%, and clothing and fashion 48%.

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