Jeddah – E-commerce experts have revealed that Saudis make up 55 percent of online shoppers in the region and spend an average of SR 3,000 on online purchases per month, a local daily reported.
Of the total population in Saudi Arabia, 32% of Saudi nationals are e-commerce customers as well as 59% of all non-Arab residents.
Online shopping has attracted many businesses to incorporate for its many benefits, including easy accessibility, product reviews that boost sales, speed of service, and lower costs to the seller.
Additionally, internet penetration in the region is high as the number of devices is growing rapidly with an average of two internet enabled devices per person.
Some of the main challenges facing e-commerce sellers in the Kingdom include the lack of a reliable payment system, a loophole in regulation and maintaining a trustworthy environment, among others.
“Most SMEs are turning to online stores because it’s cheaper and more convenient for consumers,” said Mohannad Alnabulsi, deputy general manager and director of accelerators at Qotuf, an incubator and executive arm of the company. ‘Authority for SMEs.
“Of all online purchases, 40% were returned to the seller while 78% are happy with their online experience,” he said. “It shows that e-commerce is strong in Saudi Arabia.”
However, payment remains a challenge due to customers’ fear of paying by credit card.
“These fears are based on the fact that hackers are hiding on the Internet, and the use of their credit card could pose a threat to their financial security if these hackers gain access to their information,” Alnabulsi said. “Another disadvantage of dealing with e-commerce stores is that the service is highly dependent on the quality of the store’s services before and after the sale, although a solution is used today by opting for a payment system. cash on delivery. “
In Saudi Arabia, e-commerce is considered one of the fastest growing industries, but remains new. Consumers online remain focused on money, according to business owners and entrepreneurs.
“A large majority of people prefer to pay in cash upon receipt of delivery, which creates a lot of problems for the seller. We look forward to regulations allowing online debit card payments, as not everyone has a credit card, ”said Ammar Waganah, CEO of Dokkan Afkar.
The infrastructure is still not finished, said Lulwa Al-Sudairy, young entrepreneur and CEO of Artistia.com. “There are a lot of loopholes in the system in terms of logistics, shipping and even maps,” she explained. “It’s hard to deliver products because people don’t realize they need specific addresses so they can be delivered on time. There is a government initiative to help citizens find their addresses, but people are still not used to putting specific addresses by street name and house number.
More needs to be done to educate the consumer, she added. “Scams were a major problem, but they are starting to decrease as security requirements increase and people are more aware of how to shop online by checking rankings, choosing the right social media accounts and by reading product reviews before making a purchase. “
Last year, the Ministry of Trade and Investment confiscated 90 social media accounts that marketed more than 45,000 fraudulent advertisements for fraudulent products to more than 1.5 million people. Vendors caught selling such products are charged with an offense and can be sentenced to prison terms of up to 3 years and a fine of SR 1 million.
Currently, a law regulating electronic commerce is absent in the Kingdom despite an observed growth in the sector. The Ministry of Trade and Investment has been drafting an e-commerce law since 2014.
“The draft regulation aims to promote a trustworthy environment for online transactions and includes stipulations on online errors, protection of personal data, online advertising and conditions regarding warranty guarantees and policies of return, ”ministry spokesman Abdulrahman Alhussein told Saudi Gazette.
“The draft regulations also require sellers to disclose their contact details and provide the terms and conditions of the contract between the seller and the customer. In addition, providing a detailed receipt of the cost, including all charges, is also a requirement of the ministry to all online sellers, ”he added.
The project is currently under review by several factions. No details were disclosed on the date of its implementation.