Market Research Saudi: The Disruption of E-Commerce Market Entry

market research saudi ecommerce

The expansion of e-commerce does happen across the globe. Even with that market research Saudi often deals with oil and gas such as being a member of GULF organization. Saudi market entry now gets the same influence from online and digitalization in the economy. Market demand often changes and retail companies have some specific challenges to overcome once the demand is different. 

Most of the society in Saudi still does not like to purchase online shopping. While most of them are still thinking if it is not trustworthy to do. However, it is a new disruption for the government and society to make sure if they are able to apply this system in society. The youngsters should be able to catch up with the new changes in this digital era. 

Online Expansion Challenge in Saudi

Analysis says if Saudi is ready for an online and e-commerce expansion. Showed by the increasing number of online retail and payment by 35 percent in 2017. On the other hand, the government cannot find significant results once the offline or cash payment is still above 65 percent. Thus, the situation happened because there is no regulation that is favorable for online business to contribute. 

People’s mindset in Saudi still skeptical for online shopping, since they are having poor experience. Most of them still have low credit card penetration while cash payment is still popular. Particularly, huge obstacles do happen where merchants are experiencing bad experience to set up e-payment in the national banks. In fact, it is one of the lowest payment methods for customer satisfaction. 

Another situation is because most of the Saudi people live in three main cities. Including Riyad, Jeddah, and some other eastern regions, 65 percent of them are far from being reached by any further cities. Causing long travel times to malls especially, to bring their children. Thus, online shopping is important to further develop, and Saudi government does need to support the new fintech startup. 

Which Sector Are the Best for E-Commerce Market Entry?

Data provided by Saudi Government showed consumers in countries would love to purchase electronics online. There is a big difference with food and beverages purchase that is almost offline. On the other hand, food and beverages is the biggest expenditure in Saudi Arabia, reaching 65.8 billion Dollars. However, it is hard to provide an online purchase while the citizen is still skeptical with this method. 

Since the use of cash delivery is huge in Saudi means it would be hard for online players to manage their step. Mostly, the online shopper is a local female who lived in most big cities. 

Main Problem for Saudi E-Payment Development

  • Laws and regulation for e-commerce does need to be updated for digital economy development. 
  • Customers still have a lack of trust due to security and awareness for online shopping. 
  • There is still a costly process once it comes to set up the need for local merchants in developing online payment in national banks. 
  • Saudi still has poor pricing and delivery performance. 

Complex ecosystem would be hard to manage once online and e-commerce still has minor penetration in society. Market research Saudi depends on how electronics merchants are able to compete through technological readiness. Thus, it would be hard to manage other entities for having an online shopping or payment system. Population in Saudi still finds it hard to find a huge department store in rural areas.

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