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Saudi E-commerce Set to Reach $44 Bln by 2030

The BIBAN e-commerce gathering in Saudi Arabia (SPA)
The BIBAN e-commerce gathering in Saudi Arabia (SPA)
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Saudi E-commerce Set to Reach $44 Bln by 2030

The BIBAN e-commerce gathering in Saudi Arabia (SPA)
The BIBAN e-commerce gathering in Saudi Arabia (SPA)

Saudi Arabia is working to improve its investment climate for e-commerce, aiming to attract more local and international companies to tap into this rapidly growing market, projected to reach $44 billion by 2030.

Enhancing the e-commerce sector is a key goal of the National Transformation Program, supporting Saudi Arabia’s “Vision 2030.”

This move is vital for boosting the national economy, as the Kingdom ranks among the top 10 fastest-growing countries in e-commerce.

The program plays a crucial role in empowering the private sector and improving government efficiency to drive the country's transformation and meet the vision's targets.

Experts emphasize the importance of e-commerce for large companies, both locally and globally, as they increasingly turn to online platforms to expand their businesses.

Saudi Arabia is creating a competitive environment for both local and foreign companies by adopting new technologies, which is energizing the Saudi market.

Dr. Mohammed bin Duleim Al-Qahtani, an economic analyst and academic at King Faisal University, predicts a 13.5% annual growth in Saudi Arabia's e-commerce sector, surpassing the global average of 11.2%.

Speaking to Asharq Al-Awsat, he expected the sector, currently valued at $21 billion, to exceed $30 billion by 2027 and reach around $44 billion by 2030.

Al-Qahtani highlighted Saudi Arabia’s focus on digital infrastructure and e-commerce, leveraging its strategic location.

He stressed the importance of expanding e-commerce and digital banking, suggesting internationalizing branches of major local banks.

Al-Qahtani also emphasized global efforts, led by G20 nations like Saudi Arabia, to address e-commerce challenges and ensure cyber and financial security.

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Revenue Growth, Improved Operational Efficiency Boost Profitability of Saudi Telecom Companies

A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)
A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)
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Revenue Growth, Improved Operational Efficiency Boost Profitability of Saudi Telecom Companies

A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)
A man monitors the movement of stocks on the Saudi Tadawul index. (AFP)

Telecommunications companies listed on the Saudi Stock Exchange (Tadawul) achieved a 12.46 percent growth in their net profits, which reached SAR 4.07 billion ($1.09 billion) during the second quarter of 2024, compared to SAR 3.62 billion ($965 million) during the same period last year.

They also recorded a 4.76 percent growth in revenues during the same quarter, after achieving sales worth more than SAR 26.18 billion ($7 billion), compared to SAR 24.99 billion ($6.66 billion) in the same quarter of 2023.

The growth in the revenues and net profitability is the result of several factors, including the increase in sales volume and revenues, especially in the business sector and fifth generation services, as well as the decrease in operating expenses and the focus on improving operational efficiency, controlling costs, and moving towards investment in infrastructure.

The sector comprises four companies, three of which conclude their fiscal year in December: Saudi Telecom Company (STC), Mobily, and Zain Saudi Arabia. The fiscal year of Etihad Atheeb Telecommunications Company (GO) ends on March 31.

According to its financial results announced on Tadawul, Etihad Etisalat Company (Mobily) achieved a 33 percent growth rate of profits, bringing its profits to SAR 661 million by the end of the second quarter of 2024, compared to SAR 497 million during the same period in 2023. The company also achieved a 4.59 percent growth in revenues to reach SAR 4.47 billion, compared to SAR 4.27 billion in the same quarter of last year.

The Saudi Telecom Company achieved the highest net profits among the sector’s companies, at about SAR 3.304 billion in the second quarter of 2024, compared to SAR 3.008 billion in the same quarter of 2023. The company registered a growth of 4.52 percent in revenues.

On the other hand, the revenues of the Saudi Mobile Telecommunications Company (Zain Saudi Arabia) increased by about 6.69 percent, as it recorded SAR 2.55 billion during the second quarter of 2024, compared to SAR 2.39 billion in the same period last year.

Commenting on the quarterly results of the sector’s companies, and the varying net profits, the head of asset management at Rassanah Capital, Thamer Al-Saeed, told Asharq Al-Awsat that the Saudi Telecom Company remains the sector leader in terms of customer base expansion.

He also noted the continued efforts of Mobily and Zain to offer many diverse products and other services.

Financial advisor at the Arab Trader Mohammed Al-Maymouni said the financial results of telecom sector companies have maintained a steady growth, up to 12 percent, adding that Mobily witnessed strong progress compared to the rest of the companies, despite the great competition which affected its revenues.

He added that Zain was moving at a good pace and its revenues have improved during the second quarter of 2024. However, its profits were affected by an increase in the financing cost by SAR 26.5 million riyals and a rise in interest, while net income declined significantly compared to the previous year, during which the company made exceptional returns.