Amazon: Saudi Arabia, UAE Have Fastest Growing E-Commerce

Ronaldo Mouchawar, Vice President of Amazon for the Middle East, North Africa, and Türkiye
Ronaldo Mouchawar, Vice President of Amazon for the Middle East, North Africa, and Türkiye
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Amazon: Saudi Arabia, UAE Have Fastest Growing E-Commerce

Ronaldo Mouchawar, Vice President of Amazon for the Middle East, North Africa, and Türkiye
Ronaldo Mouchawar, Vice President of Amazon for the Middle East, North Africa, and Türkiye

Ronaldo Mouchawar, Vice President of Amazon for the Middle East, North Africa, and Türkiye, noted that e-commerce in the region is evolving rapidly, with Saudi Arabia and the UAE as the fastest-growing markets, where the number of online shoppers has doubled over the past two years.

Speaking with Asharq Al-Awsat during Amazon’s participation in the eighth annual Future Investment Initiative (FII) in Riyadh, Mouchawar highlighted significant growth in regional e-commerce, which is projected to reach a market value of $260 billion by 2029, driven by accelerating digital transformation, according to Mordor Intelligence.

He explained that about 70% of the region’s population is under the age of 40, boosting the adoption of digital technologies. The region also has one of the world’s highest smartphone penetration rates, with internet access at 99%.

Features like “Buy Now, Pay Later” and digital wallets are making online shopping more convenient. Generative AI is particularly enhancing customer experience and driving business growth, with PwC forecasting that AI will contribute $320 billion to the Middle East economy by 2030, equating to around 11% of the region’s GDP.

Mouchawar emphasized that fintech is driving major shifts in digital commerce by enabling flexible, easy-to-use payment options that enhance customer convenience. He added that governments in the Middle East and North Africa are supporting digital growth with large-scale investments.

He also discussed initiatives like Saudi Arabia’s Vision 2030, which is accelerating the adoption of smart technology and supporting small and medium enterprises (SMEs) to increase their contribution to GDP to 35% by the decade’s end.

Mouchawar shared Amazon’s collaboration with Saudi Arabia’s General Authority for Small and Medium Enterprises (Monsha’at) to empower 40,000 SMEs by 2025. Last year, Amazon launched the Amazon Academy in Saudi Arabia, aligning with Vision 2030’s Human Capability Development Program.

He noted that around 43% of all startup funding in the region comes from Saudi Arabia, reflecting the promising opportunities for startups and tech entrepreneurs. By the end of 2023, the number of SMEs in Saudi Arabia surpassed 1.3 million, marking a 200% increase since the launch of Vision 2030. In 2022, Amazon partnered with Monsha’at to host 40,000 SMEs on its platform by 2025.

According to Mouchawar, Saudi Arabia is continuously investing in strengthening its digital infrastructure and embracing technologies like AI and big data analytics, which are improving customer experience, enhancing supply chains, and advancing logistics infrastructure. Additionally, the government announced plans this year for a $40 billion investment fund to support AI development.



Saudi Arabia’s Private Sector Ends 2024 with Strongest Sales Growth

 The Saudi capital, Riyadh (AFP)
 The Saudi capital, Riyadh (AFP)
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Saudi Arabia’s Private Sector Ends 2024 with Strongest Sales Growth

 The Saudi capital, Riyadh (AFP)
 The Saudi capital, Riyadh (AFP)

Saudi Arabia’s non-oil private sector concluded 2024 on a high note, with significant increases in sales and business activity fueled by robust domestic and international demand.
The Kingdom’s non-oil GDP is expected to grow by over 4% in both 2024 and 2025, supported by notable improvements in business conditions, according to Riyad Bank’s Purchasing Managers’ Index (PMI) report.
Despite inflationary challenges, the Riyad Bank PMI recorded 58.4 points in December, reflecting strong and accelerated economic recovery, albeit slightly lower than November’s 59.0 points.
The solid performance highlights improvements across non-oil sectors, with new business activity in December growing at its fastest pace in 12 months. This growth reflects rising domestic and global demand. Renewed marketing efforts and strong customer demand encouraged companies to boost production and expand operations, particularly in wholesale and retail.
The PMI has remained above the neutral threshold of 50.0 points since September 2020, signaling continuous expansion in Saudi Arabia’s non-oil economic activity.
The International Monetary Fund (IMF) previously projected sustained momentum in Saudi Arabia’s non-oil reforms, estimating non-oil GDP growth for 2024 at between 3.9% and 4.4%. The IMF noted that growth could reach 8% if reform strategies are fully implemented.
Expansion in International Markets
A surge in exports was among the key factors driving non-oil economic growth in Saudi Arabia. December saw the largest increase in export orders in 17 months, underscoring the success of Saudi policies in opening new markets and fostering strong international trade relationships, supported by ongoing product innovation.
Higher domestic and international demand boosted production levels in December. Companies also worked to enhance operational efficiency, leading to a notable increase in inventory. Purchasing activity accelerated to its highest level in nine months, reflecting the sector’s ability to effectively meet rising demand.
Cost Pressures on Production
Despite significant growth in production and sales, the sector continues to face challenges related to sharp inflation in input costs, driven by heightened demand for raw materials. These pressures have led to higher product prices, although some companies opted to reduce prices to remain competitive and address elevated inventory levels.
Meanwhile, wage cost increases were less pronounced, helping mitigate economic pressures related to salaries.
Future Outlook
Dr. Naif Al-Ghaith, Chief Economist at Riyad Bank, highlighted the positive end to 2024 for the Kingdom’s non-oil private sector, reflecting the progress achieved under Saudi Arabia’s Vision 2030. He noted that the PMI score of 58.4 points demonstrates the sector’s resilience and ongoing expansion.
Al-Ghaith expects non-oil GDP to grow by over 4% in 2024 and 2025, driven by improved business conditions and rising new orders, signaling increased market confidence and demand. Elevated domestic demand and export growth have pushed total sales to their highest level in a year. This, in turn, has led to strong increases in business activity and inventory levels, demonstrating the sector’s ability to meet and capitalize on excess demand, he underlined.