How e-commerce penetration has doubled in Saudi Arabia

Khalid said during the pandemic, e-commerce penetration rose to 6 percent, up from around 3 percent before Covid-19.

“These are the months where decades have happened for us,” he said at the fifth edition of the Future Investment Initiative (FII) Institute conference in Riyadh on Wednesday. “We saw up to 10 times more demand in certain categories.”

Consumer nature has shifted dramatically since the onset of Covid-19 that forced adoption of digital purchasing. The rise of social media that had taken root well before the pandemic has also played into how consumers now view the buying experience.

“Wherever that consumer wants to go, we have to be there. Whether that’s TikTok or Instagram,” said John Hadden (pictured above), CEO of retail company Alshaya Group. “Because we can’t just assume they’re going to come into brick-and-mortar stores and malls anymore because they’re more hesitant.”

In the UAE, the e-commerce retail market grew by 53 percent year-on-year, reaching a record $3.9 billion in 2020.

“Over the next five years, more and more online users will become internet shoppers, and one thing you can be sure of is that expectation is always going to go up,” Khalid (pictured below) said.

Already, consumers expect things fast. The rise of quick-commerce, or delivery of certain goods in 20 to 30 minutes, has shifted expectations that more goods can be delivered the same day they’re ordered.

“Quick commerce is the next big thing. Instant gratification is real,” Khalid said.

Yusuff Ali M.A. (pictured below), chairman and managing director of multinational conglomerate Lulu Group International, warned though that when the delivery times are fast, customers “can’t ask for the world”.

“It has to be a limited set of goods offered,” he said.

While technology adoption quickens to deliver goods to consumers faster than ever, technology is also being integrated in new ways into the brick-and-mortar experience.

“Within the brick-and-mortar stores we’re looking at how we can be efficient using automation,” Ahmad BinDawood, CEO, retail operator BinDawood Holding said.