Saudi Arabia, e-commerce and logistics
There has been huge expansion and transformation in both the economy and e-commerce in Saudi Arabia.
So is now the right time for you to start selling there? Here’s what you need to know.
Why Saudi Arabia?
Having grown to a global economic power in a relatively short space of time, the Kingdom of Saudi Arabia (KAS) is one of the fastest-growing economies in the Middle East.
There, you will find a tech-savvy bunch, and a government that is keen to support digitalisation initiatives. Attitudes to online shopping are quickly changing – penetration rates are at 65.5 – signifying great scope for e-commerce growth.
- 34 million
- Population size
- 73%
- Predicted e-commerce user penetration by 2027
- Fashion and apparel 23% 1
- Most popular e-commerce category
The e-commerce landscape
Advances in technology, the COVID-19 pandemic and changes in consumer behaviour have all driven substantial growth in the e-commerce sector in recent years. Statistics reveal a staggering increase in e-commerce sales growth from 2017 to 2023, with a jump from US$2.38 trillion to US$6.45 trillion.2.
Opportunities
With the upsurge in internet and mobile use, along with the government’s unwavering support for the sector’s growth, the adoption of online shopping platforms is expected to soar. Amongst the escalating adoption of digital innovations, digital wallets are primed to become the most prevalent form of online payment.
Predicted global e-commerce growth rate
Global e-commerce growth rate 2021 to 2026
Logistics
Saudi Arabia is certainly seeing greater parcel volumes, but domestic logistics has yet to catch up with this rapid escalation. Last mile deliveries continue to face numerous pressures in handling customer expectations and managing large volumes of packages, all exacerbated by gaps in technological support, such as digital tracking. 3
The essentials
| Transit Times | Up to 6 working days |
| Maximum Dimensions | 120cm × 60cm × 60cm |
| Maximum Weight | 30kg |
| Maximum Container Value | SAR 9,000 |
| Low-Value Limit | SAR 1,000 |
| Duty | Variable based on product; applicable on orders over SAR 1,000. Variable duty rates may apply |
Customs Clearance Processing Fees
| Classification | Declared Value (DV) (CIF) | Customs Processing Fee (%0.15 of DV, Min 15 Max 500 SR) | High Value Custom Duty (%5 of Declared Value) | %15 VAT of (DV + Custom Processing Fee + High Value Customs Duty) | Total Customs Fees in SR |
| Low Value | 100.00 | 15.00 | 0.00 | 17.25 | 32.25 |
| Low Value | 500.00 | 15.00 | 0.00 | 77.25 | 92.25 |
| Low Value | 999.00 | 15.00 | 0.00 | 152.10 | 167.10 |
| High Value | 1,000.00 | 15.00 | 50.00 | 159.75 | 224.75 |
| High Value | 1,500.00 | 15.00 | 75.00 | 238.50 | 328.50 |
| High Value | 10,000.00 | 15.00 | 500.00 | 1,577.25 | 2,092.25 |
| High Value | 15,000.00 | 22.50 | 750.00 | 2,365.88 | 3,138.38 |
| High Value | 333,333.00 | 500.00 | 16,666.65 | 52,574.95 | 69,741.60 |
| High Value | 500,000.00 | 500.00 | 25,000.00 | 78,825.00 | 104,325.00 |
Good to know
Drop-shipping – when an item is purchased from a third party and shipped directly to the customer – is gaining popularity in Saudi Arabia due to its low startup costs and ease of entry. One of the biggest challenges to this, however, is finding reliable suppliers who can provide high-quality products and timely delivery.4
What our experts say:
“The future of e-commerce in Saudi Arabia is undoubtedly bright. With an agile logistics partner helping you to manage the last mile of deliveries, you can establish a foothold at a promising time.”
Simon Perkins, Commercial Director, SAMOS.