By Sidra Tariq
Saudi Arabia’s e-commerce transactions made through Visa record a 43 per cent growth in Q1 2014, when compared with the same period last year, according to Visa figures released last week.
Both domestic and cross-border activities, largely driven by general department store and airline transactions, as well as travel agencies, financial services and fashion retail categories, helped drive the growth, the company reveals. While domestic e-commerce grew by 67 per cent in Q1, cross-border transactions increased by 36 per cent.
Last year, Visa estimated that the GCC e-commerce industry will grow by 35 per cent year on year to reach $15 billion in 2015. “The kingdom has been one of the leading markets in the GCC to have embraced electronic payments, alongside rapid internet and broadband penetration, which has resulted in the greater adoption of financial cards for e-commerce transactions,” says Ahmed Gaber, country manager at Visa.
By 2012, Saudi Arabia had 8.5 million internet users, reflecting an internet penetration rate of 60 per cent, according to the Ipsos MediaCT’s February 2013 report, entitled: Ipsos Online Audience Measurement in the Arab World.
“The growth of e-commerce in Saudi Arabia has also benefited from wider merchant acceptance, growth in retail space and improved financial literacy among the wider population,” Gaber adds.
According to Visa, a growing number of banks in the kingdom are now introducing payment cards, targeting segments such as women, frequent travellers and those seeking shari’a-compliant products.