With several promotional websites mushrooming in the Kingdom, e-commerce spending has reached its peak making local online shoppers increasingly tempted to take advantage of the great discount deals but adversely affecting their monthly budget.
“These websites that provide deals and discounts always mess up my monthly budget,” says Haifa Al-Khalid, a Saudi housewife. “It is hard to resist the deals and it is only toward the end of the month that I realize I’ve wasted most of my money adding unimportant stuff to my cart. If I was a bit more careless, I would lose my whole salary to these tempting deals.”
“E-commerce is on the rise and popular among women in the Kingdom, mainly because it is convenient. There is no need for standing in queues or being placed on hold forever,” said Areej Al-Hetawy. “The deals on MarkaVIP are so tempting that when I started to cross my limit my husband had to take care of the monthly budget,” she added.
Al-Hetawy said that although these websites are tempting and affect the monthly budget, they also offer great discounts that you do not find in stores. “We are all aware that the Saudi society is very fond of luxury brands and are attracted to these promotional websites offering great discount deals. I believe it is fast becoming a culture.”
“Well, there are always two sides to a story, so if you see things from my perspective, it is totally the other way around,” said Nida Khan, Admin Manager at 3lamodak, one of the biggest daily-deals website in the Kingdom offering huge discounts in many fields.
“I think that through online shopping people get to purchase stuff in the comfort of their home environment,” said Khan. “Moreover, as we offer discounts on our website, people get more value for their money which actually leaves them with more money to spend. So, in short you can spend less than the budgeted amount by purchasing products and services through our website,” she added.
Khan said that the number of Saudi consumers willing to make online purchases is on the increase.
“About 39 percent of Internet users or approximately 3 million people were buying products and services online in 2011. And with the rise of new e-commerce options, this number has risen to 7.8 million in 2014.”
She added that the number is likely to rise even more quickly in the near future. “Unfortunately, we are still at the beginning but I definitely see a light at the end of the tunnel. There’s still public distrust toward online payment and low public awareness but things will look up in the coming years.”
Despite the challenges facing Saudi entrepreneurs, a recent study shows that the Kingdom actually has a huge potential for e-commerce start ups. Saudi Arabia offers a greater opportunity for new e-commerce companies today. The Kingdom is known to have the most number of individuals among other Arab countries to buy products online, invest in stocks, and pay bills online at least once a day.
Khan explains that the kingdom also has a supportive online payment infrastructure — one of the most open in the region — that supports a range of payment gateways operating in the region, including PayPal, Skrill, CashU, Gate2Play, Cashi and others. “Saudi Arabia has the second highest rate of credit card usage and the second lowest rate of users afraid to use their credit cards online,” she said.
“I believe the economy is still in a pretty rough shape, but it’s better than it was a year or two ago, and that’s great news,” said Khan. “It’s about time to enter the market and take advantage of a fast growing customer base and easy online payment opportunity.”
Ahmed Balkis, Co-founder and CEO of 3lamodak said that the prices of the products and services are going to reduce in future as more and more companies today are planning to offer online shopping instead, which will reduce their cost of production, leading to lowering prices. “So basically, it’s going to be a win-win situation for both the merchants and customers.”
According to previous Saudi Post sources, the kingdom’s E-commerce market share is expected to hit SR 50 billion by 2015. About 1 in 4 Saudi Internet users are already active in e-commerce, and they visit about 70 million e-commerce pages per month.
E-commerce affecting monthly budget, say Saudi online shoppers
