The Saudi ICT Market and E‐Commerce Potential

Agenda The Saudi ICT Market Saudi Ecommerce and Potential Saudi Vs UK in numbers Facts on Saudi Internet and mobile penetration Smart Phone Penetration ICT Market Size Saudi Ecommerce and Potential Saudis on Social networks Saudi Retail Market Size Ecommerce Market Size and Trends Market Players Challenges and opportunities

The Saudi ICT Market 

Saudi Arabia Vs UK in Numbers Area 2.15 trillion m² 243.6 billion m² Population 28.8 Million 64.1 Million GDP $748 Billion $2.68 Trillion Median Age 26 years old 40.3 years old Internet users 63.7% 91.6% Mobile Penetration 179.5 % 123.5 %

More on Saudi Arabia Among the twenty most important industrial and emerging countries (G-20). Main member of OPEC, having largest conventional oil reserves worldwide, (260 billion barrels) 18% of the world's petroleum reserves. No Sales Tax, No Income Tax. 150 k students studying abroad on gov. scholarships. One of the lowest countries globally in Debt and highest National Reserves and Forex Reseves.

Internet and Mobile Penetration in Saudi from total subscribers in Saudi 48% are Mobile Data Subscribers Source : ITU-D : ICT Data and Statistics (IDS) 2014

High Smart Phone Penetration (2013) Source : Google’s Our Mobile Planet

~$ 30 Billion ICT Spending annually ICT Spending in Saudi Arabia by Technology, 2014 (Total = USD 29.86 Billion) ICT Investments in Saudi Arabia by Industry Vertical, 2014 (Total = USD 4.75 Billion) Source: Saudi Communications and Information Technology Commission (CITC) ITC Report 2015

~ $14 Billion IT Spending Growth 2014-18 (CAGR) Source:

The Saudi E‐Commerce & Potential

Saudis on Social Networks Saudi has the highest penetration of Twitter in the world. 47% of the tweets in the Arab world are produced in or by Saudis, despite its small population

Saudis on Social Networks As per Google : Saudi Arabia is "the biggest user of YouTube per capita in the world" Speed of adaptation of Social network is Remarkable Oversharing ! Local Social “Celebrities” ! Speed of Word of Mouth ! Powered by a Social culture

Saudi Retail Market Size Saudi Retail Market is $120b* 11% annual growth ** (GCC growth 6% avg) 54% of GCC Retail Market ** “Solid Growth & Untapped Potential” ** Consumer Goods 32% of retail** Sources: * Alpen Capital Report 2013, ** AT Kearny’s Global Retailers 2013

Ecommerce Market Size in Saudi 2011: $3b, 2.9% of Retail* 2016: $15b, 8% of Retail* Sources: *BCG G20 Report 2012, ** RetailMeNot Online Retail Study 2014

B2C Ecommerce in Saudi 10 m Users growing to 17 m by 2020 2015 : $604 average revenue per user (ARPU)

Ecommerce Players in Saudi 1 www.Souq.com www.Namshi.com www.MarkaVIP.com www.mumzworld.com ‪www.vanillaeshop.com www.iPhady.com

Ecommerce Players in Saudi 2

Ecommerce Players in Saudi 3

Challenges & Opportunities : Payment ~ 80% of Ecommerce in Saudi is Cash on Delivery. Debt cards can not be used online. Paypal not Popular. Bank transfers is common. Local payment providers e.g. “OneCard” cant do Ecommerce. 80% of Saudis have bank accounts. Gov. Launched recently SADAD OLP, a Platform connecting all Saudi banks with Ecommerce Sites’ check out pages.

Challenges & Opportunities : Delivery Big logistics companies are Expensive and slow. And do not offer Cash on Delevery. Problems with Labor. Non unified Addresses. Growing percentage of Returns. Demand concentrated in few big cities. Pickup is popular. Social use freelancers, and New “Uber” like solutions emerging.

Challenges & Opportunities : Other Legal and Taxation : Not easy for non Saudis. Tax on non Saudis. Culture : No research available on Taste, preferences or behaviors. Need to experiment with taste & have a Local team. Need to experiment with Marketing, especially Social.

Opportunities Delivery and pickup innovation Managing Returns Partnerships with Local Players Start online and go offline Platforms Social and mobile commerce and comparison engines Big investments

Saudi Ecommerce Opportunities Ecommerce in Saudi is still a Blue Ocean with lots of opportunities

Thank You Rashid AlBallaa rb@N2V.com @Rballaa Hashim AlAwadi  halawadi@techinvestcom.com