Saudi e-commerce sales using Mada cards hits $5bn milestone

Mada cards are Saudi Arabia’s national payment cards, offering debit and prepaid services within the network. File
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Updated 13 December 2024
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Saudi e-commerce sales using Mada cards hits $5bn milestone

RIYADH: Saudi e-commerce sales using Mada cards reached SR18.34 billion ($4.89 billion) in October – an annual increase of around 37 percent, recent data revealed.

According to the Kingdom’s central bank, also known as SAMA, this figure includes online shopping payments, in-app purchases and e-wallets, and excludes transactions by Visa, MasterCard and other credit cards.

Mada cards are Saudi Arabia’s national payment cards, offering debit and prepaid services within the network. They use Near Field Communication for contactless payments, allowing secure transactions at retailers and online, and play a key role in supporting the country’s cashless economy.

The number of e-commerce transactions also increased by 29.3 percent on a year-on-year basis to reach around 101 million in October.

The prevalence of smartphones, with a 98 percent penetration rate according to the Kingdom’s Fashion Commission, highlights the digital readiness of Saudi consumers compared to advanced markets like the US, which has a  90 percent rate, and the UK with 80 percent.

The Kingdom’s youthful and increasingly affluent population is embracing online shopping, spurred by rising disposable incomes and growing awareness of e-commerce benefits like convenience and cost savings.

Saudi Arabia’s per capita gross domestic product is on a steady rise, with the IMF forecasting a 15.95 percent increase by 2029, reaching $38,124.66.

This growing individual income is enhancing purchasing power, spurring demand for fashion, apparel, and other consumer goods. Combined with government initiatives to promote cashless transactions and local brand development, these trends are creating ripe opportunities for e-commerce players.

Fashion’s role in e-commerce growth

According to a study by Mordor Intelligence the fashion and apparel sector is a major driver of the Saudi online retail sector.

Saudi Arabia’s fashion e-commerce market was valued at nearly $4 billion in 2023 and is expected to reach $7 billion by 2028, according to a 2024 report by the Kingdom’s Fashion Commission.

This growth is driven by increased digital exposure, evolving consumer sophistication, and strong government initiatives aimed at fostering a robust digital economy.

The Kingdom’s Fashion Commission’s 100 Saudi Brands initiative exemplifies this effort, spotlighting local designers and promoting Saudi craftsmanship on a global scale.

By addressing consumer pain points and integrating innovative technologies like virtual try-ons, fashion brands can further capitalize on this thriving market.

With a combination of local and international collaboration, the Kingdom’s fashion e-commerce sector is poised for sustained growth in the coming years.

The report highlighted that 65 percent of the population is under 40, a demographic renowned for their online shopping preferences.

These groups are among the most active online shoppers globally, turning to social media platforms and brand websites for fashion inspiration and purchases.

Adding to the allure of the Saudi market, the Kingdom is home to nearly 130,000 millionaires, a figure projected to rise to 226,000 by 2030. This affluent demographic, known for their financial confidence and affinity for luxury, is poised to increase local spending as high-end international brands expand their Saudi presence.

Notably, these high-income consumers spend significantly more than their global counterparts, with 30 percent planning to boost their expenditures, reflecting a strong appetite for premium clothing and accessories, according to the Fashion Commission.

Social media platforms, particularly Instagram and Snapchat, have emerged as critical sources of inspiration for shoppers in the Kingdom. 

The Saudi Fashion Commission noted that 50 percent to 60 percent of women use these platforms to discover new trends, while men often rely on YouTube for fashion insights.

This underscores the importance of influencer marketing and targeted digital campaigns in driving brand awareness and engagement within the Kingdom.

Transforming digital infrastructure

According to Mordor Intelligence, Saudi Arabia has invested over $24.8 billion into its digital ecosystem over the past six years, significantly enhancing internet quality and coverage.

As a regional leader, it was among the first in MENA to deploy 5G networks, with 77 percent nationwide coverage – well above global averages – and 94 percent coverage in Riyadh, cementing its position as a global frontrunner in connectivity.

Global companies are seizing opportunities in Saudi Arabia’s expanding e-commerce market.

In October, Mastercard introduced local processing for e-commerce transactions, bolstering secure and efficient payment options.

Similarly, TBS Holding announced plans to use artificial intelligence technologies to support digital transformation efforts in Saudi Arabia, reflecting the Kingdom’s broader ambitions for a thriving digital shopping ecosystem.

According to online platform Setup in Saudi, the Kingdom’s e-commerce market is led by six major players, including Noon, backed by the Public Investment Fund, Amazon, which entered via Souq.com, and Jarir Bookstores, a local retail giant with a strong online presence.

Other key companies include Namshi, which caters to regional fashion, while Extra Stores focuses on electronics and home appliances. 

AliExpress has a shrinking share as local platforms expand. These leaders exemplify the sector’s rapid growth and evolving consumer trends.

The Fashion Commission highlighted the seamless integration of digital and physical retail as the rise of e-commerce does not signify the decline of brick-and-mortar stores.

Instead, the Saudi market is embracing an omnichannel approach, where online and offline experiences converge. Approximately 75 percent of fashion-buying behavior in Saudi Arabia is influenced by digital channels.

This includes 38 percent who research online with purchases made offline and 25 percent doing pure online transactions. Challenges like uncertainty about sizing and fit remain key barriers to greater e-commerce adoption, with 40 percent of consumers citing this as a primary concern.

Key challenges for this sector as highlighted by the Fashion Commission include delivery lead times, return processes, and last-mile logistics. While 30 percent of Saudi consumers expect delivery within two to three days, this demand can only be met through local fulfillment centers.

Historically, products were shipped from the UAE or Europe, causing delays and higher costs.

To address this, initiatives like Riyadh’s Special Integrated Logistics Zone support localized operations, helping reduce delivery times. Companies like Chalhoub, Apple, and Amazon have already set up fulfillment centers, enhancing distribution efficiency. For example, Farfetch has notably improved its delivery times.

On payments, the government introduced e-payment regulations in 2018 to increase consumer trust and aims to shift 70 percent of transactions to digital methods.

Solutions like BNPL providers Tabby and Tamara, alongside mobile wallets like Apple Pay, are accelerating this transition.

The market remains fragmented, with the top three e-commerce platforms Shein, Namshi, and Centrepoint holding a combined 22 percent market share.

Luxury fashion remains underrepresented, presenting opportunities for growth as brands like Farfetch and local players like Level Shoes expand their presence.


OPEC+ moves to set 2027 production baselines

Updated 28 May 2025
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OPEC+ moves to set 2027 production baselines

RIYADH: OPEC+ announced on Wednesday that it will establish a framework to determine new oil production baselines for 2027, marking a significant step in its long-term planning, said an official statement.

The alliance — comprising the Organization of the Petroleum Exporting Countries and partners including Russia—has been negotiating revised production baselines for several years. These baselines serve as reference points from which member states adjust their output levels.

According to the statement issued following the group’s meeting, said it had tasked the OPEC Secretariat with developing a mechanism to assess each country’s maximum production capacity. These assessments will form the basis for 2027 production targets across all member nations.

Since 2022, the group has implemented three tiers of output cuts. Two remain in place through the end of 2026, while the third is being gradually phased out by eight participating countries. No changes were made to the group’s current production policy at Wednesday’s session.

Due to the sensitive nature of the discussions, all sources spoke on condition of anonymity.

The 2027 baselines, once finalized, are expected to guide production policy after the current round of cuts expires.

Oil prices, which dipped below $60 per barrel in April—the lowest level in four years—following OPEC+’s decision to accelerate May output and amid trade tensions triggered by US tariffs, have since rebounded to around $65.


Saudi Arabia launches advanced manufacturing center to boost industrial innovation

Updated 28 May 2025
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Saudi Arabia launches advanced manufacturing center to boost industrial innovation

JEDDAH: Saudi Arabia has launched the Advanced Manufacturing and Production Center, a key initiative aimed at accelerating the Kingdom’s industrial transformation through the adoption of advanced technologies and sustainable practices.

Unveiled on May 28, the center is set to play a central role in promoting efficiency, flexibility, and growth within the manufacturing sector. It will utilize technologies associated with the Fourth Industrial Revolution to localize production and enhance Saudi Arabia’s competitiveness on the global stage.

The initiative also supports strategic industries while aligning with the objectives of Saudi Vision 2030, the country’s long-term plan to diversify its economy. A major focus is encouraging private sector collaboration to speed up the integration of emerging technologies into industrial operations.

The launch supports the National Industrial Strategy, introduced in October 2022, which aims to increase the number of factories in the Kingdom to approximately 36,000 by 2035. The strategy is designed to attract investment, scale up local production, and strengthen non-oil exports.

The Ministry of Industry and Mineral Resources is overseeing several projects to advance the Kingdom’s industrial and logistical infrastructure, positioning Saudi Arabia as a key player in global manufacturing and trade.

“Adopting the latest industrial technologies raises the efficiency of our industrial sector and enhances its competitiveness regionally and globally,” said Khalil bin Ibrahim bin Salamah, deputy minister of industry and mineral resources for industrial affairs, in a post shared by the ministry on X.

In an accompanying video, the ministry reiterated the center’s significance in meeting national goals: “The Advanced Manufacturing and Production Center opens doors to industrial investment opportunities and stimulates the sector to adopt new manufacturing technologies within industrial facilities.”

The center is supported by several initiatives and programs, including the Future Factories Program, which aims to modernize 4,000 factories across the Kingdom. The FFP focuses on integrating advanced manufacturing systems to boost efficiency and build more resilient supply chains—particularly in critical sectors such as food and petrochemicals.

According to its official website, the center serves as a hub for industrial innovation, providing consultancy services, training, and technological solutions. It is dedicated to fostering sustainability and competitiveness across the manufacturing sector.

Through these efforts, the center is expected to significantly contribute to Saudi Arabia’s Vision 2030 goals by localizing high-tech capabilities, attracting investment, and advancing the industrial sector’s role in the nation’s economic diversification.


Closing Bell: Saudi main index rises to close at 11,052

Updated 28 May 2025
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Closing Bell: Saudi main index rises to close at 11,052

RIYADH: Saudi Arabia’s Tadawul All Share Index advanced on Wednesday, closing higher by 127.58 points, or 1.17 percent, to reach 11,052.76, reflecting broad market optimism.

Trading activity remained robust, with a total turnover of SR4.57 billion ($1.21 billion). Of the listed stocks, 202 posted gains while 44 declined.

The Kingdom’s parallel market, Nomu, also recorded gains, rising 340.91 points, or 1.28 percent, to close at 26,932.95. The market saw 48 advancing stocks against 34 decliners.

Meanwhile, the MSCI Tadawul 30 Index climbed 15.12 points, or 1.08 percent, ending the session at 1,413.70.

Fawaz Abdulaziz Alhokair Co. emerged as the session’s top performer, with its share price jumping 5.77 percent to SR16.50.

Ataa Educational Co. and Kingdom Holding Co. followed closely, gaining 5.46 percent and 5.22 percent to close at SR61.80 and SR8.66, respectively.

On the downside, United Carton Industries Co. registered the steepest decline, falling 4.87 percent to SR46.85. Banan Real Estate Co. dropped 2.4 percent to SR4.48, while Nama Chemicals Co. slipped 1.78 percent to SR27.55.

On the announcements front, Saudi AZM for Communication and Information Technology Co. disclosed it has submitted a request to transfer its listing to the main market.

Additionally, the initial public offering for Flynas Co. began on May 28 and will conclude on June 1. The offering is priced at SR80 per share, with a retail tranche comprising 10.25 million shares. According to a statement, BSF Capital is the lead manager.

Alkathiri Holding Co. announced that its subsidiary has signed a 50-year lease agreement valued at SR143 million with the Asir Region Municipality to develop a commercial and hospitality project in the city of Abha.

According to a statement published on the Saudi stock exchange, the project will feature a four-star hotel with a capacity of 180 keys, alongside retail and entertainment facilities. The development aims to boost tourism and enhance commercial services in the Asir region.

The lease will officially begin upon the land handover by the Investment Committee of the Asir Region Municipality.

Shares of Alkathiri Holding closed Wednesday’s trading session at SR2.06, marking a 1.96 percent gain.

In a separate disclosure, Mufeed Co. announced that its board of directors has recommended to the ordinary general assembly the transfer of its statutory reserve balance — totaling SR3.49 million, as reported in the financial statements for the year ended Dec. 31, 2024 —to retained earnings.


Saudi Arabia’s Asir region revitalizes 95% of stalled projects

Updated 28 May 2025
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Saudi Arabia’s Asir region revitalizes 95% of stalled projects

  • Asir is a vast region in the Kingdom with a population exceeding 2 million people
  • Interest from global players seeking early opportunities in the region’s evolving landscape has grown

ABHA: Saudi Arabia’s Asir region has successfully revitalized 95 percent of its previously delayed project, an important milestone that is strengthening investor confidence as the region moves forward with SR29 billion ($7.73 billion) worth of initiatives across various sectors.

In an interview with Arab News, Hashim Al-Dabbagh, CEO of Asir Region Development Authority, stated that a dedicated committee, chaired by Asir Gov. Prince Turki bin Talal, was formed several years ago to tackle long-standing investment challenges that had stalled progress in the region.

“The total number of cases that have been brought to this committee to address has been 63, all brought to the table,” Al-Dabbagh said.

He continued: “Of these 63 cases that have been brought to this committee to address and to solve, 60 cases have been solved, and three are in the pipeline right now, and they’re working on them, and they’re going to solve them relatively soon.”

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Of the 60 resolved, 57 were concluded with outcomes that satisfied investors, reflecting a resolution rate of nearly 95 percent.

“This committee and the work that they have done has created some very positive vibes across the investment ecosystem in Saudi Arabia, which you sense in this forum because there are some very large investors that are coming to Asir, some coming back to Asir which had not been interested in this region in the past,” Al-Dabbagh said.

The board operates in collaboration with various public and private entities, including ASDA, the Ministry of Investment, the Ministry of Tourism, the Tourism Development Fund, and King Khalid University, ensuring a unified approach to accelerating investor activity in the region.

This resolution mechanism plays a key role in supporting the region’s development strategy, which focuses on unlocking investment potential across various sectors.

“First of all, we have a strategy that drives everything that we are doing,” Al-Dabbagh said.

He added: “The strategy has been approved by the center of government, and it says that Asir should be a year-round preeminent destination, so already we know that we need to focus on the tourism sector and complementary and adjacent sectors to the tourism sector. That’s one, and that gives us a lot of momentum in working with the government ecosystem and the private sector.”

Al-Dabbagh emphasized that Asir is more than just a tourism destination, noting that it is a vast region in the Kingdom with a population exceeding 2 million people.

“Within the Asir Development Authority, we have a whole department called Economic Development Department, and they are working diligently this year on sectoral studies across the board.”

He added: “This includes, obviously, tourism-related sectors, but also other ones, so just as an example, we are looking at sports, we are looking at construction. We’re looking at fisheries and agriculture. We’re looking at renewable energy. We’re looking at mining among other sectors.”

The authority is also aligning its economic strategy with educational institutions to ensure the region’s workforce is equipped to meet the demands of upcoming sectors.

“We are working closely with King Khalid University, the TVTC (Technical and Vocational Training Corp.), Bishop University, and other educational institutions to align the strategies and to make sure that their graduates are able to find jobs in the opportunities that are going to be realized as we realize this strategy,” he said.

On attracting investments, Al-Dabbagh stated: “What I call the investment ecosystem in Asir, it’s the framework that we use to assess investments, is comprised of three components. The first component is the Invest in Asir committee, and that’s headed by Prince Turki in his capacity as the chairman of the Aseer Development Authority and includes all the public and private sectors.”

He explained that the region offers a compelling opportunity for early movers due to its untapped potential, strategic government backing, and the ability to enter key sectors before they reach full maturity, providing investors with a critical advantage in shaping long-term development.

“Asir relative to those mature, tourism destinations, offers relatively less mature areas, so when they’re coming in, they’re coming in early and they’re going to have a ... not a first mover advantage, but an early mover advantage compared to people that are going to see this place for five years or 10 years down the road when all these incumbents are already on the ground.”

Attracting FDIs

Foreign direct investment is also gaining momentum in Asir, with growing interest from global players seeking early opportunities in the region’s evolving landscape.

“One of the speakers in today’s forum was Fatih (who is managing partner of FTG Development), and they are looking at an investment worth billions in Asir. That is just one example, and foreign direct investors, they look for successful local investors to partner with,” Al-Dabbagh said.

He concluded: “Our doors are open. We’re very happy to meet with the investors from anywhere.”


EU lifts economic sanctions on Syria

Updated 28 May 2025
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EU lifts economic sanctions on Syria

BRUSSELS: The European Union lifted economic sanctions on Syria on Wednesday in an effort to support the country’s transition and recovery after the toppling of former president Bashar Assad.
The move follows a political agreement reached last week by EU foreign ministers to lift the sanctions.
The EU will keep sanctions related to Assad’s government and restrictions based on security grounds, while also introducing new sanctions against individuals and entities connected to a wave of violence in March, the Council said.
“The Council will continue monitoring developments on the ground and stands ready to introduce further restrictive measures against human rights violators and those fueling instability in Syria,” it added.