The buying or selling of good is referred to as E-commerce which stands for electronic commerce or EC. It is the transferring of data or funds over an electronic network mainly the internet. These transactions take place between consumer to business, consumer to consumer, business to business or business to consumer.
Saudi e-commerce industry
Various applications are used such as Electronic Data Interchange (EDI), File transfer Protocol (FTP), email, online catalogs, fax, shopping carts and Web services in conducting E-commerce. Generally, this service is used between business to business and some sectors use email and fax to promote their products to the consumers and other business prospects. Now a day, businesses are also sending out e-newsletters to subscribers.
E-commerce has a lot of benefits such as it is available round the clock, accessibility speed is very fast and the selection of goods and services can be done by global audience. Although, it has become the order of the day to purchase goods online but it comes with some minor drawbacks as well. The customer is not physically able to see or touch a particular product before purchasing it. Also, in some cases the customers have to wait for product shipping time.
The business owners should ensure security, effectiveness and privacy of e-commerce. They must authenticate business transactions and they should give control access to resources like web pages for selected or registered users. They should also implement security technologies like Secure Sockets Layer (SSL) and encrypt communications in order to ensure overall security.
The e-commerce industry has taken Saudi Arabia by storm since it’s launched. According to a latest research, the market share in Saudi Arabia for e-commerce industry is expected to reach a whopping $13.2 billion in 2015. Pixheart has suggested that the profits will come from 25 percent of Saudi internet users who are already active in e-commerce.
A recent research suggests that if any country does a total of 8.5 % retails online then it is considered to be a developed online retail market. Germany’s online retail market accounts for 11.6 % where as Australia stands at 8.7 %.
In recent times, Saudi Arabia is getting very closer to this target. The kingdom’s online retail market is expected to reach 8 % in 2015. It is leaving behind France (6.2%), Japan (6.7) and the US (7.3). The prominent language in the e-commerce space is Arabic in Saudi Arabia. 40 % of online consumers are from Makkah province while 57% from Riyadh. The study also reveals that 80% of online customers prefer to use cash on delivery (COD) as the payment method. Most of the goods purchased come under electronics category. Among other leading categories for departmental stores, financial services, fashion retails followed by airline tickets transactions.
Latest analysis by Visa has shown that Saudi Arabia has topped the MENA’s region in highest e-commerce growth rate in the year 2014. The electronic payments network’s study shows that the kingdom witnessed an estimated 41 % overall e-commerce growth compared to 2012 and 2013 data. The domestic sector has witnessed a growth of 65% whereas the cross border e-commerce has registered up to 34% growth rate respectively.
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