E-commerce platforms

INVESTMENT OPPORTUNITY
ICT
 ICT
E-commerce platforms
OPPORTUNITY’S DESCRIPTION: Develop e-commerce platforms to aggregate and sell products and services in KSA, across different sectors

DEMAND INVESTMENT OVERVIEW

INVESTMENT HIGHLIGHTS VALUE PROPOSITION
KSA Market size, SAR Bn – Large and fast-growing local market with
– Opportunity to consider different operating models -
FDI with 100% ownership or joint venture with local opportunities in various high potential segments in
private sector player(s) the Kingdom including Healthcare, Education,
40.6 Mobility
– EBITDA of ~ 8% is expected by 2033
21.1 – Proven potential to further expand activities and
– IRR of 21% is expected within KSA export in the MENA region
10.8
– Expected investment size is 8Bn SAR – Government institutions that provide numerous
2023 2028 2033 enablers and infrastructure to support the growth

KEY DEMAND DRIVERS
– Large young tech-savvy population leading the
adoption of online on-demand transactions and
increased internet penetration
– Strong growth of adjacent sectors with
companies looking for services convenience
– Strong support by government to digitize
strategic sector services, e.g., healthcare
– Gradual increase in the adoption of advanced
payment methods
MARKET OVERVIEW
MARKET READINESS AND COMPETITOR
ANALYSIS
– The market surpassed the “nascent” stage and has now entered the
“growth” stage where focused government intervention is needed to
further accelerate
– Comparing KSA to other countries confirms the potential; strong
fundamentals already in place to support future growth, with
multiple efforts already launched to advance the ecosystem
GLOBAL TRENDS
– The e-commerce platforms market is
expected to reach SAR 9.1 Tn by 2028,
growing by 17% annually, with retail the
largest industry(~33%) and B2C the large
type (79%)
– Several drivers are enabling the growth of
the industry including increased internet
penetration, higher consumer
convenience, adoption of data analytics,
government support, and growth of
freelance economy

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 ICT
E-commerce platforms
ENABLING
SUPPLY
FACTORS
SCALABILITY AND LOCALIZATION ENABLERS
– Players in KSA have a strong potential to further grow in the MENA region – HRDF offers salaries support for KSA nationals
– Multiple MENA E-commerce platforms have been able to expand from their launch country and conquer considerable – SEDA providing refund on percentage of fees incurred
Market share outside the country: Careem expanded in 14+ Mena countries, Talabat covers over 450 areas in the MENA during export activities
region, Swvl is expected to expand to 20 countries by 2025, etc. – CITC developed a new regulatory sandbox for delivery
platforms to enable fast-paced growth of the sector

ECOSYSTEM ANALYSIS

COST OF DOING BUSINESS IN KSA

– E-commerce platforms are used across wide range of sectors (e.g., retail, accommodation, healthcare, agricultural/food, etc.);
such sectors need to be well established and ready to adopt new emerging technology Factor Ranking Am ongst Regional Peers
– Several national efforts and regulations are being / have been promulgated to increase confidence in e -commerce and boost
the industry in the Kingdom ICT access index1
(1-10, 2020) 8.0

ICT use index2

Opportunity Focus
(1-6, 2021) 3.64

E-commerce platforms
Service/good provider End user ICT Spend3 (%
developer GDP, 2022)
3.8

R&D index4 448

(Count, 2022)
KEY STAKEHOLDERS
Patent applications
(#/GDP, 2020) 1.38

1. World bank ICT access index; 2. GCC ICT use Index 2021; 3. Country spend on ICT as % of GDP- VIsio2030; 4. Nature Scientific Index; 5. Number of patent applications by Bottom Top Top Top 3
KSA residents as percent of GDP at constant PPP- WIPO; Source: Kearney 25% 75% 50% 25%
DEFINITIONS
# SCORECARD SECTION
1 Market size
2 Business drivers
3 Investment highlights
4 Value proposition
5 Market readiness
6 Global trends
7 Scalability and localization
8 Import dependency
9 Value chain analysis
10 Key stakeholders
11 Enablers
12 Cost of doing business in KSA
DEFINITIONS
Size of market in value/volume in KSA and/or Region (MENA/GCC) covering future projections based on available estimates
from published /government sources
A select number of factors that will influence future demand for the related product/service
An overview of key financial metrics summarizing the investment opportunity along with the expected return based on the
suggested investment size
Summary of key differentiators that position KSA as a strategic choice over other regional/global peers
An overview of KSA market structure, market maturity and level of participation by local and global players
Latest business developments within the sector/product category
Ease of scaling the business across the value chain or into new adjacent products or geographies that would maximize the
opportunity’s investment returns and the ability and potential to locally manufacture the product and its components
An overview of the countries from which Saudi Arabia is importing the product and their value/volume and share in total
imports
The process or activities that would potentially need to be carried out to deliver the underlying product or service
Government institutions, organizations, and/or authorities that participate or influence the market for the underlying
product/service
Factors that enable investment in the underlying opportunity
Key factors that position KSA as a competitive destination for investment in the region. Productivity adjusted wages do not
include cost of $1.23/hour towards annual recurring charges including work permit, resident identity (iqama) and health
insurance
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