E-Commerce in Saudi Arabia
by: Saltan Alhammas
One of the most profound changes currently transpiring in the world of business is the introduction of Electronic Commerce (E-Commerce). The impact of E-Commerce on procurement, shopping, business collaboration, and customer services as well as on delivery of various services is so dramatic that almost every organization is affected. Besides, as E-Commerce is changing all business’ functional areas and their important tasks, ranging from advertising to paying bills, the nature of competition has also changed due to new online companies, new business models and the diversity of E-Commerce related products and services. This objective of this paper is to find out the current situation of E-Commerce in Saudi Arabia and to analyze the E-Payment system in Saudi Arabia, global barriers in effecting E-Payment system for E-Commerce. Before analyzing the current situation of E-Commerce in Saudi Arabia, I would like to give a brief summary about the political, economic, social and technological environment of Saudi Arabia.
Saudi Arabia has an oil based economy with strong government controls over major economic activities. It possesses more than 20% of the world’s proven petroleum reserves. It not only ranks as the largest exporter of petroleum, but also plays a leading role in OPEC. The petroleum sector accounts for roughly 75% of budget revenues, 45% of GDP, and 90% of export earnings. It is believed that about 40% of GDP comes from the private sector and roughly 5.5 million foreign workers play an important role in the Saudi economy, particularly in the oil and service sectors.
Saudi Arabia’s unemployment is high, and the large youth population generally lacks the education and technical skills the private sector needs. As part of its effort to attract foreign investment and diversify the economy, Saudi Arabia acceded to the WTO in December 2005 after many years of negotiations. The government has...