Is there a competitive relationship between the Saudi e-commerce market and Dubai? In terms of market size, both hold significant positions. Saudi is the largest e-commerce market in the Gulf region, accounting for 40% of the Gulf market share. Its e-commerce market size is projected to exceed $12 billion by 2025.
The UAE, where Dubai is located, has the highest e-commerce penetration rate, with 80% of the population accustomed to online shopping. Its e-commerce market size is expected to reach $8 billion by 2025. Both regions exhibit strong competitiveness in market size and consumer purchasing power, making them highly attractive to cross-border e-commerce enterprises.
Regarding platform competition, Amazon Middle East has a presence in both Saudi and the UAE. It dominates the UAE market, with a Prime membership penetration rate of 33%. In Saudi, however, it competes head-to-head with the local platform Noon, forming a "two-horse race" where together they hold over 50% of the market share. Additionally, Chinese platforms like SHEIN are also expanding their operations in both Saudi and the UAE, with rapid growth. For instance, SHEIN is one of the most visited fashion shopping websites in Saudi Arabia. This creates competition between the two regions in attracting e-commerce platforms and merchant resources.
In terms of logistics, Dubai holds a clear advantage. Dubai Airport offers efficient connectivity with seaports, and local deliveries are typically completed within 48 hours. Chinese brands can establish storage centers in free trade zones, and several Chinese logistics providers have already set up operations there. In contrast, domestic delivery in Saudi faces challenges due to an underdeveloped address system, requiring cooperation with local logistics providers to optimize the "last-mile" delivery. This results in relatively higher logistics costs and difficulties. However, Saudi is continuously improving its logistics infrastructure to enhance its competitiveness.
On the policy front, setting up a company in Dubai's free trade zones is straightforward, taking only 3-5 working days, with low minimum capital requirements and no need for a local sponsor. Under Saudi's "Vision 2030" initiative, by 2025, foreign investors will be allowed 100% ownership in sectors such as retail, logistics, and technology. Additionally, the retail value-added tax refund policy has reduced the costs of cross-border trade. Both regions are leveraging their policy advantages to attract cross-border e-commerce companies, but their policy focuses differ. Companies will choose the location that better suits their needs and business characteristics.
Ontask Express focuses on the Saudi special line, providing customers with efficient and reliable Saudi cargo, with a focus on the Middle East region. With overseas warehouses in Jeddah and Riyadh, along with a self-managed Chinese delivery team, we empower Chinese products to go global and benefit all humanity!