Technology & Platforms

Overview

By adopting new cutting-edge technologies and digital platforms, the Kingdom is rapidly progressing toward becoming a digital nation. The widespread adoption of e-commerce, artificial intelligence (AI), cloud computing and FinTech, is transforming the local market. A slew of new startups has sprung up to put these new technologies to work to meet rising customer demand, indicating that digital transformation offers significant investment opportunities for early market entrants in the technology and platforms segment.

Explore Saudi Arabia's

Technology & Platforms Sector

  • $13BN
    e-commerce market size in 2021, a 45% share of the GCC market
  • 32%
    growth of the e-commerce market from 2015 to 2020
  • $33BN
    expected FinTech transactions value by 2023
  • $20BN
    data and AI investments by 2030
  • 22%
    increase on expected cloud computing spending by 2024, reaching $6 billion
  • 300
    dedicated data and AI startups to be established by 2030

Value Proposition

An actionable strategy that is already bearing fruit

  • Saudi Arabia aims to become a global hub for data and AI, thanks to a dedicated National Data and AI Strategy.
  • The Kingdom is targeting to train 40% of its total workforce on basic data and AI literacy skills to produce at least 15,000 targeted local data and AI specialists and 5,000 experts by 2030.
  • Saudi Arabia is working to become one of the top ten countries in the Open Data Index by 2030.
  • By 2030, the Kingdom intends to have a high level of legislative maturity in the areas of data and AI
  • Saudi Arabia aims to facilitate $8 billion worth of FDI and $12 billion worth of cumulative local investments in data and AI by 2030.
  • Saudi Arabia intends to position itself among the top 20 countries for peer reviewed data and AI publications by 2030.
  • Saudi Arabia aims to establish 300 dedicated data and AI startups by 2030.

The region's largest and most lucrative e-commerce market

  • Saudi Arabia's e-commerce market is valued at $13 billion in 2021, a 45% share of the GCC market.
  • The e-commerce market grew by 32% from 2015 to 2020 and is expected to grow at 16% CAGR by 2025, reaching $21 billion. .

Attractive e-commerce investment destination

  • Strategic geographic location as a gateway to Africa, Europe, and Asia to establish fulfillment centers with the necessary infrastructure and the government's large-scale investment in mega projects.
  • Global e-commerce players have a huge opportunity to establish regional headquarters in Saudi Arabia to address GCC market demand and develop Arabic user interfaces to serve the local market.
  • With an investment of $58 million, e-commerce investor can expect to breakeven after 6 years of operation
  • By 2030, investors can generate $1.7 billion in net revenues in Saudi Arabia and an additional $600 million from the GCC while maintaining an EBITDA of 8%.

Big multinationals have already chosen Saudi Arabia

  • Amazon, the world's largest e-commerce marketplace, has been steadily expanding its presence in Saudi Arabia.
  • Amazon has announced plans to expand its storage capacity in Saudi Arabia by 89% with the addition of eleven new buildings. Amazon's storage capacity will total more than 867,000 square feet, which is more than ten football fields.
  • The expansion will also increase Amazon's area coverage in the Kingdom by 58%.

An emerging leader in cloud services

  • In 2018, the government issued a cloud computing regulatory framework, which resulted in an increase of 28% in cloud computing spending, reaching $1.7 billion in 2018 and $2 billion in 2019
  • The spending on cloud computing is expected to grow by 22% CAGR between 2021 and 2024, reaching $6 billion.

    The FinTech industry in the Kingdom is growing at a rapid rate

    • Between 2017 and 2019, the value of fintech transactions increased at a rate of over 18% each year, reaching over $20 billion in 2019.
    • Payments account for two-third of the market and almost 98% of the user base. It is followed by personal finance which comprise over 30% of the FinTech transaction values.
    • The number of payments made through SADAD has increased by a CAGR of 11% between 2016-19 to reach 270 million transactions in 2019.
    • The value of SADAD transactions has grown by a CAGR of 24% in the corresponding period to reach $119 billion
    • The number of smart phone payment transactions in Saudi Arabia increased by 352% year-on-year reaching 19.7 million in April 2020, compared to 4.4 million in April 2019
    • The FinTech market is expected to reach transaction values of over $33 billion by 2023.

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