The eCommerce industry in Saudi Arabia is booming. In 2017, online purchases worth USD 8mn were made on shopping websites and mobile applications. Females constitute a more significant part of the eCommerce customer base in the country at USD 1.7bn.
Don’t be surprised when the average spendings of an online shopper in Saudi Arabia reach SAR 2,405 in 15-18 months or when the number of eCommerce buyers in the country increases at a CAGR of 12.4% by 2020.
With Saudi Arabia taking pride in its higher connectivity rates, young working population, and advanced infrastructure, the day isn’t far when the country becomes the top online retailer in the Middle East.
The logistics and warehousing industry in Saudi Arabia: An overview
Currently, there are 12.94mn eCommerce shoppers in Saudi Arabia, and an additional 6.34mn users are expected to start shopping online by 2022. The statistic reveals that anywhere there are these many customers, the demand for robust logistics providers will be more.
Generally speaking, customers are picky by nature. They are spoiled for choice and have the liberty to choose the same product from five different online websites! Therefore, the delivery time plays a significant role for eCommerce businesses in engaging customers on a long-term basis.
The scenario in Saudi Arabia is no different. Since a large number of orders are placed on multiple eCommerce websites, we can’t help but wonder the state of logistics in the country.
Quite interestingly, Saudi Arabia is one of the fastest growing countries in the logistics and warehousing industry in the world and even managed to grab the 52nd spot in the World Bank Logistics ranking in 2016.
From the viewpoint of logistics, there are two types of deliveries that an eCommerce business offers:
A. Standard delivery takes about 6-7 days depending upon the pickup and drop-off location.
B. Express delivery services boast of a turnaround time of 24-72 hours depending upon the pickup and drop-off location.
In Saudi Arabia, the logistics sector has been dramatically influenced by the express facility offered by eCommerce businesses to their online shoppers.
Without further ado, let us take a look at the top three logistics service providers in the eCommerce industry in Saudi Arabia:
#1. DHL Express
In 2017, DHL Express was named the number one “Great Place To Work” in Saudi Arabia for the 4th consecutive year. The same year, the logistics company announced its plans to implement a new automated process that would enable them to process 5,000 shipments in one hour!
To stay ahead of the curve, DHL Express invested 40mn euros in building facilities across Saudi Arabia including Riyadh, Jeddah and Dammam airports apart from Dubai and Abu Dhabi in the UAE. This infrastructure allows them to have quicker transit times, and faster clearance – which majority of logistics companies don’t.
No wonder it is the number one logistics service provider in the country! Do you know that it delivers shipments from the US in less than 48 hours from the time of dispatch? It keeps itself up-to-date with the latest technologies so that the order can reach the doorstep of the customers faster.
Today, DHL Express is in a better position than most logistics service providers to supply last mile delivery and airfreight services to the customers. With a market share of around 50% of the express logistics market in the Middle East, there’s no stopping DHL from scaling up their operations exponentially.
#2. Pick Logistics
If you are looking for a logistics service provider that solely caters to eCommerce shopping marketplaces, then pay attention to PICK. Launched in 2015, the Riyadh-based company ensures the delivery of orders on time and safely through its mobile application.
The eCommerce app builder has a straight forward process of shipment and fulfillment. As soon as an eCommerce business uploads the orders to be shipped and delivered, the operations team at Pick get an alert.
The ops team then sends an SMS to the customer with a smart link for confirming the order details, including pick-up location and time. Pick sends authorized personnel to receive the order from the eCommerce company’s warehouse or gets it delivered to its warehouse.
Either way, once Pick has the order, it delivers it to the customer. The eCommerce business and its customers can track the order until the delivery has been done. Simple, isn’t it?
#3. SMSA Express
Founded in 1994, SMSA Express is a name to reckon with in the eCommerce shopping marketplace in Saudi Arabia. It offers a range of services including road, see and air freight, mailroom management, customs clearance and most importantly, eCommerce solutions.
In an effort to up-scale itself as a robust logistics services provider, it launched two initiatives Store2Door and SmartShip to enable deliveries to online Saudi shoppers from all age groups across geographies and industries.
Store2Door, for instance, has put much emphasis on its back-end logistics operations by establishing partnerships with eCommerce stores in the US. The partnership is particularly interesting as it allows the shoppers in Saudi Arabia to buy US products online, with the deliveries handled by Store2Door.
SmartShip, on the other hand, has been specifically designed for web sellers and social media trades that want customized logistics services to deliver their products to the online shoppers in the country.
Since it is targeted at bootstrapped eCommerce businesses, the logistics services offered are affordable. Currently, SmartShip is the most capable provider of logistics in the kingdom of Saudi Arabia.
Over to you
Whether the eCommerce businesses should create an online store mobile app to track their deliveries or take external help, there are ways in which logistics can be handled and made more effective. And the logistics service providers, specializing in eCommerce, in Saudi Arabia are surely doing the right way.