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RIYADH: ��������’s consumer retail spending is projected to experience significant growth in the coming years, with e-commerce expected to account for 46 percent of the overall retail sector by 2030, according to a Visa executive.

Speaking to Arab News at the Retail Leaders Circle in Riyadh on Feb. 4, Ali Bailoun, regional general manager of Visa, highlighted that �������� currently represents 44 percent of the total retail spending in the Gulf Cooperation Council region.

Bailoun’s remarks reflect ��������’s ongoing shift toward a more diversified, digitally-driven economy, where e-commerce plays a pivotal role.

E-commerce in ��������

Earlier this month, data from the Ministry of Commerce revealed that ��������’s e-commerce sector continues to show strong growth. As of the fourth quarter of 2024, the Kingdom now has 40,953 registered e-commerce businesses, marking a 10 percent year-on-year increase.

“In line with Vision 2030, we see Saudi growing or doubling the payment volume by 2030. Even if you look at e-commerce, we expect e-commerce to grow to 46 percent by 2030. So, we see growth and we see potential. And you can see this on the ground,” said Bailoun. 

He added: “Today, you can go anywhere in ��������, and you can use your card and make any payments in any retail shop.” 

Bailoun noted that e-commerce in �������� currently accounts for 29 percent of all consumer retail payments in 2024, and is projected to rise to 46 percent by the end of this decade.

He also highlighted that cross-border transactions represent 15 percent of consumer retail payments in �������� for 2024.

Supporting these insights, a September 2024 report from ��������’s Small and Medium Enterprises Authority indicated that the Kingdom’s retail sector is poised to double between 2020 and 2025, with an annual compound growth rate of 15 percent.

Furthermore, a December report from Statista projected that credit card penetration in �������� will reach 46.83 percent, continuing a trend of growth observed over the past 15 years.

Technological advancements

Bailoun suggested that data should be used wisely by retailers to enhance the growth of cross-border business. 

“My recommendation always to retailers is data. You need to find a way to collect and optimize your data and then customize these solutions,” said Bailoun. 

He added: “You need to work with data, not only yourself. You need to look at the market. You need to look at the region and start building up on the data you have to customize the solutions or build up these solutions.” 

The Visa official further said that the implementation of advanced technologies like Artificial Intelligence is also crucial to elevate the growth of both physical and e-commerce retail sectors. 

“Today when you look at social media, sometimes you like something and you read more about it. Then it becomes it pops up in different areas. It is all AI,” he said. 

A recent report by market research firm IMARC echoed similar sentiments, emphasizing the growing role of technology in shaping the e-commerce retail sector.

According to the report, the increasing use of data analytics and AI algorithms to personalize shopping experiences is a key driver of the market. “The expanding use of data to recommend products based on a user’s browsing and purchase history is making it easier for customers to discover items they may be interested in,” the report stated.

IMARC also highlighted that ��������’s e-commerce market was valued at $22.9 billion in 2024, with projections indicating it will reach $708.7 billion by 2033, reflecting a compound annual growth rate of 12.8 percent.

Visa’s Saudi operations

He also talked about Visa’s close cooperation with STC Bank, which recently received a non-objection certificate from the Saudi Central Bank to commence its banking operations in the Kingdom. 

“We are a payment technology network. We work and we enable all players in the ecosystem; be it a traditional bank, digital bank, a wallet, a merchant, or maybe a telco provider. We work and we operate and enable the whole ecosystem,” said Bailoun. 

He added: “STC was a wallet. They’ve converted to become a digital bank. We’ve been working with them when they were a wallet, we will continue working with them when they become a bank again. We enable them to do payment credentials, which means they can issue a card under the Visa brand, and they go and do payments anywhere and everywhere in the world.” 

Calling �������� one of the strategic markets of Visa, Bailoun also outlined some of the major initiatives taken by the payment card services company in the Kingdom. 

In October 2024, Visa opened its fifth innovation center globally in Riyadh in the King Abdullah Financial District. 

“Today, if you have a problem statement. If you have anything you want to solve or cater for, we sit down together with many partners, we co-create and come up with a solution in that innovation center,” said Bailoun. 

He added: “In addition, we have some best practices and some experiences that we’ve taken from around the world; be it on the gaming, on AI or gen AI. We have something on urbanization. In the innovation center, we have also added something that will cater for the new cities the likes of Neom, the likes of Qiddiyah.” 

Bailoun also detailed Visa’s major partnerships in the Kingdom with retailers including Cenomi Retail and Marriot Bonvoy. 

“With Cenomi, we have signed a deal to work on two parts; the loyalty platform and we have also worked on something called co-brand. So, Cenomi will have a co-brand credit card. The more you spend on their card, the more loyalty you get, and then you can redeem within the group,” said the Visa official. 

He added: “Marriott Bonvoy is a group of hotels. It’s a loyalty platform, one of the big platforms globally. The card is issued in partnership with Visa and Bonvoy. So, the more you spend, the more you will get points to redeem in Bonvoy hotels.”