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Starting an Online Business in Saudi Arabia

Strategy 2023: How to Start an Online Business in Saudi Arabia The Saudi E-Commerce Dream

Time moves quickly in this crazy digital world and Online Business trends are travelling at rocket speed.

If you are looking for an exciting, diverse marketplace with a large internet savvy audience with impressive disposable incomes … look no further.

Online Local and global business is thriving in the Kingdom of Saudi Arabia (KSA).

2023 Buyers and Sellers know we are all free to sell or shop ANYTIME of the day or night and ANYWHERE, in a cafe, in a queue, waiting for a bus, in waiting rooms …

If you are Looking for an SEO Services in Saudi Arabia then SEO Company Pro is the solution. Offering Digital Marketing Services in Saudi Arabia in both Arabic and English.

 

ONLINE HAPPENINGS IN SAUDI ARABIA

Many global companies noticed the shift towards Online Business in Saudi. Western Union and Amazon were very quick to take advantage of this opportunity. 


Trending Online Business opportunities in Saudi Arabia attracted fashionable global companies including Shein Fashion, iHerb, H&M and Panda.

Both LEGO and Hugo Boss also expanded their online presence to include stores in Saudi Arabia and the United Arab Emirates.

Imagine being able to pay for your advertising later!

Revenue based financing companies, with an eye on the new behaviours of MENA consumers and increased Online Business opportunities, have also been positioning themselves to support those with limited access to finances. Especially in relation to ending late payment cycles and access to working capital.

How do I set up an Online Business in Saudi Arabia?


Ecommerce laws were modernised in 2019 and 2020 in order to make setting up an online business easier in Saudi Arabia.

How do I start an e-commerce store in KSA?

Local and foreign online business are welcome, and strategies that make the process easier for everyone to engage with are a part of the Saudi globalised vision to attract new business.

1. Draw up a business plan

Do some research. Get to know the sector you want to move into. You will find resources on LinkedIn, Twitter, YouTube and normal searches. Social Media is surprisingly useful for finding out what is happening, often announcing newly released reports, surveys, and regional trade conferences etc. 
 


Take note of the techniques advertisers use when promoting themselves to the Saudi marketplace.

Are they same as those you use in the culture you are most familiar with? 


Consider the legal requirements.

Find good legal representation to help you navigate asset protections and tax regulations. 


Outline the type of business activity you will offer: product, service etc. Make sure you list ALL the products or services your Online Business will offer to avoid having to either add others or re-negotiate others at a later date. 


2. Register your business ( in Saudi Arabia)

If you want to start a business in Saudi Arabia Please consider enlisting the support of a culturally aware Business Advisor / Guide, as the registration process and system of permissions needed can be complicated and vary according to the type of online business you set up. It is important to have solid legal advice.

The Saudi Ministry of commerce will also guide you through the process of registering your Online Business etc.

It is worth mentioning an organisation called Monsha’at, an organisation established in Saudi Arabia that is described as a “pillar of entrepreneurship.” The purpose of Monsha’at is to support programs and projects in order to build a culture of initiative and innovation. You may decide registering with this organisation is beneficial for your ventures. Their website is written in Arabic and English.

3. Register your domain name ( Starting a business in Saudi Arabia will must be arabized and will have .sa )

Choose a name that represents your online presence well and apply through a registered provider.

It is probably advisable to think of a few preferred names in case your first choice is taken.

Saudi Arabian domains end in .sa

4. Create your Website
 


To Note :

  • Are transactions protected from fraud?
  • Are the private details of customers protected?
  • Is my site secure? Do you have an SSL Certificate installed?

Potentially useful features:

  • Abandoned cart recovery – reminding customers of previous browsing activity
  • Wishlist – reminding customers of items previously researched.
  • Incentives – offer coupons, discounts, other products, bundles
  • Product recommendations – offer more choice
  • Frequently Asked Questions (FAQs)
  • Chat option
  • Share links 


Special Notes:

  • Your company is legally bound to protect the private information of customers from third part access. 

  • Customer information can only be held during a transaction.

  • If your system happened to be hacked you are required to report this incident to Ministry of Commerce and Industry as soon as possible – no longer than three days.

  • Businesses that do not comply with regulations can be banned and fined.

  • Research the Permissions and Licences needed
 

  • There are a fair number of necessary licences and you will need to research these: 

  • A licence to conduct business in Saudi Arabia is provided by the Ministry of Investment (MISA). 

  • Fully foreign-owned businesses would need an Investor Licence from MISA.

Commercial Registration Certificates care issued by the Ministry of Commerce and Industry

An Advisor can guide you through the various cultural expectations and systems. 


Apart from design and a user friendly interface it is important to focus on safety.

The Saudi method of doing business considers the rights of seller and buyer. They expect customers to be looked after and their rights respected. Return policies and the right to reject advertisements are a must. 


The Saudi Arabian government requires you to have a physical address even if you have an Online Business.

Research the best available payment methods. Considerations include: 


  • Local currency payments • Seamless transactions
  • Easy refunds
  • Part payment options
  • Popularity
  • New and upcoming payment technology
  • National and global payment options / payments by region

Research the best available delivery / shipping options

  • Understand regional shipping zones.
  • Understand who the key local and international shipping companies are
  • Understand which shipping companies are most efficient / cost effective for the various routes.
  • Is your e-commerce site set up to integrate with different shipping companies and

Streamline both packing and shipping? 


Cultural differences worth noting

  • The weekend in Saudi Arabia is Thursday and Friday

  • Times is less rigid in the Middle East than it is in the West. It is important to turn up for a meeting on time but also to know that you may have to wait a while once there. 

  • Never shame or embarrass your host in public.

If something someone says needs to be corrected then that should not come in the form of public criticism. Saudi society operates on a system of honour called Sharaf which westerners may understand as personal dignity and an attack on a person’s honour can be an attack on their family honour in certain circumstances.

Patience and self-control are considered important to dignity and so is reputation. Praise is given freely and openly but criticism is usually private and given carefully.

  • Criticisms of your proposals or ideas are given from a constructive perspective.
  • You will need to be careful in the way you discern your interactions, especially if coming from a Western culture. Saudis are straight talkers and your cultural mindset might interpret their comments as argumentative. In fact they enjoy debate and the process of shaping an idea. In a cross-cultural setting all attendees need to be careful how they judge each other’s comments. What may seem forceful to one may simply be conversational to another.
  • Saudi people pray five times a day.
  • Newspapers list these times daily. Foreigners are not required to pray with them at these times but it is important to understand their schedule as meetings and conversations will be paused or interrupted. 

  • If it is your first time entering a meeting room full of people you should shake hands with the men moving from right to left.
  • You would not shake hands with the women.
  • In fact it is worth noting that a Western woman would not be permitted to organise a meeting with a Saudi businessman unless she had a male counterpart with her.
  • A meeting would rarely have a formal agenda and will most likely be loosely structured.
  • They may well feature only small talk initially and discussion of matters related to the reason for the meeting may be spread over a few gatherings.
  • Hospitality is important to the Saudi Arabian culture and your host will most likely supply a generous serving of tea, coffee and cakes.

  • It is important to go with the flow, to leave your task oriented hat at the door and squash any frustration this might create. Saudi businessmen won’t be rushed or pressured.
  • They prefer to know the person they are talking to and to make careful and informed decisions. 

  • Back up your promises with evidence. Evidence speaks more than excited exaggeration.

  • If you hand out business cards (optional), hand them over with your right hand. 

  • It is worth staying up to-date with the timing of special feast / fast / prayer times.
  • The month of Ramadan for example is an important period in the Islamic calendar and business activities slow down to minimal service or in some cases are non-existent. The time of Ramadan changes slightly every year but you can find the dates online.

  • During Ramadan people fast for a set portion of each day and it is Westerners are required to be sensitive to their religious observance during this time, especially not eating food in front of those fasting.


To Conclude

 

  • Starting an Online Business in Saudi Arabia is a win win if you do your homework and pay attention to the finer details, especially the cultural aspect of doing business in a new nation. Win win because, Saudi Arabia wants your business to join their ever increasing e-commerce community and you are seeking a new and prosperous business venture.
  • In the beginning wading through all the regulations and permissions you are required to adhere to may be frustrating, especially if you are new to the KAS culture and dealings but the end result is well worth it.
  • Remember that KAS wants your business and has been systematically updating their processes to make everything easier for you for years.
  • Get as much advise as you possibly can and from a few sources.
  • Don’t be afraid to get a second opinion.
  • Don’t be shy to contact the relevant government offices for advice either.
  • Once you have researched as much as you can, consider check out the various business advisors.
  • If they offer e-commerce support ask them to tell you about the benefits of the payment systems they recommend.
  • Don’t take everything at face value because Fintech is advancing all the time.
  • Ask them to explain how their systems are positioned to embrace new technology and global payment breakthroughs.
  • Whenever you feel frustrated remind yourself that the e-commerce market in the Kingdom of Saudi Arabia is projected to grow phenomenally in the next three years.

Online business is already a multi-billion dollar industry and every related field of business is working to make online services, sales and communication as seamless as they possibly can.

You are looking to jump in at the perfect time.

Resources :

Hosting in Saudi Arabia : dimofinf

Big Ecommerce in Saudi Arabia : Extra.com

Most Visited ecommerce websites in Saudi Arabia : Follow the link

Vision 2030 : The Future of Doing Business in the works

 

Written by 
tikomh
Published on
March 12, 2023
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