Logistics still the biggest bottleneck for ecommerce in Saudi Arabia

We all know that Ramadan and Black Friday are the two biggest ecommerce shopping events in Saudi Arabia.

With Covid-19 in the picture, this Ramadan has seen dramatic changes, and for many cross border players from China, it feels like everything is back to 2017. JollyChic had some teething cashflow issues; ForDeal failed to reach their target; only SheIn has been smooth sailing – in fact, their volume might have grown despite having to charter planes every day.

Delivery, especially last mile, has become the biggest bottleneck for many. There is an interesting article in Saudi newspaper Okaz (عكاظ‎) titled “After many complaints, is the market thirsty to increase delivery companies?“, which gave a glimpse of what happened this year. We thought it is quite comprehensive, and would like to share a summary here. You can read the original article in Arabic: https://www.okaz.com.sa/economy/na/2026081:

— — After many complaints, is the market thirsty to increase delivery companies? — — 

The Corona crisis revealed the weakness of orders delivery and shipping companies in the delivery Services during the last period, as thousands of shoppers complained about paying the value of their goods to the well-known eCommerce stores, which are registered in the Ministry of Trade or “known”, or sending products through shipping companies without their arrival to the destination chosen by the delivery companies.

With the end of Eid Al-Fitr and the absence of shipments, receivers started to ask their shippers to return the value of the goods.

In KSA, three entities participate in receiving the requests of the violating companies, represented by the Ministry of Commerce, the Communications and Information Technology Commission, and the security authorities. As a prelude to returning rights to their owners, and imposing penalties on violating companies. 

Thousands of communications

Many individuals filed complaints with the Ministry of Commerce against well-known and authorized stores to sell their products online with requests to return their paid money to those stores, after violating the date of delivery of the shipments to them, more than two months ago, since the preparations for the holy month of Ramadan and the end of Eid Al-Fitr, without Receiving shipments, especially as the e-commerce system stipulated that the product delivery time by the merchant not exceed 15 days, with the consumer having the right to recover his money after the period has passed.

BANNED two companies

The Communications and Information Technology Commission received many complaints against cargo transport companies; Because it was late in submitting orders over the set dates, in addition to announcing that two companies had stopped accepting new shipments from consumers or stores; For not being able to deliver previous shipments, and obliging them to deliver the shipments they previously had, so they would not be subject to revocation of their license.

Security intervention

The Ministry of Commerce requested that those affected by electronic stores (not known), which do not have commercial records or are not registered in “Maroof”, submit communications to the security authorities in the event of payment and did not return these collected amounts; For that process, in the event that shipments do not reach them.

Transfer requests to branches

Many well-known stores that provide their services by visiting the branches or electronically started changing the date of delivery of the products via their electronic page on the Internet, and claiming that the shipment is with the representative, but in reality the consumer cannot communicate with the number of the representative who carries the shipment, despite the company receiving the full value of the request .

While other stores resorted to canceling the order after waiting for two months or a month and a half from the owner of the request, and the stores did not transfer the delivery of orders to consumers when they came in person to the branches, on the pretext that their requests are intended for delivery and not for personal reception from the branch.

Direct and indirect losses

The investor and the owner of one of the electronic stores, Arwa Fouad, confirmed that the delivery and shipping companies brought consumers into a direct confrontation with the shop owners, which led to “direct” and “indirect” losses.

She explained that one of the direct losses is to return the money to consumers because of the lack of delivery of shipments on time, and bear the costs of return shipping again because the goods did not arrive on time, and from the indirect losses that consumers do not deal with the store due to the delay of the shipping company that the store contracted with, thinking that they Responsibility for delay lies first and foremost with the store.

It indicated that the shipping companies recorded a number of procedures in the past period, represented in imposing fees on prepaid insurance policies, on the pretext that the weight of the shipment is more than specified, by requiring the consumer to pay the shipping charges even though they are prepaid.

Ayman Asiri (shopper) considered that the shipping companies had a competitive advantage during the last period represented by the lack of road users and the ease of delivery of shipments to consumers, but the companies received shipments exceeding their capacity; What caused it to delay the receipt of orders and cancel other orders. He called for the necessity of compensating consumers who were late in receiving their orders, and not limiting them to returning amounts from non-received shipments, but rather compensating them with free products or a balance in the store.

As for the employee at one of the retail stores, Bayan Omar, she mentioned that the best way to deal with shipments as soon as possible is to contract with individual representatives and give them sums for each order separately.