According to data presented at the Global Retail Leaders Circle Forum, Saudi Arabia accounted for around 93% of e-commerce investment in the Gulf countries in 2025, compared with 46% in 2021. This figure reflects the level of interest in and confidence in the Saudi market, but it raises a more important question for me: Is the increase in investment alone enough to measure the sector’s success?

Especially since e-commerce still represents only around 11% of the Gulf retail sector, meaning that the market has significant room for growth. This may be precisely one of the reasons investment is being directed toward it: investors are not looking only at the current market size, but also at the scale of the opportunity it could reach in the future.

But the existence of an opportunity for growth does not necessarily mean that every investment in it will generate a successful return.

Investment Does Not Mean Immediate Profit

The entry of significant capital into the e-commerce sector helps companies expand their operations, develop their processes, and reach more customers. Financially, however, every amount invested today carries an expectation of generating a return in the future.

Investment in e-commerce is also no longer limited to establishing an online store or platform; it now includes logistics, warehouses, order fulfillment, payment systems, technology, and digital infrastructure.

This means that the sector’s growth may require substantial spending before its financial results fully emerge.

Therefore, I believe that the most important figure in the future will not simply be the amount of money that has entered the sector, but rather companies’ ability to convert these investments into sustainable revenue, profits, and cash flows.

Growth Requires Efficiency

Another indicator reflects the scale of expansion in Saudi Arabia: the number of commercial registrations linked to e-commerce rose from 40,041 in 2024 to 43,854 in 2025.

This growth means that new companies and opportunities are emerging, but it also means increased competition for the Saudi consumer. As competition intensifies, companies may have to increase spending on marketing, delivery, and promotions to attract and retain customers.

This is where the difference between growth in business volume and profitable growth becomes apparent.

A company may achieve higher sales and receive more orders, but if customer acquisition, delivery, and operating costs rise faster than revenue, this growth may not translate into a comparable increase in net profit.

For this reason, I do not believe the success of e-commerce can be measured solely by the number of stores or sales volume, but rather by companies’ efficiency in managing costs and generating value from every riyal they invest.

Where Is the Capital Going?

There is another aspect I consider important: how companies use the capital they raise.

If a company uses its capital to develop systems that reduce order fulfillment costs, improve logistics services, or increase warehouse efficiency, this may eventually improve its margins and cash flows.

Rapid expansion without a clear return, on the other hand, may lead to revenue growth while the need for additional funding persists.

The question, then, is not only how much capital the company has been able to attract, but also how efficiently it has used it.

What Does the Accountant See?

An investor may see 93% and consider it direct evidence of the market’s success, but an accountant looks at the next stage: What happened to the money after it was invested?

Did it contribute to increasing revenue? Was it converted into cash flows? Were companies able to control their costs? And was the return on investment appropriate relative to the amount of capital deployed?

In my view, Saudi Arabia’s attainment of such a large share of e-commerce investment represents a strong opportunity and reflects the market’s appeal, but the real test begins after the money enters the market.

Investment shows the level of confidence in the future, while the financial statements will later show whether that confidence has turned into real value.

Therefore, the more important question may not be: How much investment has Saudi Arabia attracted? but rather: How much economic value will these investments generate in the future?