Saudi Ecommerce Law – Impact for Retailers

The Kingdom of Saudi Arabia (KSA) is seen as a huge growth market for Ecommerce. Many retailers are developing the capability to sell goods and services to KSA consumers using platforms like Magento.

One of the biggest barriers to growth of Ecommerce in Saudi has been consumer trust. Now a new Ecommerce Law is being discussed that is designed to protect Saudi online shoppers.

Under the new new law, it is understood that consumers will be protected by:

  • Merchants having to display terms and conditions on their website including special licenses.
  • Retailers need to display accurate pricing, product information and notify consumers of extra charges.
  • The customer must be provided with an invoice in Arabic which includes the price per item, the total price and the delivery date.

Data Security is also part of the customer protection provided by the new law.

  • Retailers will not be able to keep personal data for ‘longer than necessary’. This raised the question of whether databases will be allowed or if details would have to be deleted after the transaction had been completed and delivered.
  • Merchants will not be able to use personal data without the consent of the consumer. This is also the case for sharing customer details with third parties.

The law will also cover delivery, (goods 15 days late will need to be refunded in full), advertising and details of Merchant licenses and addresses. The Saudi Arabia Ecommerce law will be watched closely by other countries in the MENA region. Other GCC countries are expected to draft similar laws to increase the attractiveness of e-commerce in the region and build consumer trust.
Penalties for companies not complying with the law will include warnings and a fine of 1,000,000 riyals. It is understood that the ministry will also block offenders from the internet and use a marketing campaign to promote the law. More information can be found at the KSA Ministry of Commerce and Industry (Arabic). Redbox Digital is advising several large merchants in Saudi Arabia on Ecommerce strategy and creating Enterprise level web-stores to help retailers capture their share of the market in KSA. Contact our GCC team for more information.