Market Trends of Saudi Arabia Third-Party Logistics (3PL) Industry
This section covers the major market trends shaping the Saudi Arabia 3PL Market according to our research experts:
Growth in E-Commerce boosting the demand for 3PL services
The expansion in the e-commerce business drove the growth of the 3PL market in Saudi Arabia. COVID-19 lockdown measures had a significant impact on e-commerce in 2021. Despite the fact that sales were already strong throughout the review period, limits and curfews prompted most businesses to shift from in-store to e-commerce in order to offset losses (due to the absence of in-store shopping). With the expansion of the supply chain and the emergence of new technologies, new businesses have evolved, and existing businesses have grown even more.
Saudi Arabia has the largest population in the GCC, with a tech-savvy and growing young population, which makes it a key market player in the region. In 2021, around 90 percent of the population had internet access. These factors eased e-commerce adoption among the population, with around 80 percent of active internet users in Saudi Arabia engaging in online shopping, which is the same share as in China. Thus, Saudi Arabia's e-commerce market is one of the largest across the region and it is expected to continue growing. While the COVID-19 pandemic has shaken businesses around the world, e-commerce witnessed immense growth. Saudi Arabia was no exception to this general trend.
Drop in Trade Balance of Saudi Arabia
Saudi Arabia's positive trade balance fell during the economic downturn, recovered, but has declined in recent years. This is most likely attributable to a drop in export revenue due to lower crude oil prices in the region. This has had an impact on the economy, and the national debt is anticipated to rise as a result.
Saudi Arabia, as a significant oil producer and exporter, must manage international ties relating to the export of its most valuable resource while also maintaining regional peace. The country has been successful in doing so for the most part. Saudi Arabia's most major export partners are China, the United States, Japan, South Korea, India, and Singapore, all of which have large oil reserves around the area. Saudi Arabia is one of the most important players in the Muslim and Arab worlds, as one of the world's major oil producers and one of the world's wealthiest countries. Saudi Arabia exported items valued over USD 238.6 billion in 2021. In 2020, Saudi Arabia's trade balance surplus amounted to approximately USD 40.74 billion.
