Analysis of current situation of Saudi logistics and shopping preferences of cross-border buyers

Saudi Arabia relies on its strong purchasing power to support many Chinese cross-border e-commerce companies such as JollyChic, ForDeal, and FunMart. However, Saudi Arabia’s logistics system faces many challenges, especially in the three links of first leg, customs clearance and domestic delivery.

First leg logistics

Saudi Arabia’s first-leg logistics mainly relies on freight forwarding companies and service integration companies. The era of traditional foreign trade gave birth to a large number of traditional freight forwarding companies in the Middle East. After the rise of e-commerce, these companies also began to get involved in e-commerce logistics business. In addition, some service integration companies provide a series of services from goods receipt to last-mile delivery. Some of the links are operated by themselves, and the rest are made profitable by integrating local resources.

Puzzles of clearance

Saudi Arabia’s customs clearance process is complex and strict. There are currently two main methods of customs clearance: general trade license and express customs clearance. The former requires each order to pass SASO certification, which is suitable for large enterprises or high-value goods; the latter is more popular with small and medium-sized enterprises because it reduces financial pressure and allows frequent replenishment.

Domestic delivery

The domestic delivery link in Saudi Arabia is one of the biggest challenges facing cross-border e-commerce. This process is made extremely complicated by the fact that specific license plates are required for ground delivery. DHL is the best choice for important documents or high-value goods due to its efficient customs clearance capabilities and fast delivery speed; while SMSA is the best-known local logistics company with a wide network coverage and can even deliver goods to remote areas. .

Cross-border buyer preferences

One of the main reasons why Saudi consumers choose to shop across borders is that they have access to a wider variety of product choices. According to a research report released by Meta, clothing, electronic products, smartphone accessories, and shoes and bags are all product types that Saudi buyers are interested in. 73% of Saudi residents made a cross-border payment in the past twelve months. In addition, what Saudi buyers are most concerned about when making cross-border payments is whether the funds can arrive within 24 hours and can be operated through mobile applications.

SABER mandatory list added

In order to further ensure product quality and safety, starting from August 1, 2019, SASO has stipulated five categories including electric automatic balancing boards, front and rear side rails of trucks and trailers, degradable plastic products, batteries and paints. New products must apply for relevant certificates through the SABER system. This means that exporters need to prepare in advance to ensure that their products comply with local regulations.

Self-operated cross-border dedicated line logistics

Facing the complex logistics environment in Saudi Arabia, some logistics companies focusing on the Middle East market have emerged. For example, “China Sun” provides small parcel delivery services for e-commerce platforms such as Amazon, and also supports return processing; “Shenzhen Dazhi” is known for its extensive coverage in the Middle East and can complete delivery of goods in a short time. Each of these two companies has unique advantages that can help cross-border e-commerce companies better serve the Saudi and even the entire Middle East market.

To sum up, although the logistics environment in Saudi Arabia is complex and ever-changing, cross-border e-commerce still has opportunities in this country by in-depth understanding of local consumers’ shopping preferences and changes in government policies, and with the support of professional logistics partners. success in a market with huge potential.