Consumers in Saudi Arabia continue to adopt online shopping. This means that more products than ever are delivered to end consumers (i.e., last-mile logistics). With the delivery driver now the only physical touchpoint with consumers, this segment is both critical and fast-growing.
With the need for the last mile continuing to accelerate, the industry is facing scaling challenges around efficiency, quality of delivery, and reliability to name a few. Local startups are now emerging to address these unique challenges.
Innovators such as Salasa, Sirdab, Nawel, OTO, and RedBox are at the forefront, working to streamline and optimize online retail logistics. Their focus on overcoming the complexities of last-mile delivery is crucial in meeting the increasing expectations of Saudi Arabia’s online shoppers.
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The demand for retail logistics will become increasingly critical as KSA’s online retail market is expected to see an accelerated growth rate (3x of offline retail)
The KSA retail market, valued at SAR ~500 Bn in 2024, is projected to reach ~SAR 750 Bn by 2030, with online retail comprising ~20% of the total. Fueled by a developing enabler ecosystem and increasing demand for convenience by consumers, the growth for the online retail market is expected to be significantly higher. This rapid growth will translate to an expansion in the online last-mile planning market. This is because the needs of the online logistics market are different and thereby the “last mile” part of the logistics value chain becomes critical and sizable—something that is absent in the offline logistics value chain.
At present, the online retail logistics market is valued at SAR ~7 Bn expected to grow to SAR ~50 Bn by 2030
The retail logistics market in Saudi Arabia, accounting for 6% of the total retail market, is valued at SAR ~33 billion. However, logistics costs for online retail are notably higher, around 10% of the total market. This discrepancy highlights inefficiencies within the logistics value chain that need addressing.
In response to these challenges, a new wave of startups is emerging within the KSA logistics ecosystem, aiming to streamline and enhance online retail logistics. Companies such as Salasa, Sirdab, Nawel, OTO and RedBox are leading the way in tackling these inefficiencies.
By focusing on the complexities of last-mile delivery, these innovators are working to meet the growing expectations of online shoppers in Saudi Arabia, ensuring timely and efficient delivery services in a rapidly evolving market.
We anticipate the retail logistics market to cross ~SAR 50 Bn, with the online logistics market projected to account for ~SAR 14 Bn by 2030. The market is expected to rise in the coming years due to the rapid growth of e-commerce, government initiatives to diversify the economy under Vision 2030, and significant investments in logistics infrastructure. The increasing urbanization, higher consumer spending, and the push for digital transformation will drive the demand for efficient supply chain solutions.
