This article presents findings from a study examining the diffusion and adoption of e-commerce in Saudi Arabia. Although the country has the largest and fastest growing information and communication technologies (ICT) sector in the Arab region, growth in e-commerce activities has not progressed at a commensurate rate. In general, e-commerce online shopping has not kept pace with the global growth of online retailing. The authors have conducted research to identify and explore key issues that influence e-commerce in Saudi Arabia in deciding whether or not to adopt online channels. As part of a larger research project using mixed methods, this article focuses on a quantitative analysis of responses obtained from a survey of the online shopping users in Saudi Arabia.
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As part of a very robust global market space, the Middle East is also experiencing rapid growth in e-commerce (MasterCard Online Shopping, 2014; Ecommerce Show, 2016). Online sales in the Middle East hit US$7 billion in 2014, the largest single share being in the UAE at $2.3 billion, followed by Saudi Arabia at $1.5 billion, and Egypt at $1.4 billion (Payfort, 2014). Some issues known to be particular challenges for e-commerce companies in the Middle East are: fear from users on loss of control; the desire to pay cash on delivery (C.O.D.); high returns and the negative impacts on cash-flow of C.O.D.; the unwillingness or inability of women to answer the door to unrelated male delivery men (PayPal, 2013; Quartz, 2015; The Economic Times, 2015). Setup costs, deployment issues to remote locations, and natural human resistance to change (Aladwani, 2003; Albadr, 2003; MCIT, 2014) are also slowing e-commerce provision and uptake.
Various researchers have sought to understand more fully the factors influencing technology adoption. They have considered factors at the individual level (Klopping & McKinney, 2004; Pantano & Di Pietro, 2012; Susanto, 2012), the firm level (Al-Qirim, 2008; Grandon & Pearson, 2004; Wymer & Regan, 2005) and the country level (Kevin Zhu, Kraemer, & Xu, 2003; Kevin Zhu & Kraemer, 2005). Several studies have concluded that cultural conditions in a nation are important influencers. In a comparison of the organisational cultures of 40 independent nations, Hofstede (Hofstede, 1980) argues that many of the differences in management styles and organisational practices of companies throughout the world can be related to differences in the collective mental programming of people in different national cultures. Dunphy and Herbig (1995) note that existing cultural conditions always determine whether, when, how, and in what form, a new innovation will be adopted.