Opportunities and Challenges for the Electronic Commerce Deployment in Saudi Arabia

. To achieve success, it is important for businesses in Saudi Arabia to overcome challenges. The research reported in this paper shows that the most encountered challenges the development industry in Saudi Arabia is facing include: convincing decision makers, lack of EB strategies, organisational culture, ensuring customer satisfaction, international recognition, etc. This research also shows that, companies in the development industry have identified very similar challenges of EB as their counterparts in other industries in Saudi Arabia

and consumer (B2C). Although transactions among businesses represent the bulk of electronic commerce, most attention has focused on business-to-consumer in Internet sales.
The Internet is reducing transaction costs, and reducing the benefits of optimal integration and optimal size. Small firms can buy services from outside more cheaply, thus barriers to entry are falling. By increasing price transparency and competition, the Internet is forcing companies to streamline their processes and eliminate inefficiency. They are doing so by closely working with customers and suppliers in order to offer a better service and a better price. More and more e-commerce is conducted over non-proprietary IT solutions, which reduces costs and offers better ways of communication between companies with different systems. By adopting ecommerce solutions, companies are gaining in efficiency and productivity and are offering better services that are available 24 hours a day, seven days a week (Pons et al., 2003).
The reason E-Commerce became so visible in the second half of the 1990s was the commercial aspect of the Internet. Once the Internet was opened to commercial activity, this worldwide network became the major carrier of business-to-business electronic data ex-change. The United Nations predicts 18% of purchases by firms and individuals will be conducted online by (UNCTAD, 2002. While the future of Web-based ecommerce in developed areas appears bright, consumers in developing countries, face a number of obstacles that may impact their view of e-commerce. Consumers and merchants in developing countries face a number of barriers to successful e-commerce, including less reliable telecommunications infrastructures and power supplies, less access to online payment mechanisms, and relatively high costs for personal computers and Internet access. These problems may cause consumers in developing countries to view e-commerce differently than consumers in developed countries. Consequently, Electronic commerce has become very popular because of the benefits and the convenience it brings along. As shown in Table 1, the benefits include product promotion, cost saving, timely information, shortened remittance time, information consistency, better customer service, better customer relationship, customization of products, competitive advantages, and convenience of doing business (Wen et al., 2001). Electronic commerce is no longer an alternative, it is an imperative. The only choice open is whether to start quickly or slowly. Many companies are still struggling with the most basic problem: what is the best EC model? Unfortunately, there is no simple answer for this question. Even companies in the same industry, of the same size, or with similar cultures are finding that one EC model does not fit all. Companies are required to review their EC models and rethink strategy in order to capitalize on the changing dynamics of the marketplace.

Global growth of e-commerce
The Internet provides an open global network and access to this network is relatively cheap; that is simply the basic idea. This has led to claims that Internet-based e-commerce will grow rapidly and help producers in developing countries to overcome problems of exclusion from the world economy and improve the terms of their participation.
To understand E-Commerce one must understand both the technologies that serve as the infrastructure and the business models taking advantage of the technologies. Both technologies and business models currently used are innovative and fascinating. However, we must realize that within several years almost all commerce will be e-commerce to some extent. No one considers doing business via telephone or fax as t-commerce or f-commerce. It is only a matter of time before we realize that there is no reason to call business that is executed digitally via the Internet or other networks "e-commerce." Table 1. The benefits of electronic commerce Benefit Description

Product promotion
Through a direct, information-rich and interactive contact with customers, EC enhances the promotion of products. Electronic medium also allows interactivity and customization for advertising content, based on the customer profile or input. EC thus offers an opportunity for new promotion strategies, enhancing the branding of products Cost saving By using a public shared infrastructure such as the Internet and digitally transmitting and reusing information, EC systems lower the cost of delivering information to customers, including personnel, phone, postage, and printing costs Timely information Due to their instantaneous nature, EC systems allow a reduction of the cycle time required to produce and deliver information and services. Shortened remittance time With electronic funds transfer (EFT), customers send their remittances electronically to the company's bank. This arrangement eliminates the time delay associated with the remittance in the mail system Information consistency EC ensures the consistency and accuracy of information through sharing of information and use of electronic forms for doing business European Journal of Business and Management www.iiste.org ISSN 2222-1905(Paper) ISSN 2222-2839(Online) Vol.11, No.35, 2019 Benefit Description

Better customer service
The ability to provide on-line answers to problems through resolution guides, archives of commonly encountered problems and electronic mail interaction 24 hours a day, 365 days a year, builds customer confidence and retention Better customer relationship EC enables the learning about customers due to its ability to record every event in which a customer asks for information about a product, buys one, requests customer service, etc. Through these interactions, the needs of the customer are identified and will feed future marketing efforts Customization of products The information-based nature of the EC processes allows for new products to be created or existing products to be customized based on customers' exact needs.
Competitive advantages EC enables a company to achieve competitive advantages of: cost saving based on reduced advertising/ promotion costs; product differentiation by customizing products and timely response to market; customer focus through better customer relationships and better customer services Convenience of doing business There is no limit on time and location to conduct a business with related parties. The information delivered to manufacturers, suppliers and warehouses is almost real If the promise of e-commerce is to be realized, poor countries must improve Internet access and get 'eready'. This is one of the core ambitions of the Digital Opportunities Task Force that was established by the governments of the G8 countries in 2000. But maximizing the benefits from e-commerce opportunities requires a broader strategy of both 'e-readiness' and 'commerce-readiness'. It also requires a healthy degree of skepticism about promises of dramatically reduced transaction costs and trade without intermediaries The rapid growth rate of Business-to-Business (B2B) E-commerce is being driven in large part by the exponential expansion of B2B exchanges and the new environment they offer for relationship building, access to goods, and opportunities to participate in ways both large and small that were inconceivable only a few years ago. The low-cost connectivity and universal standards provided by Internet technology are the driving force behind the explosion of e-commerce activities nowadays (Laudon & Laudon, 2008).
Online retail sales in the U.S. are expected to grow about $20 billion to $30 billion each year for the next five years, reaching somewhere between $215 billion and $335 billion by 2012, according to two recently released reports on e-commerce.
In 2007, non-travel-related e-commerce sales reached $175 billion, a 21% increase over the previous year, according to Forrester Research Inc. In its report, titled "U.S. E-Commerce Forecast: 2008 to 2012," Forrester predicts that online retail sales will reach $204 billion in 2008, $235.4 billion in 2009, $267.8 billion in 2010, $301 billion in 2011, and $334.7 billion in 2012. Since the late 1990s, e-commerce has been the subject of a lot of hype and attention. And recently, more specifically it is business-to-consumer (B2C) e-commerce which has been receiving the most public attention.
eMarketer, the world's leading provider of Internet statistics, also recognized as the authority on business online, reveals in their report (eMarketer, 2009) that B2C online sales in the USA alone (excludes travel, digital downloads and event tickets) will comfortably pass the $200 billion mark in 2013, reaching a new record total, which eMarketer projects will be $203.5 billion with an increasing ratio of 10.3% comparing with the year 2009. Looking at the Middle East, a recent report showed that the value of ecommerce has exceeded $4.87 billion in Kuwait, Lebanon, Saudi Arabia and the UAE in 2007. The analysis, which was based on face-to-face surveys in Kuwait and Lebanon, and online surveys in Saudi Arabia and the UAE, found that more than 5.1 million people in the four countries engaged in some form of e-commerce in 2007 (Field, 2008).

E-commerce in developing countries
Developing countries are home to more than 80% of the world's population, and are the site for growing use of ecommerce. There are theoretical claims that e-commerce could bring significant benefits to firms in developing countries, but we know very little empirically about the actual outcomes of e-commerce implementation (Molla & Heeks, 2007).
There is tremendous potential for e-commerce in developing countries. While the base of Internet use in these countries has been relatively low, the rate of growth has been high. Between 2000 and 2011 developing countries' Internet user population grew by more than 1500% to roughly 1500 million as shown in Figure 1, increasing their global share of all Internet users from 25% to75% . Despite the apparent benefits derivable from e-commerce adoption and use, Small to Medium Enterprises (SMEs) are slower to adopt the technology compared to their large business counterparts. This is particularly the case in developing economies such as Indonesia where factors such as the lack of telecommunication infrastructure (Sheth & Sharma, 2005), low average income of the population, the lack of credit card penetration (Hawk, 2004), as well as cultural barriers (Hawk, 2004;Paul, 2002), further restrict the viability of using e-commerce technologies. Ironically, the rate of Internet users in the Middle Eat which European Journal of Business and Management www.iiste.org ISSN 2222-1905(Paper) ISSN 2222-2839(Online) Vol.11, No.35, 2019 54 includes mostly Arab countries is very low 21.3% compared to the population, even less than the world average 21.9%, which is not the case in USA, and Canada where the rate exceed 70% of the population (Figure 2). Therefore, as global competition increases, nations are forced to adopt new trading practices in order to gain market share and increase export revenues. Liberalizing and opening the economies has become an imperative to survival in the global community, but one that also often jeopardizes local culture and beliefs. The need to use more sophisticated methods, to improve the telecommunication environment, to adopt common and harmonized procedures and standards, make electronic commerce and other information technology solutions valuable options to pursue in improving regional trade. Furthermore, the focus on implementing technology to enhance trade at the regional level also presents an opportunity to increase total Arab trade without sacrificing culture and beliefs. Figure 1. Internet users (in millions) in the world by geographic region Figure 2. World Internet penetration rates by geographic region

E-commerce situation in Saudi Arabia
According to Ansari & Alhazemi (2016) the people of Saudi Arabia including Saudis and Non-Saudis were aware about the concept of online shopping, and its scope. However, they were not aware of the benefits mainly the competitive prices offered on online shops. It seems that due to the lack of awareness about the benefits of online shopping they were not buying much online. The enablers of online shopping such as use of smart phone, tablets, laptops and internet were very encouraging. Another study by Ansari (2016) found that the people were well aware of online shopping concept, they were interested in buying online. In comparison to non-Saudis, Saudis were more interested, the study found that females were more interested than males in online shopping, psychographic factors did not influence the online shopping behaviour however, store-variables played important role in online shopping decision. Another study of Ansari (2017) conducted in Saudi Arabia suggested that navigation aspects were more preferred than e-interactivity by the e-customers on the e-retail stores while shopping online. To convert the prospective visitors into customers the e-retailers should emphasize more on navigation factors such as clarity of the website, informativeness of the website, speed of the website, organization of the website, effectiveness of the website, overall structure of the website, easy navigation on website, and ease of use of the website. Ansari & Qadri (2018), found that the image of the online retailers played important role in encouraging the online shopping. Ansari (2018) concluded that social class and cultural factors significantly influenced the online shopping behaviour of the e-consumers. Another study of Eid (2011) showed that B2C e-commerce customer loyalty in Saudi Arabia was strongly influenced by customer satisfaction but weakly influenced by customer trust.  Vol.11, No.35, 2019 Saudi Arabia has the biggest IT market in the Gulf region, with spending of US$ 3.4 billion in 2008 expected to rise to US$ 5.6 billion by 2013, a compound annual growth rate (CAGR) of 11%. The IT market should continue to grow, driven by a robust economy and infrastructure investments in major verticals such as oil and gas, power, financial and telecoms (Business Monitor International, 2009).
BMI predicts that per-capita IT spends will rise 42% to US$ 200 by 2013, with PC penetration also rising, to nearly 30%. Saudi Arabia accounts for around 40% of IT spending in the Middle East region. Youthful population demographics, a regional economic boom fuelled by high oil prices and a buoyant real estate sector, and specific factors such as the growing popularity of e-banking, will all drive retail growth. In 2008 substantial budgets were leveraged for e-government infrastructure development. Manufacturing and trading firms are seeking efficiencies, while demand for advanced IT services such as outsourcing, is expected to show a strong growth trend.
The most dramatic growth will be in broadband penetration, which is projected to rise from 6.4% last year to 31.2% by 2013. By 2012, there will be an estimated 8.9 million broadband users in the Kingdom. Investment in broadband and government initiatives has seen an improvement in e-services development and utilization, which was reflected in the UN's most recent e-government rankings, in which Saudi Arabia raised 10 places.
The Arab Advisors Group has released the results of a survey showing that e-commerce has achieved noteworthy popularity in the Kingdom of Saudi Arabia. The survey showed that 48.36% of Internet users in Saudi Arabia had purchased products online or using their mobile phones in the last twelve months. That represents more than 3.5 million e-commerce customers, or 14.26% of the Kingdom's total population. The results have estimated that these transactions totaled $3.28 billion (Smith, 2008).
An earlier study published by the Communications and Information Technology Commission (2007), Saudi Arabia, reveals that Internet penetration in Saudi Arabia was 49% out of the total population and nearly one third of the Saudi population have used Internet at least in the last 2 weeks.
Recent statistics cited by MiniWatts Marketing Group from the Internet World Stats reveals that Saudi Arabia has 13,000,000 Internet users as of June 2012, in comparison to 1,500,000 in 2003 (see Table 2). This indicates that the Internet use in Saudi Arabia has nearly duplicated ten times in a space of nine years .
Moreover, according to the Saudi Network Information Center (2009)  13,000,000 26,534,504 49.0% On the other hand, the Saudi Government has given the e-commerce issue a noticeably consideration and established a standing committee on e-commerce in February 1999 under the chairmanship of the undersecretary of State for the Ministry of Commerce for Technical Affairs. It has also launched a portal in 2005, providing some government services (www. yesser.gov.sa). However, the effects of this portal are still not evident due to its recent launch and have still not exhibited the effects of the local perception of e-commerce. The Ministry of Education in Saudi Arabia, under the auspices of the royal authorities, has taken up initiatives to introduce an Information Technology to students in its educational institutions through two project: "Watany," which is a project that envisages provision of a computer per ten students, connecting all schools with the national network, and providing LAN service in each school, while "Ta'heel" is a two year training course in five areas of informatics: desk top techniques, system development, Internet, computer networks, and computer maintenance for high school graduates. The main goal of those projects is to educate people on how to operate the system and use the Internet as well as leveraging their Information Technology (IT) skills.
It is quite obvious from the previously mentioned figures and statistics that the Internet is now being embraced by Saudi business. However, e-commerce is still in its infancy. Contacts will sometimes have e-mail addresses on their business cards but this is by no means a certainty. It is still quite common for business people (and some government officials) to use a Hotmail or yahoo style address rather than a corporate domain (NZTE, 2006).

Mobile e-commerce
In Saudi Arabia, the concept of mobile commerce (m-commerce) has incited significant interest over recent European Journal of Business and Management www.iiste.org ISSN 2222-1905(Paper) ISSN 2222-2839(Online) Vol.11, No.35, 2019 56 years and benefitted from considerable development. Figure 3.

Number of registered domains in Saudi Arabia up to 2012
Despite the recent downturn following the global financial crisis, the mobile industry has stayed relatively unscathed. With the so-called smart phone revolution, where advanced mobile devices are starting to see massadoption, the demand for more sophisticated mobile services is on the rise. Moreover, the penetration of mobile phone handsets and the diffusion of mobile technologies have been dramatically increasing in recent years.
Mobile users are able to gain access to information in real-time, and can communicate and purchase anywhere, at any time. As can be seen through such advantages, m-commerce provides a key innovation, and induces a number of opportunities, particularly for organizations. Furthermore, it is considered that user satisfaction may be significantly enhanced through m-commerce, thus providing the potential for user behaviors to be promoted and user satisfaction enhanced (Alkhunaizan & Love, 2013).
According to a recent study by on global mobile data traffic forecast, Smartphones represent only 12 percent of total global handsets in use today, but they represent over 82 percent of total global handset traffic. Moreover, the number of mobile phone subscriptions reached almost 6,000 million at the end of the previous year, representing a penetration rate of 86.7 percent worldwide and 78.8 percent in developing countries (Alwahaishi & Snasel, 2013).

Immaturity of e-commerce
The immaturity of e-commerce could be referred to three major factors; educational (illiteracy and lack of computer related skills), cultural/ethical (confidence in the products and the availability of redress), and technical (speedy transport and efficient payment systems) factors.

Human development factor Illiteracy
A major remark is it seems important from the data in Table 3 that the number of illiteracy is increasing over the world from 1970-2000 (847million to 862 million). If we try to analyze the details of the table is that: The number of illiteracy is decreasing over the period of 1970 till 2000, and it is estimated to be reduced to 35 million in 2015 Only in more developed countries that, which is not the case in the Arab countries, it started with 48 million and grew to 67 million in 2000, and it is estimated to be raised to 71 million. Even the statistics demonstrate that the situation is critical for Saudi Arabia, where the adult illiteracy rate (age 15 and above) is about 16% of the total, taking in consideration that 60% of the population are aged 15-64, comparing to the illiteracy rate of most of the EU countries, Canada and the US countries which is 0% (UNESCO, 2008).
The increasing of the rates of illiteracy is an indicator of the low education and at the same time it could be considered as an obstacle to the local and International firms to reach the Saudi consumers.

Lack of Computer-Related Skills
Another factor that may have a negative effect on the accessibility to the Saudi market is the low skills in computer, both the providers and users of Internet-based services require new skills. The lower the skills base, the higher the cost for implementing information technology and training in Saudi Arabia -and the lack of information about the consumer behavior are variables that can be the rationale way for introducing e-commerce by firms in developing countries.

Technical factors
Countries are usually at very different starting positions in the task of building their digital infrastructure to facilitate the development and diffusion of e-commerce applications. A robust, well-functioned financial sector is vital for economic growth and successful electronic activities, especially for developing countries.

Speedy Transport
There is no point trying to sell products that cannot be delivered at reasonable cost to the buyer's desired location.
For digital products this is not a problem, but most developing country exports are not digital, they are materials. Electronic transactions often raise expectations for faster delivery, making the transport infrastructure even more critical for the development of e-commerce. The policy lesson is that addressing the 'old' issues of providing efficient road and rail links, port facilities and fast customs clearance is essential for operating in the 'new economy'.

Efficient Payment Systems
E-commerce requires low-cost and reliable payment systems. While various solutions to the problem of payments for e-commerce transactions are being developed, it is essential that banks in developing countries must participate to make these attributes of payment systems as a criterion of helping the firms to get access Saudi market. Credit cards are important facilitators of e-commerce as they provide a credible payment channel for online transactions. However, because of the Islamic prohibition of interest, in Saudi Arabia, there has long been a debate about the acceptability of owning and using credit cards. Accordingly, Saudis were generally skeptical about credit cards during the early years of their introduction into the country. Saudi Arabia has a low CCPR (Credit Card Penetration Rate) of 15% comparing to 140% and 273% in Korea and Singapore for example (Karake & Qasimi, 2006).

Cyber Crime
Moreover, today, the frequent instances of online crime such as hacking, cracking encryptions, information snooping, identity theft and so forth, are grim indicators of the blurred concept of Internet ethics for many users. Though these acts are comparable to real life criminal behavior such as theft, forgery, fraud, and so forth; many people fail to make this connection. Often this is attributed to the immediacy of the medium, the lack of face-toface interaction, and apparent anonymity. Also, the absence of social and penal deterrents is another significant factor. Often, instances of online vandalism and crime are perceived as achievements by both the perpetrator and society at large (Sait et al., 2007).

Confidence in the Product
Buyers must be confident that the product being purchased meets the desired specifications. Product specifications are becoming increasingly complex as industrialized economies impose norms relating to product safety and labeling, as well as for labor and environmental standards. This makes e-commerce purchasing more hazardous for the buyer.

The Availability of Reimbursement
As in all other forms of commerce, customers must be confident that they can obtain reparation if something goes wrong. The seller's assurance may not be sufficient. E-commerce may be enhanced by online ADR (alternative dispute resolution) mechanisms offering rapid, low-cost redress for disputed transactions. These mechanisms are not intended to replace (slow and expensive) court adjudication, but to supplement it.
To some extent, new e-commerce relationships are already providing some of the solutions to support transaction arrangements. E-commerce portals that bring together buyers and sellers are providing an increasing range European Journal of Business and Management www.iiste.org ISSN 2222-1905(Paper) ISSN 2222-2839(Online) Vol.11, No.35, 2019 of services -from secure payment systems to links with logistics providers, insurance providers and customs clearance services. There are also new private certification agencies developing online certification schemes addressing international quality standards and environmental and employment standards (ISO 9000, ISO 14000 and SA 8000, respectively). Certification schemes are being developed by intergovernmental organizations such as the European Union and the UN agencies as well as by producer associations in developing countries. Some service providers even offer to collect samples from potential suppliers and dispatch them to potential customers. Although such solutions are beginning to become available, their reach is likely to be confined to large producers in developing countries whose operations are based in large urban centers.

Conclusion
The e-commerce market is driven by a relatively conservative attitude and online culture, which has not yet opened up fully to online purchases and commerce in Saudi Arabia. Although large numbers of consumers are embracing e-commerce, there is still a struggle to full acceptance. Even though it being the electronic age with Internet usage growing at a tremendous rate, but when it comes to ordering online, organizations and individuals still face resistance. Thus, the e-commerce industry in Saudi Arabia has a daunting task of convincing customers of secure transactions and protection of personal data.
Much still needs to be done to encourage e-commerce in Saudi Arabia. Key steps include the rapid development of human resources, greater attention paid to e-literacy among citizens and activities to build capacity, particularly to provide a skills base among SMEs for ecommerce. Governments should encourage business start-ups and incubation projects that advance this activity, including through public-private partnerships.
In addition, policies need to address infrastructure development, which is key to the developing electronic commerce. Infrastructure that can play an important role for businesses includes cost-efficient communication technologies such as broadband, satellite connections and Voice over Internet Protocol (VOIP). It is important to raise awareness and to offer training programs that target the business community in particular and the public in general.