(MENAFN - Arab News) JEDDAH: The increasing reliance on shopping online has also seen rates of fraud and theft rise affecting 20 percent of Saudis who make Internet-based purchases economists have warned.
A global report issued recently by Beaufort International Associates saw the Kingdom ranked first in the region in terms of online shopping over the past year constituting 3.8 million consumers out of 15.6 million Internet users in the country.
According to the report only 15 percent of all companies in the Arab region have an online presence. The volume of online shopping is expected to grow globally to $1.4 trillion by the end of 2015 with Arab consumers making up $15 billion of this amount.
The report reveals online commercial transactions in the Kingdom are centered in the larger cities including Jeddah Riyadh and Dammam while only 16 percent take place in Makkah and Madinah.
These figures reflect the growing reliance on the convenience and ease of e-commerce transactions experts say with many consumers able to access a variety of markets and goods from the comfort of their own homes.
However the expansion of the market using online technologies has also increased concerns about consumer safety and protection. Statistics show 20 percent of consumers in the Kingdom have been the victim of online fraud or theft.
'Although online commerce has facilitated buying and selling by overcoming physical boundaries between traders and consumers negative side effects have emerged due to a lack of trust between parties the ease of fraud and theft by using fake identities and names and sale of products that do not match online descriptions or regulatory specifications' said Salem Bajajah an analyst and economist.
According to Osama Filali a professor of economics at King Abdulaziz University the rapid expansion and facilitated movement online as opposed to traditional shops has intensified competition and reduced direct sales and purchases. Usage will only increase over time.
In an effort to protect consumers the Ministry of Commerce has issued a set of penalties for those who defraud consumers. These include a fine of up to SR1 million cancelation of commercial licenses doubling of financial penalties for repeat offenders and naming and shaming violators by publishing their names in newspapers.