The Communications and Information Technology Commission (CITC), Saudi Arabia’s digital regulator, has revealed that the number of delivery applications operating in the Kingdom has risen by over 460% in just two years, from 3 in the fourth quarter of 2019 to 17 at the close of 2021.
The rapid development of the delivery application ecosystem has been made possible by the CITC’s new regulatory sandbox, a powerful tool for technology and regulation development that has produced one of the Kingdom’s first success stories of the year: Jahez, an online food delivery platform, became the first company to make an initial public offering in Saudi Arabia in 2022, implying in a market value of SAR 8.9bn.
The sandbox initiative, phase one of which was launched in 2020, was introduced as a response to the jump in demand for online commerce during the Covid-19 pandemic. The CITC’s move to support the digital delivery space has seen a marked increase in online ordering activity, with the daily average of requests rising from 117,000 in the fourth quarter of 2019 to 525,000 in the fourth quarter of 2021. The average monthly order value, meanwhile, increased from SAR310 million to SAR1.75bn over the same period.
Commenting on the sandbox’s implementation, Dr. Mohammed Al Tamimi, governor of CITC, said: “It has been a year of extraordinary success for Saudi delivery firms. The segment was put under enormous strain during the pandemic, and the introduction of the sandbox has brought crucial flexibility and investment to the market.”
The sandbox is a regulatory environment in which delivery agents can trial new applications and processes in a space that allows for experimentation while protecting consumers. The concept has been successfully deployed in financial markets worldwide, but the Kingdom’s use of it in the delivery app segment places it at the forefront of global regulatory innovation.
The implementation of phase two, which began in January 2021, expanded assessment and advisory to the areas of consumer protection, quality of service, and business legality. All sandbox companies enjoy an array of benefits, including regulatory support, assistance with obtaining funds, access to development workshops and training courses, and intellectual property registration.
CITC’s collaborative approach between the private sector and the regulatory space aims to drive innovation and localization in the sector while ensuring that the Kingdom keeps pace with the fast-emerging digital economy.
CITC regulatory sandbox supercharges Kingdom’s delivery application space 17 active delivery applications in Q4 2021, from 3 in Q4 2019.