• The expansion will boost storage capacity in the Kingdom by 89 percent and its geographical delivery network by 58 percent

Shane McGinley

DUBAI: Amazon plans to hire 1,500 new employees in Saudi Arabia and add 11 buildings, the company said.

The expansion will boost storage capacity in the Kingdom by 89 percent and its geographical delivery network by 58 percent.

The global conglomerate currently operates three warehouses – known as fulfillment centers – in Riyadh and Jeddah, 11 delivery stations and two sorting centers. By the end of the year, this will be increased to six warehouses and 13 delivery stations. Eleven brand new buildings will be added to the network, while some older facilities will be closed or upgraded.

Amazon’s investments this year will achieve an enhanced storage capacity delivered through a pipeline of new openings, closure of older buildings, and upgrades designed to deliver a smarter, faster and more consistent experience for customers. By the end of 2021, Amazon’s fulfillment network will reach across a total floor area of over 867,000 square feet.

The Seattle-based company is also partnering with Saudi Post and a network of 10 service partners.

“These new investments reiterate our commitment to Saudi Arabia, contributing to the local economy through the creation of new job opportunities. Our investments in technology and infrastructure align with Saudi’s digital transformation goals, enabling world-class fulfillment offerings to our independent seller partners, and faster delivery on an expanded product selection to our customers,” Prashant Saran, director of operations for Amazon Middle East and North Africa, said in a statement.

The company did not reveal the value of the new investment in Saudi Arabia or a breakdown of current staff numbers. The e-commerce market in the Kingdom has surged in the wake of COVID-19, as people were forced to stay at home and do their shopping online.

According to figures by research firm Statista, e-commerce revenue in Saudi Arabia is set to reach $7.051 billion this year and grow at an annual rate of 5.38 percent to reach $8.697 billion by 2025. The largest segment for consumers is fashion and the average revenue per user is estimated at about $248.69.

A survey of 900 online Saudi shoppers late last year by advertising platform Criteo found that 58 percent of Saudi respondents said they felt more comfortable shopping online than in-store. When it comes to service considerations, 35 percent of respondents said the shipping cost was a big factor in their decision-making process.