Source: SAMA Monthly Report/ Points Of Sale Transactions and E-Commerce Transactions- Mada Cards
A lot of us wonder, how did the pandemic impact our money spending behavior, should we look at it as an opportunity to save more? Or are we spending more to comfort ourselves.
Frankly speaking, I would say that I fall under the second category (not proud of it though), and so this question came to my mind, how did the pandemic impact our spending behavior in the kingdom, specially when it comes to online shopping.
The chart illustrates the spending of transactions through MADA Cards used to purchase and shop online through the electronic shopping, you can notice that in the pre- pandemic state, the average spending was 24 MM on monthly basis, after the declaration of the pandemic, most people feared online shopping due to the uncertainty of the situation in general and how to deal with items coming from other countries and passing through unknown channels, this drop reached to it’s lowest point in April to reach 16 MM.
You would wonder, what happened in June though? How come the data whopped at that month?
Exceeding the monthly average from pre-pandemic, in June the spending reached 37 MM and the number of transactions in that month increased by 40%, the reason behind this was the announcement of the 15% tax fee, which led a lot of Saudi’s to purchase expensive items before the implementation in July.
After the the implementation of tax system you would assume that the spending will lower back as before. However, it reached to somewhat stable state, the average spending is 34 MM a month, which is still higher than 2019’s average spending.
The main assumptions would be:
People are already familiar with the COVID-19 situation; the fear of ordering online has diminished
The pandemic made people reach the realization that online shopping is way easier than going physical to the stores
Under the pandemic circumstances, people tend to prefer paying by cards rather than holding cash
We can see that this pandemic disrupted the shopping behavior to some extent, the question that remain uncertain to this day, will this shopping behavior continue even after the pandemic?
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Excellent observations and readings ! I truly felt the same after the pandemic, how my courage has raised to trust online website And order anything that I need and unfortunately unnecessary items.
However, one thing that comes to my mind is that as you may know the government banned all cash payments to limit the spread of the virus; thus, I believe mada transactions have raised accordingly so that all citizens use their cards instead of paying cash. So my question here , have your numbers include the cash and non cash payments ?
Anyhow, this is an interesting reading that I personally enjoyed :)