From paper coupon to digital code: A tool over a century old

The coupon idea is not new; global markets have known it since the late 19th century in the form of paper coupons cut from newspapers and magazines, with a simple function: to attract a new customer to try a specific product.

What e-commerce changed is not the tool itself, but its economic function. After the coupon was an initiative launched by the seller towards the buyer, the direction reversed: the consumer became the one who takes the initiative to search for the discount, delays their purchasing decision until they find it, and compares stores based on available valid codes. Thus, the coupon moved from the newspaper margin to the heart of the supply and demand equation.

Saudi e-commerce growth: The environment that created the phenomenon

Official figures reflect the scale of this shift; the statistical bulletin issued by the Saudi Central Bank (SAMA), as reported by Ajel, revealed that e-commerce sales via 'Mada' cards recorded their highest monthly levels ever during October 2025, with a total exceeding 30.7 billion riyals, an annual growth of 68% compared to the same period in 2024.

This number does not appear to be a fleeting leap; sales reached about 88.3 billion riyals during the third quarter of the same year with a quarterly growth of 15.2%, while data from January to October 2025 showed cumulative growth of 47.3%. A continuous upward curve indicates a structural change in spending behavior, not a seasonal wave. These figures are limited to 'Mada' card transactions, excluding credit card payments, meaning the actual market size is larger than shown.

In an environment of this size and growth rate, every percentage point of discount gains real economic weight: savings accumulated for the consumer over the year, and a bargaining chip the store employs in the race to acquire the customer.

Psychology of the discount: Why does the consumer delay purchase in search of a code?

The answer goes beyond the innate desire to save. What actually happens is a change in the 'perceived value' for the consumer; the displayed price is now read as a hypothetical negotiable point that can be reduced, not a final number. When a shopper gets used to having a discount on most of their transactions, the discount shifts from an exceptional feature to a natural expectation, so much so that its absence, not its presence, is what catches the buyer's attention.

This psychological change has tangible consequences on purchasing behavior: postponing order completion until a code is found, abandoning the shopping cart when it is unavailable, and strategically waiting for major sales seasons. The consumer here is not acting impulsively; they are practicing something akin to active management of their budget, and this pattern becomes more entrenched as the frequency of digital purchases and their options increase.

Store calculations: The discount as an acquisition tool, not a loss

At first glance, it may seem that stores are the losing party in this arrangement, but the economic reality is different. In modern e-commerce, the discount is calculated as part of the customer acquisition cost, a cost that stores would have paid anyway through paid advertising channels. The difference is that the discount goes directly into the consumer's pocket instead of advertising budgets, and achieves for the store what an ad campaign cannot: an actual completed purchase.

Stores look beyond the first transaction; a customer who enters via a discount code may become a repeat customer whose cumulative value outweighs the cost of the initial discount many times over. In a market where competition is fierce among major platforms with converging products and prices, the discount sometimes becomes the sole decisive factor in the consumer's choice between two equivalent stores. For this very reason, stores continue to fund these discounts year after year despite their direct cost.

However, this equation is not without cost; some retail specialists warn that the culture of permanent discounts may push consumers to continually postpone their purchasing decisions in anticipation of a better offer, and in turn puts pressure on the profit margins of small and medium stores that do not have the same capacity as large ones to absorb discounts within their cost structure.

This dynamic reaches its peak during major discount seasons, foremost among them the White Friday which has established itself as a fixed annual date in the Saudi shopper's calendar. Economically noteworthy is that the impact of these seasons goes beyond temporarily boosting sales to redistributing spending throughout the year; some families delay purchasing large appliances and high-value items for months waiting for the season, while stores reschedule their inventory and campaigns around this expected peak. Thus, purchasing decisions that were scattered throughout the year turn into a concentrated spending block planned in advance by both parties: the consumer for maximum possible savings, and the store for the largest share of the demand wave.

Coupon platforms: The intermediary that organized the chaos

With the proliferation of stores and offers, a practical problem emerged: how can the consumer distinguish a valid code from an expired or fake one? This very gap paved the way for a new intermediary layer in the market: specialized platforms that collect discount codes, verify their validity, and update them continuously, playing a role akin to a digital clearinghouse between stores seeking customers and consumers seeking value. Among the most prominent of these platforms in the Saudi market is Couponza, specializing in collecting the latest offers and codes for regional stores.

Economically, these platforms perform a function beyond aggregation: they reduce the 'search cost' for the consumer and increase the efficiency of the store's marketing spend by directing it towards an audience already ready to purchase. Thus, the journey is complete: from a paper coupon in a newspaper to an independent digital brokerage sector with its own tools and business models.

What do discount codes say about the future of Saudi consumption?

When the phenomenon is viewed through a broader lens, discount codes appear as an early indicator of three parallel tracks: a consumer planning their spending with digital tools instead of impulse buying, price competition among stores moving from displayed price tags to a layer of dynamic discounts, and an e-commerce market continuing to expand at a pace that makes spending efficiency a priority for both sides.

As e-commerce continues to expand in the Kingdom, discount codes are likely to become a permanent part of the online shopping journey, not just a seasonal promotional tool. And if the paper coupon took a full century to transform into a digital code, the next phase may need only a few years for the discount to fully integrate into the pricing structure itself: personalized discounts built on each consumer's behavior and applied automatically at checkout. Then the question will not be: Is there a discount code? But rather: How did the discount become part of the price itself?