Despite challenges, KSA ripe for e-commerce in retail industry

Updated 22 June 2012
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Despite challenges, KSA ripe for e-commerce in retail industry

The adoption of e-commerce in the Kingdom has been hampered by specific social and cultural business traits specific to Saudi Arabia, leadership priorities and the political structure in the country’s public and private sectors, according to a report on online retailing in the country.
While the focus on innovation tends to be geared toward oil, energy, construction, small and medium enterprises (SMEs) and entrepreneurship, the retail sector is an important economic contributor and should not be ignored, it said.
Currently, as this sector is strong, retail seems to sustain a profitable growth by itself, without giving much more thought on creating new solutions to enhance its economic value and competitiveness, claimed the study.
The report, titled “E-Commerce in Saudi Arabia: Driving the evolution, adaption and growth of e-commerce in the retail industry,” also highlights the steps that need to be taken to support the adoption and diffusion of the e-commerce model in Saudi Arabia.
Alexandra de Kerros Boudkov Orloff, author of the study and CEO and founder of Sacha Orloff Consulting Group that conducted the study: “Saudi Arabia has the biggest retail market in the GCC, contributing to 17 percent of GDP.
“Saudi Arabia is ripe for e-commerce as long as brands build trust.
“It is predicted to hit SR 250 billion ($ 66.7 billion) in 2012 and by 2014 alone.
“Overall IT spending is expected to reach $ 5.7 billion, comprising over 50 percent of total ICT investments throughout the GCC. SMEs in the Kingdom have a 52 percent Internet penetration rate.”
The study identifies two distinctive sets of challenges facing e-commerce in Saudi Arabia that apply in the first instance to retailers and consumers in the Kingdom.
Some of the key inhibitors to the widespread adoption of e-commerce for Saudi retailers include minimal options to gateway payment systems and a slow banking performance, resistance to change where there is no real benefit in shifting the organizational culture and structure of mature organization, retail strategy that dispels investments in e-commerce should they have no immediate monetary returns, few ICT professionals who are able to design an e-commerce platform for businesses, limited homogeneity between English and Arabic online content, fear of risk-taking and failure as e-commerce remains a new business model in the region, and traditional marketing techniques.
About 67 percent of online consumers in Saudi Arabia are under 35 years old, most of whom made their first purchase five or more years ago.
The study lists the key challenges to online purchasing among Saudi consumers. They include the fact the Internet is still regarded by Saudi consumers as a tool to access data and information rather than an opportunity to access physical goods; minimal options and reliability of delivery services, a preference for face-to-face business deals that affects trust in online purchasing, sociocultural habits and culture where consuming is part of the lifestyle and shopping an experience to share; minimal online payment options other than credit cards; and poor customer service and after-sales follow-up to online purchases.
To overcome the challenges, the report proposes a proper gateway payment system that would enable secure and easy purchasing within the Kingdom and in neighboring Arab countries, as the core of any e-commerce activity are transactions and payments.
“E-commerce, more than any other sales mechanism, requires an in-depth understanding of market segmentation among retailers. It is essential for retailers to remember that due to Saudi Arabia’s young demographic, today’s youth segment will be tomorrow’s clientele, and fostering product loyalty is critical,” said Orloff, whose consulting group specializes in the service and retail industry of the GCC and Middle Eastern markets.
The study recommends strict governmental regulations to enable the development of a commercial strategic framework of e-commerce taxation laws, ownership and IP protection.
The report adds: “A consensus should be implemented over proper business conduct and process with competitive pricing equal to physical shop prices.
“Retailers should also consider generating a true Arab brand identity that is recognizable and different from Western ‘copy and paste’ models, and localize the development amongst Saudi professionals, rather than outsourcing ICT and platform designs, which brings the problem of continuous training and talent sourcing.”
Retail organizations will have to take calculated risks to become ‘click and mortar’ businesses, where both regular retail and new e-retail will have to cohabit within two different forces to find an appropriate balance and both business models can be recognized to be of equal in importance and operational excellence, the report said.
It added this business model requires an open mindset, strong leadership, and assesses the risk of failure.
“The added value of e-commerce market opportunities in Saudi Arabia among the whole value chain of the retail sector directly and indirectly contributes economically to generating job creation opportunities, new commercial offerings as well as opportunities to enhance and support economic diversification effort and improve the competitiveness of SMEs,” said Orloff.
The study was released on June 16 and is relevant to the Kingdom’s retail industry, family-owned businesses, larger organizations, and SMEs, particularly in light of the changes being undertaken in the retail sector and to ensure the positioning of the Kingdom as the largest market in the GCC.

 


Fantastic four: Saudi women fly the flag for cycling

Updated 19 July 2018
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Fantastic four: Saudi women fly the flag for cycling

  • Saudi Arabia’s first women-only 10-kilometer cycling race was held in April 2018 at the King Abdullah City for Sports in Jeddah
  • More than 70 Saudi cyclists took part in the tour, including the four HerRide members

JEDDAH: Before Saudi Arabia’s women drivers there were Saudi women cyclists. Thousands of women around the Kingdom have taken to two wheels in the past few years, and groups of female cyclists are a common sight on city streets.

Now four young women have taken cycling to a new level by becoming the first Saudi female cycling team to join the Global Biking Initiative (GBI) European tour, an annual seven-day ride that highlights the sport and raises money for a range of charitable causes.

Sisters Fatimah and Yasa Al-Bloushi, Dina Al-Nasser and Anoud Aljuraid — founder members of the HerRide cycling group — joined hundreds of cyclists from all over the world earlier this month when the tour kicked off from Gothenburg in Sweden before heading through Denmark and on to the port of Hamburg in northern Germany.

More than 70 Saudi cyclists took part in the tour, including the four HerRide members. 

The dynamic HerRide team shares a passion for adventure, and a love of outdoor activities and sports. Fatimah Al-Bloushi, the team captain, told Arab News that when she started the group in July, 2017, “we were a group of amateur cycling enthusiasts and our idea was to train to be the first Saudi female team to participate in GBI Europe 2018.” 

This year was Fatimah’s second time in the GBI tour. Last year she was the first and only Saudi woman to take part in the event. 

“I want to empower Saudi women and encourage cycling,” she said.

Fatimah also enjoys skydiving, surfing, abseiling and climbing, and is also the first woman member of the Saudi Cycling Federation. In her hometown of Alkhobar, she organizes women’s gatherings twice a week to cycle together along the beachfront. She also volunteers to teach cycling for beginners. 

Like all sports events and tours, training plays a crucial role in preparing for the GBI tour. Team member Anoud Aljuraid, an accomplished hiker and technical climber, met Fatimah two years ago while climbing the Ol Doinyo Lengai, or “Mountain of God,” volcano in Tanzania.

“For me the challenge was sitting on the bike for up to eight hours while riding up to 100 kilometers a day,” Aljuraid said. “It was also hard to maintain a certain speed to reach the next destination or nutrition point on time, but my training helped me get over those challenges.”

Although the number of women cyclists on the streets of Saudi Arabia is growing, challenges remain for those joining the sport.

Team member Dina Al-Nasser lives in Riyadh and enjoys long-distance cycling as well as hiking and boxing. Her biggest challenge during the GBI tour was cycling alongside cars.

“I mostly trained at home, but it’s hard for me to train in areas where men usually train, such as Wadi Hanifa and Ammariyah,” she said. “However, I was able to get over my fear and by the third day on the tour I was riding alongside trucks and didn’t even notice.”

Al-Nasser said that cycling is challenging not only for women in Saudi Arabia but for professional cyclists in general.

“We hope that the streets will be more bike friendly, and that people can adopt the same infrastructure for cyclists that we have seen on the tour — such as special paved paths and traffic lights — here in the Kingdom,” she said. 

“Hopefully, cycling will become a lifestyle in Saudi Arabia and we will see people cycling to work one day.” 

The Saudi HerRide women’s team celebrate a challenging stage finish on the GBI European tour. (Supplied photo)

Despite the challenges, the HerRide team say they are hoping to join the next GBI tour. “It was a great experience to cross three countries by bicycle,” Yasa Al-Bloushi said. “Of course, we got some bruises and had falls here and there, but I look at that as a sign of accomplishment.”

The team members gained valuable skills from watching other riders during the tour. “I learned how to be a part of a team and to look out for each other. It was important to listen to my team-mates and focus on their needs,” said Dina Al-Nasser.

 Fatima Al-Bloushi said that the support of her team made her second tour more special than the first. “We knew each other’s weaknesses from day one and we always had each other’s back. If our energy levels were low, someone would provide nutrition. When our spirits were down, we had music to give us a boost, and when someone was nervous, we reminded each other to have fun,” she said.

“I experienced GBI twice. The first time I went alone and came back with a family of friends. The second time I went with friends and came back with family.”

The woman said the spirit of cooperation among cyclists on the tour was empowering. “What made this experience even more amazing, besides the beautiful scenery, was the quality of people we met,” said Fatima. “If we were struggling, they would pass by with a smile, give you a pat on the back and tell you that you were strong enough to push through — it really did make us feel stronger.”

 In future, the group plans to hire a professional trainer and offer cycling workshops for Saudi women. They also hope long-distance cycling events, such as the GBI, will one day be held in Saudi Arabia. 

“Under Vision 2030, I’m sure there will be a lot of local events for cyclists in the Kingdom, including women,” said Al-Nasser.

The four cyclists have some words of encouragement for Saudi women hoping to fulfil their dreams. “You will always find people who will give you negative comments, but as long as you are doing what you love and are not hurting anyone, just keep going,” said Al-Nasser. 

Fatimah said: “Two years ago I was looking to join a cycling team, but as a woman in Saudi Arabia I was unable to — now things have changed. My advice to all women out there is never say ‘no,’ always say ‘yes’ to opportunities.”