NEOM second phase to begin this year, says CEO

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CEO Nadhmi Al-Nasr gives an address at NEOM. (Photo Supplied)
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Over 70 Ambassadors visit NEOM for the first time. (Photo Supplied)
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CEO Nadhmi Al-Nasr gives an address at NEOM. (Photo Supplied)
Updated 25 July 2019

NEOM second phase to begin this year, says CEO

  • Nadhmi Al-Nasr welcomes diplomats for inaugural visit to the city
  • Phase 2 strategy to be completed by end of 2019; targets 1 million population by 2030 

RIYADH: Day by day, NEOM is becoming a reality as more facilities are built at the project’s first urban area, NEOM Bay. It is just the start, and work will continue endlessly, CEO Nadhmi Al-Nasr said in his address to a large diplomatic gathering on their first visit to the site, located in the northwestern corner of Saudi Arabia. 

With cool weather, clean beaches and historical sites, NEOM is set to be a beautiful and sustainable destination. 

Speaking to over 160 diplomats who attended NEOM’s first ever beach sports events, Al-Nasr stated that the first phase of NEOM’s construction is now complete, and the world’s most ambitious project is set to announce its second phase strategy by the end of 2019. 

The journey of NEOM started in October 2017 when Crown Prince Mohammed bin Salman introduced the project to the world. The first phase strategy, a plan covering the economic concept, the funding, and the road map of the project, was developed, while the second phase will include detailed plans for NEOM’s 16 economic sectors and regions.

“We started Phase 2’s strategy, and we will finish that by end of 2019, which means by the end of the year we will share with the world what NEOM is going to be,” Al-Nasr added while speaking in  Gayal, a coastal site close to Sharma, where NEOM’s first commercial airport is located.

NEOM Bay will host a second airport, offices, and residential units for construction workers assigned to the rest of the development. One of its business objectives is to be home to new technologies that will influence the new wave of industrialization. To spur the technological advancement within NEOM, Al-Nasr said that the project “will be funding technology development, and we will be partnering with leading technology partners in the world.” 

HIGHLIGHTS

Over 70 ambassadors visit NEOM for the first time.

Phase 2 strategy to be completed by end of 2019; targets 1 million population by 2030.

As one of its 16 economic sectors, the tourism sector plans to be a major destination as it targets 5 million visitors by 2030, Al-Nasr told the diplomats. For this purpose, NEOM is developing different island and mountain resorts. Attracting such a huge number of visitors is a challenge, and the CEO added: “Some are saying that this is a long shot, but our business is to only address long shots.”

NEOM is also targeting 1 million citizens by the year 2030 “or little bit beyond,” he said. 

NEOM is strategically situated in a location accessible by 70 percent of global population within 8 hours. Al-Nasr highlighted that Rome is reachable by air in around 3 hours, while London is 5 hours away.

In his address, he invited the diplomats to be part of NEOM. “We want you to think that one day you could be living in NEOM, working and retiring in NEOM, and of course, we don’t mind you investing in NEOM.”

Australian Ambassador Ridwaan Jawdat told Arab News: “I was very impressed by the incredible natural beauty of the NEOM site — the beaches, water and coral reefs were stunning. I enjoyed touring the locations and meeting the staff. It is an extraordinarily ambitious project, and I was very happy to be given some insights on the vision and the planning.”

The tour concluded with a visit to the International Beach Soccer Tournament hosted by NEOM.

Dutch Ambassador Joost Reintjes asked about the King Salman Bridge, which Al-Nasr explained would “not only connect Saudi Arabia with Egypt, but with Asia and Africa.”

He concluded: “We started NEOM but we aren’t going to finish. There is no end to NEOM.”

 


Blessing in disguise: How pandemic was a catalyst for Saudi SMEs to change

Saudi Arabia’s consumer behavior was transformed during the lockdown as soon as malls and stores were ordered to shut their doors, creating a frenzy among consumers. (SPA)
Updated 20 September 2020

Blessing in disguise: How pandemic was a catalyst for Saudi SMEs to change

  • E-platforms played a crucial role in SMEs’ survival
  • COVID-19 transformed people’s shopping habits

JEDDAH: Saudis continue to shop online despite the government easing the COVID-19 lockdown, with the surge in e-commerce prompting small and medium-sized enterprises to adapt.

E-commerce saved global retail markets from collapse and stopped consumers from having to go out during the first wave of the outbreak. However, SMEs were the most vulnerable to the pandemic’s consequences and e-platforms played a crucial role in their survival.
Saudi Arabia’s consumer behavior was transformed during the COVID-19 lockdown as soon as stores were ordered to shut their doors, creating a frenzy among consumers although they were quick to adapt. SMEs were also forced to adapt, not only to accommodate the growing demand for online shopping but to ensure they survived with minimal losses.
Marion Janson, the chief economist at the UN’s International Trade Centre, said in June that around 20 percent of SMEs globally may not survive the pandemic.
A recent report from Visa revealed increased anxiety among merchants in Saudi Arabia, with 67 percent of small businesses noticing a decrease in average consumer spending.
Many Saudi consumers started shopping online for the first time, primarily for essentials. The Visa report showed that two-thirds of the Saudi consumers surveyed said that COVID-19 led to their first online grocery purchase, while 59 percent made their first online purchase from pharmacies.
“With the confusion at the beginning, we didn’t know what was acceptable and what wasn’t,” said Dr. Suhad Zain, a government employee in Jeddah. “Can we risk going out to shop for our daily needs or not? We needed to be sure that everyone in the house was safe, including the driver, and not expose ourselves to the invisible menace that changed our lifestyles. Most of our groceries were obtained online, from produce to water bottles to even appliances and leisure items. It had to be done, even though we needed time to accept the new change.”
Fear of the virus is expected to change the way consumers behave forever. “It became more convenient even after the lockdown was lifted,” Zain added. “After a few months we got used to it and, as a family, it became our new preferred means of purchase.”
Such conditions were a catalyst for online commerce, according to the Visa report, with 38 percent of merchants in the country reporting the introduction of online offerings as a direct result of the pandemic while more than half had an e-commerce presence before the pandemic.

Two-thirds of the Saudi consumers said COVID-19 led to their first online grocery purchase, while 59% made their first online purchase from pharmacies. (GettyImages)


The report also said there was a surge in e-commerce, a preference for trusted brands, a decline in discretionary spending, and a polarization of sustainability. Consumers have a larger basket, but reduced shopping frequency, and will shift to stores closer to home. A change can easily be detected in Saudi consumer behavior.
But the shift to online commerce, with cash transactions being replaced by digital payments, has negatively influenced cash-only retailers and presents a tough challenge to these merchants, who have to understand the shift in consumer behavior and adapt accordingly and urgently.
“Saudi business owners currently face multiple challenges that they need to deal with when they want to shift to e-commerce, some of them even lack the knowledge of how technology could benefit them and what options it could offer,” Talal Abdullah, a business development and marketing consultant, told Arab News.
“Also some will need to find a technical partner to successfully transform to e-commerce and, most importantly, they need to revisit their business model canvas to determine how they want to employ this technology for the best of their businesses.”
In order to overcome these challenges, Abdullah suggested that business owners look for the right technical partner based on their new model.
“If they fail to find a suitable technical partner, then they need to set a clear budget for the application or website they need to set up. But before reaching out to any company that offers support with these technical services, you must get in touch with real clients of these companies and inquire about their business and how they deal with them.”
He added that seeking assistance from technical consultants or owners of similar projects could cut down on time and effort. Joining business accelerators and incubators, as well as entrepreneurship and technology communities, could help with expanding knowledge and relationships and contribute overall to a smoother transition.
But these changes have their costs too, imposing new financial burdens on an already weakened business due to the pandemic and the time required to build and adapt a new business model that targets a completely different group of customers. It is a serious challenge for many small retailers.
Abu Mohammed has been in the retail business for 20 years. He used to have frequent customers who came in for a specific type of clothing with a certain price range. But, with the lockdown, he could hardly sell anything.
“I began targeting a different kind of customer in the past couple of years where I was importing new clothes and selling them through Instagram and e-commerce websites,” he told Arab News. “However I still cannot completely substitute my current store with a completely virtual one. That needs time and money to build a reputation.”
He said the lockdown had been a harsh experience for him and that he recognized the need to expedite his old plans to transform his store into an actual brand, since people were gradually moving toward online shopping from well-known brands.
“This transformation is not going to be easy at all,” he added. “It will need a good marketing plan and well-spent money not only on tools but also staff. It is a completely new experience, however. I know e-commerce is here to stay and it is our only way forward. Otherwise my work for years will gradually vanish. This crisis could be a blessing in disguise, who knows.”