Amazon eyes partnerships with Saudi SMEs, tech startups

Amazon eyes partnerships with Saudi SMEs, tech startups
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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%. (Supplied)
Amazon eyes partnerships with Saudi SMEs, tech startups
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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%. (Supplied)
Amazon eyes partnerships with Saudi SMEs, tech startups
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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%. (Supplied)
Amazon eyes partnerships with Saudi SMEs, tech startups
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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%. (Supplied)
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Updated 26 July 2021

Amazon eyes partnerships with Saudi SMEs, tech startups

Amazon eyes partnerships with Saudi SMEs, tech startups
  • Retail conglomerate launched a dedicated Saudi platform in June last year, and has seen double-digit growth

DUBAI: Global conglomerate Amazon is looking to partner with more entrepreneurs and technology startups in Saudi Arabia, as it aims to boost the dedicated Saudi retail site it launched a year ago and interact more with the local ecosystem.

The Global Entrepreneurship Monitor (GEM) annual report released this year found that entrepreneurial activity in the Kingdom increased by 24 percent year-on-year in 2020, while a third of Saudis surveyed said they were keen on launching a business within the next three years.

At the same time, research platform Magnitt reported that the value of investment deals in the technology startup sector in Saudi Arabia last year soared by 55 percent year-on-year to $152 million.

Amazon is aiming to capitalize on this fast-growing entrepreneurial ecosystem. “We’re working with the local entrepreneurs and we see a lot of those in the Kingdom. I think the space has changed drastically,” Ronaldo Mouchawar, vice president of Amazon Middle East and North Africa, told Arab News.

“You see a lot more venture capital, family offices investing in tech. So, we want to work with these companies and content developers and content owners,” he added.

The Syrian entrepreneur co-founded online retail platform Souq.com in 2005, which was then sold to Amazon in 2017. While direct acquisitions on that scale may not be on the cards, Mouchawar said the global giant was interested in working more closely with Saudi partners.

“If not totally invest, definitely a lot of partnerships, working to make sure that whatever innovation that’s working locally is available for our customers in the Kingdom,” he said.

On June 17 last year, Amazon launched its dedicated Saudi website Amazon.sa, rebranding the old Souq.com website. 




Ronaldo Mouchawar, Vice President of Amazon MENA. (Supplied)

“This was kind of the first Amazon Arabic site. We had to put the infrastructure in Saudi Arabia — 14, 15 stations. We had about 2,000 people and trained them on the systems,” Mouchawar said, adding that the site has performed well.

“We’re seeing high double-digit growth obviously in most of our locales. Very good growth. We don’t report growth by region, but overall the industry is growing and Amazon being newly launched is attracting a lot of customers.”

In its annual report for 2020, Amazon reported a 38 percent growth in net sales in North America and a 40 percent spike in sales internationally. While individual sales figures are not available for individual countries or regions, a review of Google search term trends shows that searches for the term Amazon in Saudi Arabia over the last five years peaked in mid-June last year and the volume of searches for the company has increased by 38 percent in the last 12 months.

A clear indication of the success of the site is the fact that Amazon announced plans in March to hire 1,500 new employees in Saudi Arabia and add 11 buildings to its network. The expansion will boost storage capacity in the Kingdom by 89 percent and its geographical delivery network by 58 percent.

FASTFACTS

• Amazon currently operates three warehouses — known as fulfillment centers — in Riyadh and Jeddah.

• It has 11 delivery stations and two sorting centers in the Kingdom.

• By the end of the year, Amazon will boost the numbers 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.

The global conglomerate currently operates three warehouses — known as fulfillment centers — in Riyadh and Jeddah, as well as 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.

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.

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.

Mouchawar said there are three main differences with the Saudi market, which they have adapted into their strategy in the Kingdom. “Obviously the language is one — we had to take care of the language to suit. It’s a very mobile-heavy user base: 80 percent of our customers are on mobile phones. So, as you market to these customers, we have to be aware of that.  “The Saudi customer is fairly younger in demographic,” he added. “We had to make sure also the selection — the product offering — is catering to a younger audience and larger families. Consumables and groceries, for example, are important to us because of the family sizes and the consumption nature,” he said.

A lot of retailers, such as Carrefour, have been setting up their own fulfillment centers in the Kingdom, to cater to the demand in online sales. While some have been adopting artificial intelligence and robotics into their warehouses and are looking at driverless vehicles and drones for transport, Mouchawar believed manpower will still be the core focus of the workforce for some time to come.

“I know there are technologies such as drones and robotics — some help in improving the service and the quality, but also some things are still far away, like a drone delivery in the region requires a lot of different changes to different things,” he said.

As a result, he believes the continued growth of the site will present employment opportunities for young Saudis. “I think there’s a huge opportunity to add people from the region to the team. We’ve been doing that consistently in Saudi Arabia, Jordan and Egypt. I’m very excited about the opportunities that we are able to provide to young people, especially in this sector of content and tech,” he said.


Saudi group wins Subway master franchise deal in UAE

Saudi group wins Subway master franchise deal in UAE
Updated 21 September 2021

Saudi group wins Subway master franchise deal in UAE

Saudi group wins Subway master franchise deal in UAE
  • In Europe, Middle East, and Africa, Subway plans to double its number of restaurants across the region in the coming years

DUBAI: Saudi Arabia’s Kamal Osman Jamjoom Group on Tuesday signed a master franchise agreement with Subway in the UAE as the restaurant brand seeks to expand its footprint in the region.

The deal marked the start of a new chapter for Subway in the UAE as it seeks to expand its footprint and remain competitive in the market.

“Subway is making bold and impressive changes to continue to grow its presence in markets around the world,” said Hisham Al-Amoudi, Group CEO of Kamal Osman Jamjoom Group.

“As Subway continues to expand internationally, we are focused on attracting well-established, large-scale operators in regions where they can leverage market expertise to help our brand thrive,” said CEO John Chidsey.

Established in 1987, Kamal Osman Jamjoom Group is a major franchise industry player in the Middle East with 675 stores across seven countries, making it one of the largest franchise networks in the region. They are a valued partner to some of the world’s most iconic brands, such as The Body Shop, LEGO, and Early Learning Center.

The group’s “deep knowledge of the Middle East and experience strengthening and expanding other global franchisee brands makes them the ideal partner in the UAE,” Mike Kehoe, EMEA president at Subway.

In Europe, Middle East, and Africa, Subway plans to double its number of restaurants across the region in the coming years and will continue to seek strong partners to support the brand on its journey.

The agreement will enable significant growth in the UAE in the coming years  including accelerated deployment of restaurant remodels — featuring a new, modern “Fresh Forward” design — as well as improved, consistent guest experiences, both on- and off-premise.


Saudi team’s performance at robotics summit to pave way for more progress

Saudi team’s performance at robotics summit to pave way for more progress
Updated 21 September 2021

Saudi team’s performance at robotics summit to pave way for more progress

Saudi team’s performance at robotics summit to pave way for more progress

RIYADH/JEDDAH: As the Saudi team secured sixth place in a contest at the World Robot Summit held in Japan, the chief of the Research Products Development Co. (RPDC) expressed optimism over Kingdom’s plan to promote artificial intelligence and build a strong robotics base in the Kingdom.

Abdulmohsen Al-Majnouni told Arab News that it was a major accomplishment as the Kingdom “is building its capabilities” to bring about the Fourth Industrial Revolution.

The company is owned by Taqnia, a subsidiary of the Public Investment Fund. Officials of the Research Products Development Co. led the Saudi robotics team, which competed with 16 other countries at the summit and qualified for the final contest.

“Inspired by the Kingdom’s Vision 2030, our national robotics team of young men and women, under the leadership of Dr. Nahid Sidki, the chief technology officer of RPDC, reached the final competition. The journey to the summit included qualification round of 119 international teams where 16 teams managed to reach the finals in the industrial challenge,” he said.

According to Saudi Minister of Communications and Information Technology Abdullah Alsawaha, advanced technology from the Fourth Industrial Revolution is expected to generate around SR1 trillion for the Saudi economy in new revenue streams.

The Kingdom will enjoy economic boosts from robotics, artificial intelligence, and wireless production models as it pushes for smarter cities and infrastructure.

“This accomplishment is inspiring to both our young men and women and to our leadership. We do not need to wait until 2030 to start achieving our targets. They are closer than many (people) think. With the government's support, we can start building amazing capabilities in robotics and AI and transform the Kingdom into a highly competitive economy,” said RPDC COO Dr. Mashal Al-Harbi. 

The secret to achieving the target, he said, is to find “passionate, dedicated and smart talent, engaging them in challenging projects for hands-on experience and supporting them with the needed resources and guidance to unlock their full potential.”

The World Robot Summit is supported by Japan’s Ministry of Economy, Trade and Industry; and the Energy Industrial Technology Development Organization. It aims to expedite the development of robotics and AI technologies to support the Fourth Industrial Revolution. 

“They open it up to the world to inspire young men and women to solve a very challenging problem. We managed to develop an innovative architecture to address the challenge and our talented team worked hard for almost two years despite the COVID-19 lockdown and the many challenges we faced,” said Sidki.

“The accomplishment is a reminder to our young talent that only through the dedication and hard work we can accomplish what others consider impossible,” he said.

“My message to Saudi young men and women is to follow your dreams and unlock your full potential and don’t let fear drive your ambition. Moving forward, we expect Saudi Arabia’s young talent to be major competitors in international AI and Robotics competitions,” the company’s chief technology officer said.


Egypt’s sovereign fund eyes investment in fintech sector

Egypt’s sovereign fund eyes investment in fintech sector
Updated 21 September 2021

Egypt’s sovereign fund eyes investment in fintech sector

Egypt’s sovereign fund eyes investment in fintech sector

RIYADH: The Sovereign Fund of Egypt is exploring investment opportunities in the fintech sector with a focus on small and medium projects, Ayman Suliman said in a CNBC Arabiya interview.

Talking about investments in other sectors, the chief executive officer of the fund said the tourism sector represents 20-20 percent of the fund's total investments.

Suliman also mentioned the fund’s plans to transform the historic Bab Al-Azab area in Cairo’s Salah Al-Din Al-Ayoubi Citadel into the first integrated innovation zone in the Middle East and North Africa.  

He said several projects in the health sector are also being studied such as the expansion of pharmaceutical exports.

“The health sector is a mainstay in the fund’s investment portfolio,” the CEO added.

The fund aims to attract private investments in Egypt’s underutilized assets and create wealth for future generations and boost the country’s economic growth.


Abu Dhabi to use drones to deliver medical supplies

Abu Dhabi to use drones to deliver medical supplies
Updated 21 September 2021

Abu Dhabi to use drones to deliver medical supplies

Abu Dhabi to use drones to deliver medical supplies

DUBAI: Abu Dhabi is working on plans to add advances drones to its health sector’s supply chain, said an official statement.

Drones will be used to deliver medical supplies, medicine and blood units, vaccines and samples between laboratories, pharmacies, blood banks across healthcare facilities around the city in a safe manner.

The project will create a state-of-the-art delivery system and network using drones at 40 stations throughout the year 2022, the statement said. 

The project is a collaboration between Abu Dhabi’s Department of Health, the General Civil Aviation Authority, SkyGo and Matternet. It will leverage existing advanced infrastructure to transform healthcare logistics.

It aligns with the year of preparation for the “UAE Projects of the 50,” the UAE's Fourth Industrial Revolution Strategy, and broader strategies to position Abu Dhabi as a global hub for innovation. 

The statement issued by the Abu Dhabi Government Media Office said: The use of drones will yield environmental benefits with a reduction in CO2 emissions and reduced road traffic congestion.” 

SkyGo and Matternet have completed phase one of testing and are now working on phase two, which will be finalized by the end of this year and will address all aviation safety requirement and risk assessments.


Oil, equities appear to shake off Evergrande worries

Oil, equities appear to shake off Evergrande worries
Updated 21 September 2021

Oil, equities appear to shake off Evergrande worries

Oil, equities appear to shake off Evergrande worries
  • Evergrande, founded in 1996, is one of China’s biggest builders of apartments, office towers and shopping malls

LONDON: Oil and equities finally appeared to shake off concerns that have plagued financial markets in recent days following the crisis at China’s largest property group Evergrande.

Most economists now believe there is little risk of wider global financial market contagion from the problems at Evergrande which is on the verge of defaulting on its massive $300 billion debt pile.

Indeed, it emerged that funds run by US asset management giant BlackRock and global bank HSBC appeared to have embarked on a “buying the dip” strategy and increased their holdings of Evergrande bonds as the developer’s liquidity crisis was intensifying.

Data by Morningstar reveals BlackRock bought up five different Evergrande dollar bonds through one of its high-yield funds, which had holdings in the developer then worth $18 million, in August.

An HSBC-run high yield fund also purchased Evergrande’s debt over the summer. The Morningstar data revealed the fund increased bond holdings by 38 percent since February, but the value of the fund’s total exposure at $31m declined over the same period due to falling prices.
Ashmore, the emerging market investment specialist, is understood to have the highest exposure with more than $400 million of its bonds. UBS had close to $300 million of exposure to Evergrande bonds.

Patrick Ge, manager research analyst at Morningstar, said: “We’ve seen a few funds adding to China Evergrande between July and August 2021, given widening spreads and attractive valuations. This is in line with what we have heard from some managers where they said that at its current levels, they believe Evergrande is a buy.”

Evergrande’s Hong Kong-traded shares have fallen 85 percent this year and its bonds have also been downgraded by global credit ratings agencies.

Simon MacAdam from Capital Economics said: “A managed default or even messy collapse of Evergrande would have little global impact beyond some market turbulence.”

However, Chinese regulators, who are understood to be looking at breaking the company up, have so far failed to provide any details about how they will resolve Evergrande’s $300 billion debt pile.

China watchers only expect the government to intervene if the company and its lenders fail to agree on how to handle its debts.

JP Morgan analyst, Frank Pan, said Evergrande was likely to go through the same process as developer China Fortune Land, which defaulted on $530m of dollar-denominated debt earlier this year.

Pan said: “That means a standstill for all creditors while allowing operations to continue.”

After a decade of warnings from economist on the threat posed by China’s rising debt levels, Beijing’s financial regulator last year imposed much tighter limits on real estate-related borrowing.

Evergrande has $18 billion of outstanding foreign-currency bonds, mostly held by Chinese banks and other institutions. 

Fears persist that China’s property sector, which has been a central engine of the country’s economic expansion, is facing an unprecedented slowdown because of the current tightened credit conditions.

If property companies default on their debts, investors who hold their bonds could find their finances under pressure, forcing them to sell other investments to raise cash, which could in turn impact on other markets beyond property and beyond China.

Evergrande, founded in 1996, is one of China’s biggest builders of apartments, office towers and shopping malls.

It is estimated to have more than 200,000 employees and supports almost 4 million jobs in construction and other industries through 1,300 projects in 280 cities across China.

Evergrande’s founder, Xu Jiayin, was China’s richest entrepreneur in 2017 with a net worth of $43 billion and remains the country’s richest real estate developer.