Retail luxury sector in Saudi Arabia is fast evolving, says Harrods MD 

Special Retail luxury sector in Saudi Arabia is fast evolving, says Harrods MD 
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Michael Ward said that Harrods is privileged to have the loyalty of some customers who have shopped with them for their whole lifetime, and who may even be second or third generation patrons. (Supplied)
Special Retail luxury sector in Saudi Arabia is fast evolving, says Harrods MD 
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At Harrods, rewards members gain exclusive access to an array of benefits and earn points as they spend. (Supplied)
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Updated 26 March 2023

Retail luxury sector in Saudi Arabia is fast evolving, says Harrods MD 

Retail luxury sector in Saudi Arabia is fast evolving, says Harrods MD 
  • Michael Ward: Nurturing loyalty has always been at the heart of our customer acquisition and retention strategy

RIYADH: When it comes to retail luxury, very few people in the world can match the understanding that Michael Ward, the managing director of Harrods, has of this exclusive market segment.

As the head of the iconic British luxury department store, which attracts 15 million shoppers each year, he undoubtedly occupies one of the most influential and exciting roles in luxury retail.

Since joining the business, Ward has embarked on a program of significant development, enabling Harrods to become the extremely successful retail model it is today.

HIGHLIGHT

he integration of digital experiences with physical stores in Saudi malls was a key theme at the Retail Leaders Circle MENA Summit and with a number of next-generation mall developments currently underway in the Kingdom, international retail will no doubt in the future be learning from how these have incorporated digital technologies and immersive experiences.

He was recently in Saudi Arabia and shared his wealth of knowledge at the 9th edition of Retail Leaders Circle Middle East and North Africa Summit held in Riyadh earlier this month.

The two-day annual event brought together all industry players in the retail sector from international brands to local franchise partners under one roof. In an exclusive interview with Arab News, Ward said the retail sector in Saudi Arabia was fast evolving. 

“The integration of digital experiences with physical stores in Saudi malls was a key theme at the Retail Leaders Circle MENA Summit and with a number of next-generation mall developments currently underway in the Kingdom, international retail will no doubt in the future be learning from how these have incorporated digital technologies and immersive experiences,” he said.




Michael Ward, the managing director of Harrods. (Supplied)

Asked how existing malls in Saudi Arabia can keep pace with the hyper-competitive landscape, Ward replied: “The future of brick-and-mortar retail is experiential – whether that is providing dining or wellness services or the more creative and immersive experiences, all retailers need to be challenging themselves on how they delight and reward the customer in order to remain competitive.

“Innovative collaborations should be considered as they can play an important role in creating first-class experiential retail.”

Personalization is key

Ward went on to say that luxury retailers in the Kingdom who are keen to personalize shopping experiences for individual customers can take a lesson or two from Harrods, which is renowned for the service it offers to its customers, whether that is provided by a member of its team on the shop floor or through its personal and private shopping services. 

“What we are now challenging ourselves on is how do we provide that digitally, whether that is harrods.com or virtual personal shopping services,” he explained. “Our objective is that however they shop, customers always experience the same exemplary and personalized service that they expect of Harrods. This ability to personalize the shopping experience beyond face-to-face interactions is a key challenge for the luxury industry today.”

Reflecting on how the luxury retail sector in the Kingdom can improve the premium shopping experience, Ward said truly understanding customers is essential.

“At Harrods we have invested significantly in the last two years in our Single View of Customer,” he revealed.

 “This allows us to understand a customer’s buying journey from thousands of available data points, allowing us to make strategic decisions and engage with our customers at the right moment, through the most relevant channels and with the most engaging and valuable content, expanding the customer journey and importantly improving the customer experience.”




At Harrods, rewards members gain exclusive access to an array of benefits and earn points as they spend. (Supplied)

With regard to building further value through experience and loyalty, Ward said that Harrods is privileged to have the loyalty of some customers who have shopped with them for their whole lifetime, and who may even be second or third generation patrons. 

“Nurturing loyalty has always been at the heart of our customer acquisition and retention strategy,” he explained. “Today our Harrods Rewards scheme, which has been in place since 2008, plays a big role in winning and keeping customer loyalty.” 

Ward added: “Rewards members gain exclusive access to an array of benefits and earn points as they spend. And three quarters of our trade in 2022 came from Harrods Rewards customers. What this provides is a vast quantity of customer insights allowing us to ultimately provide better experiences for our customers.”  

Key luxury retail trends

Moving forward, what are the key global trends in retail that Saudi Arabia should be ready to embrace? “Looking at luxury retail specifically, we see two trends shaping the industry,” Ward responded. “Firstly, a demand for unique experiences that delight the customer and secondly, a demand for rarity and exclusivity.”

“At Harrods, we have fortunately been well positioned to capitalize on both these trends,” he continued. “Our ever more creative pop-ups and unique brand collaborations mean every visit to the store can still feel like a new experience and secondly, we are able to bring together the rarest items under one roof with sought-after products that are exclusive to Harrods.”

With regard to innovations that could help change the retail landscape in the Kingdom, Ward explained that what machine learning and artificial intelligence can do for retail is a key question being asked by the industry globally, and it will no doubt bring changes in every country.

“At Harrods, we are using machine learning currently as part of our SVC to help analyze immense quantities of data and there will undoubtedly be more and more use cases in the future,” he said.

Talking of shopping habits of Saudi customers at the Harrods store, Ward said most luxury fabrics are extremely popular with their customers from the Kingdom. “We see the rarity and exclusivity of products also act as an important factor in their shopping choices,” he added.

Harrods, which has a longstanding relationship with Middle East customers, continues to shape a vision of modern luxury for generations to come. By all accounts, there is much to learn from this iconic department store as Saudi Arabia sets new benchmarks in luxury retail in the region.


74% of online shoppers prefer local e-commerce over cross-border platforms

Waleed Al-Saud, CEO of Mukatafa
Waleed Al-Saud, CEO of Mukatafa
Updated 03 June 2023

74% of online shoppers prefer local e-commerce over cross-border platforms

Waleed Al-Saud, CEO of Mukatafa

RIYADH: Saudi Arabia’s retail sector is eyeing significant growth on the back of its e-commerce market, as 74 percent of online shoppers in the Kingdom are expected to shift from global to local platforms.
In its recent report, leading global management consulting firm Kearney and Saudi consulting company Mukatafa noted that local and hybrid players are making strong headway against their international counterparts from China, the Gulf Cooperation Council, Europe and the US.
Valued at SR19.3 billion ($5.14 billion), the Kingdom’s e-commerce market is 6 percent of the overall SR347.2 billion retail market. It is expected to further grow to SR34.7 billion to reach 7.5 percent of the overall retail market by 2026, according to the report.
An expanding e-commerce ecosystem will pave the way for innovation, job creation and private-sector growth in line with the Kingdom’s Vision 2030 objectives.

It is a strong sign that local e-commerce businesses are gaining more traction in the market. We must make sure that these businesses are supported to thrive as well as cross-border accounts.

Waleed Al-Saud, CEO of Mukatafa

“This flourishing e-commerce ecosystem empowers citizens to use innovative digital payment options, in line with government initiatives under Vision 2030 to guide private sector investments to provide critical pillars for the sector’s growth, such as increasing cashless transactions and expanding the geographical coverage of e-commerce delivery beyond the Kingdom’s major cities,” said Mohammed Dhedhi, partner at Kearney Middle East.
He added: “The growth of the local and hybrid e-commerce players will contribute to protecting consumer interest and promoting local investments with strong potential for job creation.” The report revealed that cross-border online shopping is expected to generate less income as local and hybrid companies gain traction.

FASTFACTS

• The report noted that local and hybrid players are making strong headway against their international counterparts from China, the GCC, Europe and the US.

• Valued at SR19.3 billion, the Kingdom’s e-commerce market is 6 percent of the overall SR347.2 billion retail market.

Cross-border online shopping is likely to decrease from 59 percent of all e-commerce revenue in 2021 to 49 percent by 2026.
The report noted that more assistance should be provided to create a level playing field for all e-commerce participants, safeguarding consumer interests and encouraging domestic investment.
“It is a strong sign that local e-commerce businesses are gaining more traction in the market. We must make sure that these businesses are supported to thrive as well as cross-border accounts,” Waleed Al-Saud, CEO of Mukatafa, said. He added: “Thresholds on import quantities could be introduced, and local quality standards could be mandated for cross-border players. It is these types of initiatives that will need to be addressed if we are to create a level playing field for all e-commerce players. As it stands, current regulations in the market favor cross-border players, and until that changes, cross-border sales will continue to hold a major share of the e-commerce market compared to local players.”

 

 


‘Women in Tech’ competition brings Saudi female entrepreneurs to the fore

Doaa Aref, CEO of Chefaa
Doaa Aref, CEO of Chefaa
Updated 03 June 2023

‘Women in Tech’ competition brings Saudi female entrepreneurs to the fore

Doaa Aref, CEO of Chefaa
  • Sahm app claims first place and received $25k, Nqoodlet bags second position with a prize of $15k

CAIRO: Going by the success of the “Women in Tech” competition, it is evident that female-led startups are set to revolutionize Saudi Arabia’s technology sector.  

The competition that was recently held in Riyadh saw entrepreneurs undergo an eight-week incubator program, showcasing innovative ideas in various sectors, including fintech, health tech, property tech and edutainment.
In collaboration between global banking group Standard Chartered and Saudi-based investment firm Falak Investment Hub, the program hosted eight startups with the top three being awarded a total of $50,000 in equity-free grants.   

The most significant shift in our landscape in KSA will be the change in sentiment, investment appetite and innovation, says Adwa Al-Dakheel
CEO of Falak Investment Hub

Sahm, a stock trading app, claimed first place and received $25,000. Nqoodlet, a fintech company, bagged second position with a prize of $15,000, and Chefaa, a health-tech platform, secured third place and received $10,000.  
Speaking with Arab News, Jawaher Al-Yahya, the CEO of Sahm, said that the company will continue to optimize and refine its product to achieve the right market fit.  

HIGHLIGHTS

• The competition that was recently held in Riyadh saw entrepreneurs undergo an eight-week incubator program, showcasing innovative ideas in various sectors, including fintech, health tech, property tech and edutainment.

• In collaboration between global banking group Standard Chartered and Saudi-based investment firm Falak Investment Hub, the program hosted eight startups with the top three being awarded a total of $50,000 in equity-free grants.

She further added that women faced difficulty in gaining experience in leadership positions in addition to a lack of funding and resources.  
Sahm will utilize its funding to invest in marketing initiatives to increase brand awareness as well as enhance product capabilities, Al-Yahya reiterated.  
Replying to a question regarding hurdles women in the technology sector are faced with, CEO of Falak Investment Hub Adwa Al-Dakheel attributed the pursuit of perfection as the major barrier for women entering the tech scene.
“Seeking perfection in innovation and startups means not launching in the right market timing and waiting for extreme validation instead of building upon continuous yet smaller validations,” Al-Dakheel told Arab News.  
Doaa Aref, CEO of Chefaa, and Mai Abdulwahab, founder of Nqoodlet, both said that lack of funding is the main barrier for women in tech globally.
Awards were distributed during a special event, under the patronage of the Small and Medium Enterprises General Authority, known as Monsha’at, in the presence of its Deputy Gov. Saud Al-Sabhan.  
Al-Sabhan delivered a speech during the event about the importance of women entrepreneurs stating that Monsha’at contributed to increasing the number of female-led enterprises to more than 467,000.  
“The most significant shift in our landscape in the Kingdom will be the change in sentiment, investment appetite and innovation. Top founders will move to Saudi Arabia to grow and start their businesses here, and the world’s biggest investors will follow,” Al-Dakheel said. 

 


Respite for oil market amid rate hike worries

Respite for oil market amid rate hike worries
Updated 01 June 2023

Respite for oil market amid rate hike worries

Respite for oil market amid rate hike worries
  • Oil markets may have been oversold in the last two trading days, says analyst

RIYADH: Oil steadied on Thursday as a potential pause in US interest rate hikes and the passing of a crucial vote on the US debt ceiling bill were offset by a report of rising inventories in the world’s biggest oil consumer.

US Federal Reserve officials on Wednesday suggested interest rates could be kept on hold this month and the US House of Representatives passed a bill suspending the government’s debt ceiling, improving the chance of averting a disastrous default.

Brent crude futures fell 10 cents, or 0.14 percent, to $72.50 a barrel by 1339 GMT while US West Texas Intermediate crude rose 7 cents, or 0.1 percent, to $68.16. Both benchmarks fell on Tuesday and Wednesday.

“Oil markets may have been oversold in the last two trading days,” said CMC Markets analyst Tina Teng. “Sentiment rebounded amid the debt bill’s passage in the House and (the) Fed’s rate hike pause signal.”

HIGHLIGHTS

Market sources citing American Petroleum Institute figures on Wednesday said that US crude inventories rose by about 5.2 million barrels last week.

• Brent crude futures fell 10 cents, or 0.14 percent, to $72.50 a barrel by 1339 GMT while US West Texas Intermediate crude rose 7 cents, or 0.1 percent, to $68.16.

Mixed demand indications from China, the world’s biggest oil importer, have nonetheless weighed on the market, as has industry data showing a rise in US crude inventories.

Market sources citing American Petroleum Institute figures on Wednesday said that US crude inventories rose by about 5.2 million barrels last week.

“The current mood is one of pessimism,” said Tamas Varga of oil broker PVM. “Investors have been pragmatic and risk averse of late.”

Also in focus is the June 4 meeting of the OPEC+ producer group, in which the Organization of the Petroleum Exporting Countries and allies including Russia will discuss whether or not to cut oil production further.

Barclays forecast

British multinational bank Barclays has slashed the average price of its Brent crude forecast for this year from $92 to $87 a barrel. The bank also slashed its price forecast of Brent for 2024 as it cut the average projected price to $87 a barrel from $97. 

Chinese company in Brazil 

China’s CNOOC Ltd. has begun production at the Buzios5 well off the coast of Brazil, the company said in a statement on Thursday. 

The well is the fifth phase of the Buzios oil field off Brazil’s southeast coast. At an average water depth of 1,900 meters to 2,200 meters, the field is the world’s largest deep-water pre-salt oil field, with daily production of 600,000 barrels, the company said. 

CNOOC’s Brazilian subsidiary owns 7.34 percent of the Buzios shared reservoir, which is 88.99 percent owned by Brazilian state-owned oil and gas company Petrobras.  CNOOC paid $1.9 billion to Petrobras last year to secure a 5 percent stake in a production sharing agreement at the field. 


UAE’s in-country value projects driving billions to local firms

UAE’s in-country value projects driving billions to local firms
Updated 02 June 2023

UAE’s in-country value projects driving billions to local firms

UAE’s in-country value projects driving billions to local firms

ABU DHABI: More than $27.23 billion has been redirected to the local economy since the UAE Ministry of Industry and Advanced Technology (MoIAT) and ADNOC launched major in-country value programs to support domestic industries.

Speaking at the Make in the Emirates Forum, Abdulla Al-Shamsi, Assistant Undersecretary of MoIAT, said more than $14.43 billion of investment was redirected to the local economy last year alone, an increase of 25 percent year-on-year.

“The National In-Country Value Program is a nationwide program that speaks one language across many different sectors,” Al-Shamsi said. “It’s one methodology and this is something we’re very proud of because it benefits the private sector and when the private sector sees this it helps them prepare, invest, and spend.”

The forum heard how the National ICV Program is “functionating well and accelerating.”

The forum also heard how industrial zones are playing a critical role in the in the country’s sustainable industrial development and broader economic prospects. Local industrial leaders described how they are utilizing alternative energy resources such as solar and hydrogen to reduce their carbon footprint.

The second edition of the Make it in the Emirates Forum concluded on Thursday with the UAE showcasing its unique value proposition to international investors.

Investors were invited to explore opportunities and competitive advantages, with panel discussions focusing on the National In-Country Value (ICV) Program, the role of industrial zones, competitive financing as a key enabler and local talent in the private sector.

The UAE’s industrial exports reached $47.6 billion in 2022, growing 49 on 2021. The industrial sector's contribution to GDP rose to $49.5 billion in 2022, a 38 percent increase on 2020.

The Make it in the Emirates Forum is organized by the Ministry of Industry and Advanced Technology in partnership the Abu Dhabi Department of Economic Development (ADDED) and ADNOC.

On the first day of the forum, the UAE government announced $2.7 billion in industrial offtake agreements, building on the $29.9 billion of offtake agreements announced at the 2022 edition of the forum.


Saudi fintech firm secures $3.2m in seed funding

Saudi fintech firm secures $3.2m in seed funding
Updated 01 June 2023

Saudi fintech firm secures $3.2m in seed funding

Saudi fintech firm secures $3.2m in seed funding

RIYADH: EdfaPay, a Saudi-based fintech startup that helps companies use their smartphones for payment, has raised $3.2 million in a seed funding round.

The funding round was led by Sanabil 500 MENA, Nufud Wealth International, Atmiid Investment, Basmah Commercial Investment, and a group of local and international angel investors.

EdfaPay aims to utilize the capital to strengthen its operations in the Kingdom and expand to Pakistan and South American countries.

Founded in 2022 by Ghormallah Alghamdi and Nedal Sabbah, it uses NFC technology to allow companies to collect payments through smartphones.

In February 2022, the firm secured $1.6 million in a pre-seed funding round led by Nuwa Capital, InspireUs VC, and Wallan Investment Group.

The fintech channeled its acquired funds into launching its financial services across the Kingdom and supported its market-entry efforts.

The Kingdom’s fintech investments reached $400 million in 2022, recording a 79 percent increase compared to 2021.

The Saudi Central Bank, also known as SAMA, is one of the country’s key players in enabling fintech across all subsectors.

Earlier this week, SAMA granted licenses to Spotii and Madfu, two fintech companies that aim to offer consumer financing options.