Enhanced economic integration between Arab countries is essential, says Saudi finance minister
Speaking on the sidelines of the Arab League Summit in Jeddah, Mohammed Al-Jadaan highlighted the Kingdom’s efforts to ensure conditions are right for economic stability in the region
Updated 20 May 2023
Arab News
JEDDAH: Saudi Minister of Finance Mohammed Al-Jadaan said on Friday that a series of global crises have highlighted the importance of economic integration among Arab nations, the necessity for increased cooperation, and the need for the development of sustainable economic and financial models.
He said that such measures would help to enhance resilience in the Arab world in the face of the challenges and risks it faces, the Saudi Press Agency reported.
He was speaking on the sidelines of the 32nd Arab League Summit, which was hosted in Jeddah by the Kingdom, and during which Syria and its president, Bashar Assad, were welcomed back to the organization after a 12-year suspension.
Al-Jadaan welcomed Syria’s return to the Arab League, and highlighted Saudi Arabia’s commitment and efforts to ensure conditions are conducive for economic stability in the region, including the launch multiple initiatives and programs in support of Arab cooperation.
He also talked about the Kingdom’s collaboration with Arab Coordination Group institutions to help enhance food security, including a financial support package worth more than $10 billion to address this important issue.
The minister noted his country’s dedication to efforts that address debt challenges, through the launch of the Common Framework for Debt Treatments. The framework, approved by the G20 leaders during the organization’s summit in Riyadh in 2020, stands as the sole internationally agreed mechanism for restructuring the debt of countries facing repayment difficulties.
Al-Jadaan also highlighted the Kingdom’s humanitarian and development assistance in support of developing countries, especially those in the region, and noted that Saudi Arabia ranks first globally in terms of such support, according to data from the Organization for Economic Cooperation and Development.
He expressed his hope that enhanced collaborations between member states can advance pan-Arab economic and social integration, underscoring the importance of continued progress in this field.
Prince Fahad bin Mansour Al-Saud represents Saudi Arabia at G20-Startup20 engagement group
Al-Saud expressed his gratitude to King Salman and Crown Prince Mohammed bin Salman for the exemplary support they provide to entrepreneurs.
“Today we witness the impact of this support on the entrepreneurship system in the Kingdom. This has resulted in accelerated growth in our national economy,” he said.
Updated 04 June 2023
Arab News
RIYADH: Prince Fahad bin Mansour Al-Saud has been chosen to represent Saudi Arabia in the G20-Startup20 engagement group, the Saudi Press Agency reported on Saturday.
Launched earlier this year under the Indian Presidency of G20 2023, the Startup20 engagement group is one of 11 official networking groups.
Al-Saud expressed his gratitude to King Salman and Crown Prince Mohammed bin Salman for the exemplary support they provide to entrepreneurs.
“Today we witness the impact of this support on the entrepreneurship system in the Kingdom. This has resulted in accelerated growth in our national economy,” he said.
Having been appointed to represent the Kingdom due to his extensive entrepreneurial experience, Al-Saud stressed the importance of Saudi Arabia’s participation in the Startup20 official group summit.
“The Kingdom is a leading country in entrepreneurship and an enabler for startups under Vision 2030, which aims to raise small and medium enterprises’ contribution to GDP from 20 percent to 35 percent,” he said.
The chair of the board of directors of the Saudi Entrepreneurship Vision, Al-Saud said that the Startup Summit in India was an opportunity to exchange creative and innovative ideas, find strategic partnerships and investment opportunities, and learn about the experiences of the G20 countries, in addition to promoting the projects of Saudi entrepreneurs.
The group is distinguished as the first official group specialized in emerging companies, which are considered the most critical engines of economic growth and sustainable development, according to SPA’s report.
The group seeks to communicate the voice of the global start-up system through the G20 countries, and recommendations will be developed to be formally submitted to the G20 leaders for consideration.
Outreach groups are independent collaborative groups led by civil society organizations in the host country each year.
Al-Saud has founded several companies in various fields. He holds a bachelor’s degree in entrepreneurship from Loyola Marymount University, Los Angeles, California.
PIF’s joint venture with Ma’aden to help establish mining sector: top official
There is ‘as much as $1.3 trillion in untapped resources sitting under the ground in the country’
Updated 03 June 2023
Reina Takla Nirmal Narayanan
RIYADH: With metals and mining being identified as one of the 13 strategic sectors to focus on to achieve the goals outlined in Vision 2030, the Kingdom’s sovereign wealth fund’s joint venture with Saudi Arabian Mining Co., also known as Ma’aden, will help unlock the potential of the mineral wealth in the nation, a top official said.
In an interview with Arab News, Mohammed Aldawood, head of industrials and mining sector for Middle East and North Africa investments at the Public Investment Fund, said that the joint venture will help to establish the mining sector as the third pillar of the Kingdom’s economy, along with providing an opportunity to explore new territories.
“We (PIF) plan to support the growth of mining as a key enabler of this mission to help establish the industry as the third pillar of the economy. Saudi Arabia is fortunate to be endowed with healthy mineral reserves that are currently underexplored. We estimate that there is as much as $1.3 trillion in untapped resources sitting under the ground in the country,” said Aldawood.
He added: “This is a really exciting development that is going to give the PIF and Ma’aden an extensive international footprint in the mining space. It’s going to give the partners a platform to access minerals not available in Saudi Arabia and gives us an opportunity to move into new geographical territories.”
It was in January that Ma’aden and the PIF agreed to form a joint venture to invest in mining assets globally.
Ma’aden will own 51 percent of the venture while the PIF will own 49 percent.
The new venture’s strategy will initially focus on investing in iron ore, copper, nickel and lithium as a non-operating partner taking minority equity positions.
Mohammed Aldawood, Head of industrials and mining sector for Middle East and North Africa investments at PIF
Aldawood said that the new venture’s strategy “will initially focus on investing in iron ore, copper, nickel and lithium as a non-operating partner taking minority equity positions.”
“When we commence the partnership, the company’s paid-up capital will amount to $50 million and we will review that as operations grow. We have agreed if additional funding is required, both PIF and Ma’aden will fund the new company up to $3.12 billion,” he added.
Rising demand for critical minerals
Aldawood also talked about the growing electric vehicle market segment where the demand for critical minerals is growing, amid insufficient investments globally by mining firms.
Citing consultancy firm Wood Mackenzie, Aldawood said that mining companies will need to invest nearly $1.7 trillion over the next decade to accelerate the shift to a low-carbon world.
The PIF official further said that the fund will work with large mining companies and trading houses in developing projects to address the acute shortage of future minerals as the world undergoes an energy transition where demand for critical minerals will rise sky-high.
“Through our JV with Ma’aden and our combined skills sets and knowledge of the industry, I am confident that we will play a role in the critical minerals supply response for the EV value chain. We’ll work with large mining companies and trading houses in developing projects that address an expected acute shortage in future minerals and ensure that Saudi Arabia retains a leading position,” Aldawood added.
HIGHLIGHTS
• The official discussed the growing electric vehicle market segment where the demand for critical minerals is growing, amid insufficient investments globally by mining firms.
• Citing consultancy firm Wood Mackenzie, he said that mining companies will need to invest nearly $1.7 trillion over the next decade to accelerate the shift to a low-carbon world.
• The PIF official said the fund will work with large mining companies and trading houses in developing projects to address the acute shortage of future minerals.
According to Aldawood, the PIF is committed to bringing core mining projects to life, supplying the world with critical minerals, and helping to meet decarbonization targets at the same time.
“The PIF has all the right attributes to be successful in this journey. We have access to capital and the appetite to invest globally and across the life cycle of an asset,” he said.
JV with Baosteel and Saudi Aramco
In May, the PIF, Saudi Arabian Oil Co. and China-based Baoshan Iron & Steel Co. signed a shareholders’ agreement to establish an integrated steel plate manufacturing complex in the Kingdom.
Aldawood said that this new facility will be the first of its kind in the Gulf Cooperation Council region, and will help advance the regional steel industry ecosystem.
“The project aims to enhance the domestic manufacturing sector through localizing the production of heavy steel plates, transferring knowledge and creating additional export opportunities. It’s a significant investment and a vital development for the industry,” Aldawood noted.
This JV complex is expected to be located in Ras Al-Khair Industrial City, and the facility would have a steel plate production capacity of up to 1.5 million tons per year.
According to Aldawood, this investment decision has been made to significantly reduce the reliance on imported steel and to serve more customers in several strategic industrial sectors including pipelines, shipbuilding, rig manufacturing, offshore platform fabrication plus tank and pressure vessel manufacturing.
“As with our investment in the mining sector, the investment aligns with the PIF’s strategy to unlock the capabilities of promising sectors and strategically important industries that can drive diversification of the local economy,” Aldawood concluded.
DUBAI: Shared mobility is gradually gaining a foothold in the Gulf Cooperation Council region as the automobile industry predictably joins other sectors in adapting to the sharing economy.
Whether it is renting out office space, an Airbnb vacation home, or a fancy dress for a special occasion, more people around the world are embracing the concept of sharing resources and services as opposed to owning them.
Companies are also changing their business models by leveraging the ongoing shift to a sharing economy and the transport sector is no exception.
In fact, the number of users in the car-sharing segment worldwide is likely to grow to 62.11 million by 2027, according to a report issued by Germany-based data-gathering platform Statista.
In the GCC, companies such as Udrive and ekar have dominated the car-sharing space providing customers with an alternative to the existing rental options in cities such as Dubai, Abu Dhabi, and Riyadh.
“There’s a lot of demand for the product,” said Nicholas Watson, the co-founder, and CEO of Udrive, a car-sharing provider in the region.
“The methodology or business model that car-sharing represents, is a fully digital experience with no human interaction. And through that, you streamline access to the vehicles,” which can then be parked anywhere in the city, he said.
With a fleet of 1,000 cars in the UAE mainly Abu Dhabi, Dubai, and Sharjah, Udrive charges customers 1-2 dirhams ($0.27-$0.54) per minute with several options for daily rates.
The car-sharing platform recently launched its operations in the Saudi capital Riyadh with plans to expand its fleet to 1,000 cars by the end of 2023.
It also plans to launch a 1,000-strong fleet of electric vehicles in the next 18 months in Dubai but have similar plans for the Kingdom in near future.
The car-sharing option will also help mitigate the effects of climate change as according to a World Bank report the transportation sector is a major source of emissions accounting for close to 20 percent of the world’s total greenhouse gas emissions.
European statistics show that every car shared removes 17 vehicles off the road, said Udrive CEO.
“That’s where sustainability comes in with car-sharing, we are fractionalizing car rental itself and we are making it available to everybody by the minute,” Watson added.
Reports show that an average passenger car sits idle for 22.5 hours per day. “The key is that the more people become aware that you can rent a car through your mobile phone, open the car through your mobile phone, and drive wherever you want, and end the trip wherever you want,” he told Arab News.
The majority of clients in this region are expatriates, who typically prefer vehicle subscriptions over simply sharing a car from point A to point B. — Soham Shah, CEO of Selfdrive.ae
Unlike rental companies, car-sharing covers all costs for petrol, parking, and insurance without requiring customers to put down any deposit amount or worry about minor damage.
In case of an accident, customers must obtain and submit a police report, as per the law, with all damages covered under comprehensive insurance.
“It removes all the barriers of entry for people who normally wouldn’t be able to rent a car,” many of which fall in the middle to lower-income bracket, also considered the largest mobile and working population, said Watson.
Reports by Statista show the car-sharing segment in Saudi Arabia is projected to grow by 7.54 percent in the next five years with the market volume expected to reach $148.60 million in 2027.
In the UAE, the segment is projected to grow by 5.6 percent during the same period with the market volume likely to hit $102.60 million in 2027.
“When you look at these cities, it’s more about population density and the distances (covered) in average travel,” said Watson.
For example, Dubai is a city with horizontal highways such as Emirates Road and Sheikh Zayed Road, which extend from one end of the emirate to the other.
It consists of areas with huge vertical infrastructures and a high density of people per 100 sq. meters looking to move from one area to another.
We have observed a trend where individuals are moving away from traditional car ownership, and instead are opting for longer-term rentals to meet their needs. — Vilhelm Hedberg, Founder of ekar
This makes Dubai an ideal place for car-sharing, says Watson, whereas Abu Dhabi follows a grid-based system resulting in less congested areas.
“Car-sharing is indeed gaining significant momentum in the Middle East,” said Vilhelm Hedberg, founder of ekar, a self-drive mobility platform.
He pointed to a twofold year-on-year increase in user registrations and usage over the last three years on the platform.
According to him, the shift in consumer behavior is due to several factors, including a higher demand for environmentally friendly urban mobility options, which are affordable, convenient, and flexible at the same time.
HIGHLIGHTS
• More people around the world are embracing the concept of sharing resources and services as opposed to owning them.
• Companies are changing their business models by leveraging the ongoing shift to a sharing economy and the transport sector is no exception.
• The number of users in the car-sharing segment worldwide is likely to grow to 62.11 million by 2027, according to a report issued by data-gathering platform Statista.
“The prices for chauffeur-driven alternatives have increased, making car-sharing a more attractive and cost-effective option,” said Hedberg
He believes, the increase in the adoption of car-sharing services is partly due to the COVID-19 pandemic, which prompted a shift away from public transportation.
“We have also observed a trend where individuals are moving away from traditional car ownership, and instead are opting for longer-term rentals to meet their mobility needs,” he said.
In response to this demand, ekar has recently introduced subscription leasing, offering flexible rental options ranging from 1 to 9 months with a door delivery service.
Similarly, Soham Shah, CEO of Selfdrive.ae, a car rental and monthly subscription platform, believes there is a growing acceptance of car subscription programs, particularly among expatriates residing in the Gulf countries.
According to him, subscription services are especially attractive to individuals who seek a personalized mobility experience but are unable to purchase a car immediately upon arrival in the country.
We are fractionalizing car rental itself and we are making it available to everybody by the minute — Nicholas Watson, Co-founder and CEO of Udrive
“Whether they are in the process of settling down or are aware of a certain timeframe before making a buying decision, they require monthly mobility solutions,” he said.
“The majority of clients in this region are expatriates, who typically prefer vehicle subscriptions over simply sharing a car from point A to point B,” Shah added.
He also described the GCC taxi market as “well-established, highly regulated and maintained,” pointing out that there is a strong inclination toward using local taxis or opting for services like Uber that offer car-sharing.
However, Shah believes the future of mobility in the GCC lies in a sustained ecosystem of on-demand mobility that provides a car-ownership experience without the need for purchasing a car.
The subtle shift in the automobile industry coincides with the region’s increased attention toward combating climate change and its unified vision to create smarter, greener transportation systems.
By providing individuals with convenient access to transportation without the need for private vehicle ownership, car-sharing promotes a shift toward “a more sustainable and environmentally conscious lifestyle,” said Hedberg.
There is no doubt that sharing mobility offers more efficient utilization of vehicles, reducing the number of cars on the road, he added.
Dubai’s YallaHub gears up to expand presence in Saudi Arabia
The company has set its strategy on Gulf expansion with Saudi Arabia being the primary market: CEO
Updated 03 June 2023
Nour El-Shaeri
CAIRO: Seeking to explore the immense growth opportunities in Saudi Arabia, Dubai-based e-commerce facilitator YallaHub launched a full-throttle expansion plan to enter the Kingdom’s burgeoning market by the second quarter of 2023.
Founded at the end of 2022, YallaHub is a marketplace aggregator and digital distributor that enables brands to scale their e-commerce businesses on a regional and global level.
In an interview with Arab News, Leo Dovbenko, CEO and co-founder of YallaHub, said that the company has set its strategy on Gulf expansion with Saudi Arabia being the primary market.
“Saudi Arabia’s expansion presents a significant growth opportunity for YallaHub. By entering the Kingdom, YallaHub will tap into its large consumer base, leverage the country’s favorable economic conditions, utilize well-developed infrastructure, and establish strategic partnerships,” Dovbenko said.
The CEO announced that YallaHub, with its ambitious objectives, has initiated its expansion process and is set to officially commence operations in Saudi Arabia by mid-summer 2023.
High aspirations
YallaHub reaffirmed its commitment to the Saudi market, by setting ambitious objectives to position the Kingdom at the epicenter of innovation.
“First and foremost, we’re dedicated to helping ‘Made in Saudi’ brands gain worldwide recognition, fostering their growth, and expanding their reach across new markets,” Dovbenko said.
He also highlighted that YallaHub’s support has the potential to help over a million small and medium enterprises escalate their presence regionally and globally.
“Secondly, women are the majority of our clients, wanting to start a simple online business. We are developing educational support to help them,” he said.
“We are committed to empowering female entrepreneurs in the Kingdom, unleashing their potential in the realm of e-commerce. Our all-in-one solution offers a seamless and comfortable platform for boosting e-commerce sales, encouraging women to confidently navigate the digital landscape and achieve success,” Dovbenko added.
YallaHub aims to foster Saudi’s e-commerce growth by offering a comprehensive solution to significantly aid SMEs.
“YallaHub supports the government’s Vision 2030 agenda of increasing the number of SMEs, expanding the geographical coverage of e-commerce delivery beyond the Kingdom’s major cities, and creating a thriving entrepreneurial ecosystem in Saudi Arabia,” Dovbenko said.
He further added that the company’s mission aligns perfectly with Vision 2030’s goal to encourage more women to enter the business world. “YallaHub’s solutions will allow SMEs to scale up operations across the Middle East and North Africa markets and expand globally through various sales channels simultaneously. This, in turn, can lead to overall growth in the Kingdom’s e-commerce sector, increase exports and create a more thriving entrepreneurial ecosystem,” Dovbenko explained.
“Our ultimate goal is to eliminate boundaries for ambitious entrepreneurs who produce innovative products, allowing them to reach new markets without limits,” he added.
By entering the Kingdom, YallaHub will tap into its large consumer base, leverage the country’s favorable economic conditions, utilize well-developed infrastructure, and establish strategic partnerships.
Leo Dovbenko, CEO and co-founder of YallaHub
Dovbenko highlighted that YallaHub’s principal mission is to address the hurdles encountered by businesses during online expansion. He stated that the company is dedicated to eliminating “any obstacles” to regional growth.
With one foot already in the market, YallaHub has sealed five agreements with brands seeking expansion outside the Kingdom, while onboarding 30 brands aspiring to penetrate the Saudi market.
“YallaHub is in partnership negotiations with the Ministry of Investment, the Ministry of Commerce, and the Small and Medium Enterprises General Authority, also known as Monsha’at,” Dovbenko added.
The company is currently opening a local office in Riyadh and is looking to hire an on-ground team.
“We see many companies that want to expand out of the Kingdom and companies who want to enter this market. Our Saudi office will work in both directions, and this will help us to grow faster,” he added.
YallaHub offers an extensive array of products designed to dismantle any scalability hurdles facing e-commerce businesses.
The company offers registration and licensing services, export and import assistance, storage and fulfilment, super-fast delivery, marketing, e-commerce setup and payment gateway rent.
YallaHub’s primary target market comprises countries in the Gulf Cooperation Council which include Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE.
HIGHLIGHTS
• The company offers registration and licensing services, export and import assistance, storage and fulfillment, super-fast delivery, marketing, e-commerce setup and payment gateway rent.
• YallaHub’s primary target market comprises countries in the GCC which include Saudi Arabia, Bahrain, Kuwait, Oman, Qatar, and the UAE.
• Dovbenko elaborated on YallaHub’s strategy to harness the GCC market’s strong purchasing power, favorable economic climate, financial resilience, affordable labor and delivery expenses, urbanized populace and tech-inclined youth.
Dovbenko elaborated on YallaHub’s strategy to harness the GCC market’s strong purchasing power, favorable economic climate, financial resilience, affordable labor and delivery expenses, urbanized populace and tech-inclined youth.
By the end of 2023, the startup aims to attract over 100 brands from all markets and reach $10 million in annual recurring revenue.
“Since its launch in late 2022, YallaHub has introduced over 45 brands into the UAE market including cosmetics and perfumery, personal care, beauty goods and accessories, food and beverage, dietary supplements, home care, small electronic devices, pet products and others,” Dovbenko added.
He also revealed that YallaHub’s grand plan includes expanding across the entire GCC region by 2025. The expansion for this year encompasses the UAE, Saudi Arabia and Qatar, while Oman, Kuwait and Bahrain are on the company’s radar for 2025.
Dovbenko, a seasoned entrepreneur, had previously co-launched YallaMarket, an online grocery marketplace, prior to YallaHub. His earlier venture managed to attract $12 million in funding from regional investors.
He shared that YallaHub intends to secure $5 million in a series A funding round this summer.
74% of online shoppers prefer local e-commerce over cross-border platforms
Updated 03 June 2023
Arab News
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.”
