Saudi Arabia in top 2 among G20 in ICT development for 2nd consecutive year
Updated 16 July 2024
Arab News
RIYADH: Saudi Arabia has maintained second place among G20 countries in a UN ICT Development Index, highlighting the resilience of the Kingdom’s digital infrastructure.
Published by the international organization’s International Telecommunication Union, the ranking tracks the digital development and progress of 170 nations in information and communication technology services through sub-indicators divided into two axes: inclusive and effective communication.
It also measures the strength of digital infrastructure, according to a statement.
The analysis also revealed that the Kingdom ranked first among the G20 countries in the effective communication axis and second in the inclusive communication axis, according to the Saudi Press Agency.
The Kingdom’s Communications, Space, and Technology Commission indicated that Saudi Arabia’s continuous advancement in the index underscores the robustness of its digital infrastructure and its role in propelling the growth and expansion of the digital economy and attracting investment, the SPA report noted.
This comes as the Kingdom’s communication and technology market is the largest and fastest growing in the Middle East and North Africa region, with an estimated value of SR166 billion ($44.2 billion).
Moreover, the rate of mobile subscriptions in Saudi Arabia has surpassed 198 percent of the population, while the average monthly data consumption per citizen is three times higher than the global average.
In May, a report from Saudi Arabia’s Digital Government Authority revealed that the country witnessed a 20 percent year-on-year increase in government spending on information and communications technology in 2023, reaching SR41.87 billion.
The study released at the time indicated that the increase in spending has contributed to enhancing the efficiency of digital government services and improving the experience of beneficiaries.
Additionally, the analysis highlighted at the time that the investment had a positive impact on the digital economy, marking a milestone in the Kingdom’s transformation journey.
“ICT spending is one of the supporting factors for innovative and flexible solutions that we aspire to provide to all citizens and residents of Saudi Arabia, ensuring the effectiveness of the immense human wealth that populates the country and achieving a high quality of life,” Faisal bin Ahmed Bakhshwin, deputy minister for digital transformation at the Ministry of Human Resource and Social Development said at the time.
Riyadh airport to revolutionize retail with major expansion: official
Updated 40 sec ago
Nadin Hasssan Miguel Hadchity
RIYADH: Saudi Arabia is set to elevate the retail experience at King Khalid International Airport in Riyadh by expanding its duty-free offerings and upgrading infrastructure to better serve passengers.
This was announced by Abdullah Al-Salem, general manager of Commercial Business Development at Riyadh Airports Co., during a panel discussion at the Retail Leaders Circle Global Forum in Riyadh on Wednesday.
Recognizing the importance of enhancing passenger experience, Al-Salem revealed: “We’ve expanded the duty-free area by 180 percent, increasing the number of SKUs (stock-keeping units) from 4,000 to 10,000. We’ve also become the first airport in the region to introduce an on-arrival duty-free store.”
The official also highlighted ongoing expansion efforts at the airport, including the construction of two new piers—A and H—which will extend terminals 1 and 4.
Al-Salem emphasized that the expansion of terminals 3 and 4, completed last year, has led to a significant boost in retail sales. “We’ve seen sales more than triple compared to previous years,” he said.
Riyadh Airports Co. has also emerged as a leader in post-pandemic retail recovery.
“We were the first airport to recover in terms of retail sales after the pandemic,” Al-Salem noted.
He pointed to the expansion of retail space in terminals 1 and 2, which has nearly doubled in size from 1,100 sq. meters to 2,400 sq. meters, attracting high-end brands.
“We now have a much better understanding of our customers,” Al-Salem added. “Passenger behavior is different from that of mall customers,” and the airport teams have developed the expertise needed to cater to their specific needs.
The panel also featured Umair Ansari, senior vice president and general manager of travel retail for Europe, the Middle East, and Africa at The Estee Lauder Companies.
Ansari discussed the evolving nature of luxury and shifting consumer preferences. “Luxury is not one-size-fits-all,” he said, emphasizing the need to understand what luxury means to individual travelers.
He also discussed the role of digitization in transforming the travel retail experience: “When you start with digitization in mind, you travel differently. We can now engage with passengers before, during, and after their journey, making the entire experience more seamless.”
Ansari also touched on the growing influence of Gen Z consumers, who make purchasing decisions based on emotions rather than product features. “If you tap into their emotions, you can create a strong connection,” he said.
Apparel Group boosting its presence in fast-growing Saudi retail sector: CEO
Updated 26 min 3 sec ago
Reina Takla Miguel Hadchity
RIYADH: UAE-based Apparel Group is strengthening its presence in Saudi Arabia’s retail sector through strategic partnerships and expansion as the Kingdom experiences a surge in new mall developments.
Speaking to Arab News on the sidelines of the Retail Leaders Circle Global Forum in Riyadh, the CEO of the group, Neeraj Teckchandani, highlighted the company’s commitment to growth in the Saudi market.
“There are a lot of the landlords over here and partners with whom we work. So we signed a MoU yesterday with Point, the new mall from the Red Sea Mall group, which is coming in the sea region where we have taken a significant position. And, there is another one which we are signing this afternoon at Mall Of Dhahran,” Teckchandani said.
He highlighted the company’s strategy of expanding through partnerships with mall developers. “These are all strategic partnerships which we work with these landlords. And whenever there is a new mall coming, we will take a larger position over there. And those are the MoUs we have signed. So we have signed two of them, Mall Of Dhahran as well as Point.”
The Kingdom’s retail sector is undergoing a transformation, with significant investments in mall developments. “There are about 30 malls which are coming in Saudi over the next five years. I don’t think that any other Gulf country has got that number of malls coming up or even combined.”
The CEO added: “Saudi is evolving, we have avenues in Riyadh coming. We have a lot of malls coming from Cenomi Centers and so on. So, for us, the growth potential is huge in Saudi. Last year, of the 250 stores that we opened in the Gulf, nearly 150 were in Saudi Arabia.”
The company is increasingly expanding its brand portfolio and footprint in the Kingdom. “So in terms of the investments, there is a lot. We signed about 28 new brands last year. We took over from other operators like Cenomi Retail or Alyasra or AlMalki or Landmark Group Saudi Arabia branch, some across the region, some Saudi specific. So, we did that for eight of the brands. So we have a lot of expansion that way,” Teckchandani said.
The top official added that Apparel Group is set to open close to 300 stores in the region, and Saudi Arabia would be home to around 180 to 200 of them. “So big expansion plans, and we are also putting a lot of the investments into the hard infrastructure. So we are building a new distribution center in Dubai, and a new one in Qatar. And we have just finished the one in Saudi.”
He also underlined the importance of preparing for future retail demands. “We have so much expansion coming in the next three to five years in Saudi Arabia. So we are investing a lot in terms of infrastructure, hard, whether it is a distribution center or device or the soft, we’re putting the retail academy, upskilling the talent and so on for the growth that we’re in charge of over the next couple of years.”
According to Teckchandani, the evolution of the retail sector in the Kingdom presents numerous possibilities: “I think a lot of opportunities that way, as I mentioned, over 30 malls coming in the region gives huge opportunities.”
He added: “Saudi lacks mega malls like a Dubai mall or an Avenues Kuwait. So we will see the first one with Avenues Riyadh coming up that will lift the level of retail to the next level.”
While the retail sector faces some challenges, Teckchandani does not see major threats apart from geopolitical factors.
Apparel Group is also focusing on omnichannel integration to enhance customer experience. “Today, for all the major retailers, it’s an omni channel, and so all of them are offline and online as well.”
The CEO added: “All of our 2,000-plus stores, our 14 brand.coms and 61 marketplaces are seamlessly connected. I have a single view of inventory and this is available everywhere.”
As part of its expansion, the company has signed multiple brands across fashion, beauty, home, and food and beverage, including Koton, Sur La Table, Estée Lauder, and Allo Beirut. “So, in every segment, we have signed new brands. Some have already opened in Saudi Arabia, while others are in the phase of opening.”
Understanding and adapting to consumer trends is key to long-term success in the retail industry, according to Teckchandani: “I think you always have to see the relevance and you always have to remain relevant for your customer because you have to understand what the customer wants.”
He added: “You can get the initial hype because of the brand power, but if you don’t remain relevant or don’t hear your customer’s voice, you will be left out. I mean, the customer will move on and we have seen this with so many brands who left the region.”
Looking ahead, Teckchandani sees experiential retail as the next major trend shaping the sector. “Whether it’s retail or F&B, it has to be more experiential, you cannot be just transactional or selling a commodity. Gone are the days when you were just selling a piece of gummy or a footwear.”
The top official emphasized that digital elements and an omnichannel experience at the store are necessary.
While an initial public offering is on Apparel Group’s horizon, it is not an immediate priority. “Early days for us, I would say, definitely there are plans in the medium term, but not in the near term. We will be looking at something in the range of three to five years from today,” the CEO said.
Saudi Arabia’s retail market driven by youth, digital growth: experts say
Updated 55 min 26 sec ago
Nadin Hassan
RIYADH: Saudi Arabia’s retail sector is undergoing a significant transformation, driven by a digitally savvy young population, increasing consumer confidence, and shifting spending habits, according to a senior executive.
In an interview with Arab News at Retail Leaders Circle in Riyadh, Abdellah Iftahy, senior partner at McKinsey and Co., said that 75 percent of retail spending will come from Saudi youth by 2035.
“The consumer of tomorrow is not the one that we see today, and that will actually quite dramatically shape and shake the retail industry,” Iftahy said.
He continued: “Brands not relevant to today’s youth may struggle to compete. A key consumer trend is the rising importance of value for money, driven by a growing middle class in Saudi Arabia. This will shape the retail industry with a focus on mass-market, value-for-money offerings.”
Iftahy noted that Saudi Arabia’s e-commerce market is expected to grow significantly, with one in four retail transactions happening online by 2035.
This growth will be driven by increasing digital adoption, rising disposable income, and evolving consumer preferences within the Kingdom.
“Consumers are digitally savvy, and the young population actually transacts much more, both in terms of brand discovery but also in terms of clothing, if you will, to purchase online. E-commerce will continue to become a fast-growing channel going forward,” Iftahy said.
He mentioned that food service would be another growing channel, with significant investments expected in entertainment, hotels, hospitality, and restaurants. This, he added, would ultimately boost the food service sector for distributors supplying these outlets.
Echoing these sentiments, Karl Nader, partner and managing director at AlixPartners, pointed out that while consumer sentiment in the US and Europe is expected to decline in 2025, the Kingdom remains an exception.
“This is coming from a few areas. We’re increasing spend in grocery. But actually, within grocery, we expect Saudi consumers, what the data is telling us, is that there is a shift toward more value-added products, value-driven products, more discounters, private labels, and so on,” Nader said.
As a result, consumers are adjusting their financial habits to rebalance their budgets.
Karl Nader, partner and managing director at AlixPartners. AN photo by Loai El-Kellawy
Nader also stated that the increase in Saudi consumer spending on dining out and entertainment reflects strong consumer confidence, or short-term factors like post-pandemic recovery and government stimulus.
One reason for this increased spending is the greater availability of entertainment options, driven by government and Public Investment Fund-backed projects that are expanding the sector.
Luxury and e-commerce
While budget-conscious spending is increasing, the luxury retail sector is also set for expansion, with international brands looking to establish a stronger presence in Saudi Arabia.
“Fundamentally, retail is about demand, and if demand grows with population and expats coming, we see all of the subsectors benefiting from that,” Iftahy said.
He added: “I think some of the subsectors that may grow faster would be luxury, because what we see today is there is a lot of spend from Saudis outside of Saudi. So, if supply comes in, we expect this to grow at a higher rate than the rest of the industry.”
Iftahy went on to say that everything related to entertainment and hospitality is growing because people have been spending more time outside of their homes, and that trend is expected to continue.
The evolution of Saudi Arabia’s retail industry is also changing the role of traditional retail spaces.
Challenges vs. opportunities
Despite the opportunities, retailers in Saudi Arabia face key challenges, including rising operational costs, workforce productivity gaps, and the need for digital transformation.
“The productivity levels in Saudi retail are lower than global standards,” Iftahy noted. “Retailers must improve efficiency, leverage consumer data, and explore adjacent market opportunities.”
Additionally, the changing role of women in the workforce is influencing consumer behavior. “With more Saudi women working and managing careers, retailers need to rethink their engagement strategies,” Nader said.
Sustainability and ethical consumerism are also gaining traction among younger Saudi shoppers. “Brands that demonstrate a commitment to sustainability — through eco-friendly packaging, ethical sourcing, and corporate responsibility — will have an edge in building long-term customer loyalty,” Iftahy added.
Retail growth
Despite economic uncertainties in global markets, both Nader and Iftahy agree that Saudi Arabia’s retail sector is poised for continued growth.
“I think the Saudi market across the different sectors is still growing, and there are a lot of opportunities for growth that can be captured by local or international players,” said Iftahy.
“I would say the international players that have a value proposition and products that are differentiated and bring additional value to consumers have higher chances of winning.”
He highlighted that Saudi Arabia offered growth opportunities across consumer and retail segments, with the greatest potential for international brands offering unique products or value propositions.
As Vision 2030 continues to drive economic transformation, experts believe that businesses that embrace e-commerce, data-driven strategies, and experiential retail will thrive, while those that fail to adapt will struggle in an increasingly competitive market.
Saudi retailer Panda plans over 20 store openings in 2025, says COO
Updated 31 min 39 sec ago
Nadin Hassan Reem Walid
RIYADH: Saudi Arabia’s Panda Retail Co. is set to open more than 20 new stores in 2025, maintaining its pace of expansion from the previous year, according to the company’s chief operating officer.
Speaking to Arab News at the Retail Leaders Circle Global Forum 2025 in Riyadh, Abdullah Al-Sabban said the company’s focus this year will be on expanding within Saudi Arabia, particularly in Riyadh and remote areas.
Panda’s expansion supports its goal of sustainable retail growth through innovation while highlighting the resilience of Saudi Arabia’s retail sector, which recorded SR37.4 billion ($9.97 billion) in sales in the third quarter of 2024 despite global economic challenges.
Retail sales in the Kingdom are forecast to reach $161.4 billion by 2028, while the e-commerce sector is projected to exceed $13.2 billion by 2025, according to data platform Statista.
“Our theme for this year is ‘expanovation.’ Expanding the sites, stores, and locations is very important. But we’re more focused on Saudi Arabia right now, more focused on Riyadh, and more focused on remote areas. We want to make sure that everybody deserves to have a Panda experience across the Kingdom,” Al-Sabban said.
Self-funded growth
Al-Sabban clarified that the company does not require external funding for its current expansion plans.
“When you’re talking about 20 stores a year, that’s not an area where you need to go and find funding and support,” he said.
“We want to ensure sustainable growth. We want to make sure we have the right number and continue growing at the same trend that we’ve been growing over the last year or two.”
He noted that securing funding would only be necessary if the company aimed to double in size.
“Today, we’re running at 200 plus stores. If you told me I want to grow to 400 in a year, then yes, we need to get a huge amount of money. But I think it has to be organic growth. You can’t just go and expand because if we expand all our stores, we also need to expand our supply chain, logistics, commercial operations, and trucks,” he said.
“We need to make sure that we don’t face failure as we expand in a very dramatic way. So, for now, we are going to keep it smooth and steady to ensure the right sustainability going forward,” he added.
Regarding a potential initial public offering, Al-Sabban said Panda is still assessing the right time and approach for such a move.
“IPO is a very critical situation, and it’s not easy to answer that, especially since we’re part of a bigger group in Savola. There are some thoughts, but we’re still discussing, negotiating, and understanding what would be the right time and approach for something like that,” Al-Sabban said.
He said that going public is challenging and timing is key, emphasizing the need to ensure that an IPO is the right move for the organization.
Market positioning
In addition to opening new locations, Panda is investing in upgrading its existing stores through its customer experience and innovation program called CXR.
He added: “We are running both projects simultaneously, ensuring we improve our existing stores while opening new ones. Hopefully, by the end of the year, we will have opened more than 20 stores in new locations.”
Addressing competition in the Saudi retail sector, Al-Sabban emphasized Panda’s long-standing presence in the market.
“We’ve been one of the oldest retailers in Saudi Arabia. We’ve introduced the hypermarket model in Saudi Arabia. So, we’ve been leading the market. We know our customers,” Al-Sabban said. “I think this is the challenge that people coming from outside will face — understanding the customer behavior and mindset.”
He noted that while international retailers entering Saudi Arabia are targeting specific segments, Panda serves a broad customer base.
“Each outside supermarket coming in is focusing on a certain segment of customers. We are focusing on everybody in Saudi Arabia, from premium all the way to different levels,” Al-Sabban said.
He noted that while building brand trust is a challenge for international players, Panda has already earned consumer confidence, with its loyalty program, boasting over 10 million users, reflecting a strong customer base.
Al-Sabban said Panda remains committed to maintaining competitive pricing. “On the other hand, we’re working with our suppliers to ensure we have the best prices for our customers. Make sure that we maintain that perception of the lowest price and best quality,” Al-Sabban concluded.
“We want to make sure that we’re always known for the best prices, the best quality, and the freshness of our products for our customers.”
Chalhoub Group expands Saudi operations with new fulfillment hub and store
Updated 05 February 2025
Reina Takla Nour El-Shaeri
RIYADH: Chalhoub Group is strengthening its presence in Saudi Arabia by launching a regional fulfillment hub in Riyadh and inaugurating a new luxury store in Solitaire Mall.
The company’s latest investments underscore its commitment to the Kingdom’s evolving retail landscape, in line with its long-term expansion strategy.
The new fulfillment center, located in the Riyadh free zone near King Khalid International Airport, is designed to boost the company’s e-commerce and distribution operations, serving Saudi Arabia and the broader region.
In an interview with Arab News during the Retail Leaders Circle Global Forum 2025 in Riyadh, Patrick Chalhoub, executive chairman at Chalhoub Group, highlighted the facility’s strategic role.
“It’s a fulfillment center, which is aiming to really service both our digital and e-commerce drive, our distribution in Saudi Arabia but also beyond Saudi Arabia from Riyadh, gradually, to be really a hub of distribution,” he said.
The hub is expected to process up to 100 million luxury products at full capacity, leveraging advanced technology to optimize logistics and improve delivery speed.
“The aim, like in e-commerce, is to be able to fulfill in Riyadh within two hours, in Saudi Arabia within 24 hours, outside Saudi Arabia in less than three days,” Chalhoub stated.
“This will be and is the heart of the market, so it’s better to be based in the heart of the market and not be based outside and servicing the market,” he remarked, referring to the Kingdom as the center of luxury retail.
Chalhoub Group has been present in the Saudi market since 1959 and has witnessed significant policy and economic shifts over the decades, the executive chairman highlighted.
The company now employs approximately 5,000 people in the Kingdom, with 78 percent of its workforce being Saudi nationals and 74 percent women.
As part of its retail expansion, Chalhoub Group is also set to open a new store in Solitaire Mall in Riyadh on Feb. 12.
The store is designed to deliver an enhanced shopping experience, reflecting the company’s focus on innovation in retail.
Chalhoub highlighted that consumer behavior in the Middle East differs significantly from other regions, driven by cultural and social dynamics.
Unlike Western markets, where individual preferences often dictate shopping trends, the Middle East places a strong emphasis on family-oriented experiences.
Human connection is central in shaping commerce, with relationships and social interactions deeply influencing purchasing decisions.
He underlined that while some of these characteristics can also be found in regions like Latin America and parts of Asia, they are far less prevalent in Western markets.
Additionally, the retail landscape within Saudi Arabia itself is highly diverse, varying by region. Consumer preferences in the western, central, and eastern parts of the Kingdom are distinct, reflecting localized tastes and traditions.
Chalhoub pointed out that Saudi Arabia’s rapidly growing young population is another key driver of change.
With high birth rates and large families, the country’s demographics present significant opportunities for brands. Increasing education levels and digital connectivity are also shaping a new generation of more knowledgeable, globally aware, and tech-savvy consumers.
He emphasized that this evolving demographic is one of the most valuable assets for the Kingdom and the broader Gulf region.
Chalhoub provided insights into the global luxury market, emphasizing the Middle East’s growing but relatively small share.
The worldwide luxury market — including beauty, fashion, jewelry, watches, and gift items — is valued at approximately $380 billion, with the Middle East accounting for $12.5 billion, or around 3 percent to 4 percent of the total.
However, for successful brands, the region can represent between 5 percent and 7 percent of their global sales, highlighting its potential for further growth.
Saudi Arabia’s luxury market is currently valued at nearly $3.5 billion, making up less than 1 percent of the global luxury sector.
In comparison, the UAE, driven by tourism and local demand, boasts a luxury market exceeding $7 billion to $8 billion.
Chalhoub also noted that despite their smaller populations, countries like Qatar and Kuwait have well-established luxury fashion markets, in some cases surpassing the Kingdom’s in terms of spending per capita.
Given Saudi Arabia’s population of over 33 million, compared to Qatar’s 2 million and Kuwait’s 5 million, he suggested there is room for significant market expansion in the Kingdom.
