In a time of transformation for Saudi Arabia, Majed M Al Tahan co-founder and CEO of Danube Online, and founder and CEO of AYM Commerce, reveals how strong the fast-growing e-commerce market in the kingdom is, and how Donau Online works to strengthen its female customers and employees.
How does the Saudi retail market go in the current environment? Is the market for e-commerce growing?
Although bricks and mortar still represent the majority of retail spending, the once-dominant position is increasingly threatened by an e-commerce revolution. The e-commerce, led by the titans of the industry, is capturing an increasing share of consumer spending.
As the global online retail market is expected to grow to an astounding $ 4 trillion by 2020, it is indisputable that there are significant opportunities for others to file a claim. According to a recent Morgan Stanley report published at the end of July 2018, online retail in the Middle East is ready to enter a phase of rapid growth. A high percentage of internet users already buy online articles, with an estimated 85% in the U.A.E. and with 49% in Saudi Arabia in 2017. However, the order amounts remain relatively small at the moment. Payment security and logistics remain important challenges that need to be overcome to stimulate further growth.
Retail analysts predict that Saudi Arabia, with its large population under 30 and the relatively low penetration level, will be the U.A.E. as the leading ecommerce market in just two years. Initially the growth of the B2C e-commerce market in Saudi Arabia was due to the sale of electronics and clothing, but with Donau Online first, there is a rapidly growing demand for grocery products that can be purchased online and delivered to the customer . door. Backed by our strong base and the familiar reputation of the Danube brand and our physical stores, we are ready to turn Saudi's digital revolution into the retail evolution of the country.
Fueled by a young and digitally savvy population that increasingly wants the convenience of shopping at home or on the road, the e-commerce market of the Kingdom is ready for exponential growth. also the the introduction by the government of initiatives such as the recently announced e-commerce government council and initiatives such as Citizen's Account have acted as a driving force by increasing consumer confidence in the e-commerce industry and increasing of the purchasing power of Saudi households. Encouraged by the obvious possibilities here, there is a remarkable growth in the number of apps that connects small independent supermarkets with customers.
This is a hugely positive development, but most of these retailers simply do not have the scale to meet the needs of customers who are accustomed to the large product range, value and quality that the larger supermarkets, such as the Danube, can offer. The Saudi e-commerce story will undoubtedly create both winners and losers. The companies that come on top of it do this by offering a combination of the right products, services, quality, reliability, speed and user-friendly solutions. To achieve this formula, online retailers will have to continually invest and innovate to find solutions that meet the specific needs of customers in Saudi Arabia.
Women are a big part of your customer base – how can you contact them to identify their needs?
women are the core of our customers and meeting their needs is fundamental for our company. Earlier this year, to celebrate International Women & # 39; s Day, we released data from Danube Online, which encouraged Saudi female millennials to grow e-commerce in the Kingdom as they represent up to 60% of users -commerce platform for groceries.
Young Saudi women catalyze a change in consumer behavior when it comes to shopping, using technology to acquire daily household necessities, with nearly 50% of returning buyers from Danube Online among the female millennial category. We are very happy that the millennial females in Saudi Arabia have been the fastest adopters of the Danube App and drive the growth of e-commerce in the Kingdom.
Online shopping offers more convenience for Saudi women who do not drive. The recent end of the ban on driving among women makes it easier for women to visit brick and mortar stores, although it remains to be seen how many people will take their right to drive. As of June only 120,000 have applied for a license (Arabian Business, Tuesday 6 June 2018), but this figure is likely to rise. E-commerce will grow exponentially, but shopping in stores remains a popular leisure activity for the whole family in Saudi Arabia.
Saudi Arabia has taken major steps this year to make women stronger. What do you think of the current reforms in the country and what initiatives do you have to encourage more women to take up senior positions?
As a company, BinDawood has a long tradition of defending and supporting women. Empowering women, such as ending the driving ban, supports the ambitious goals of Saudi Arabia in 2030 and the increasing role of women in boosting the economy of Saudi Arabia.
Clever retailers clearly understand that women are fundamental to the success of a retail business, but as a group BinDawood has a proud history of continuous striving for support women and often usher in their social contributions in marketing initiatives. For Mother's Day this year, BinDawood launched several video campaigns for the Danube that praised and praised Saudi working mothers and honored them as the person most responsible in the family.
These sentiments are also supported by BinDawood's business activities, where the group actively seeks to hire female Saudis from its teams and business units. Currently, women constitute about 20% of the Saudi labor force. As a group BinDawood has more than 10,000 employees in its business units and part of BinDawood's vision is to become the preferred employer of the retail trade in Saudi Arabia. That vision includes hiring more women.
When we launched the Danube brand online in 2017 and launched the largest e-commerce supermarket platform in the region, we announced that we would employ 1,000 Saudi nationals to support the growth of the online activities of the Danube and the 2030 vision of the Kingdom. We see that Saudi women make a big contribution to that number. As a leading retail group in Saudi Arabia, we understand that an inclusive workforce is a crucial factor for our success. The most important thing is that we have a deep understanding that working together will help us to realize the vision for 2030 as a society.