Retail in Saudi Arabia: Key market research findings
- Favorable government policies to drive growth in the market
- Grocery segment to account for a majority of the market’s revenue
- Key vendors – Al Othaim, Alhokair Fashion Retail, Jarir Marketing Company (Jarir), Saudi Marketing Company, Savola, and United Electronics
Technavio’s market research analysts predict the retail market in Saudi Arabia to grow at a CAGR of more than 7% between 2016 and 2020. The recent change in government policies is the fundamental driving force behind the growth of this market. The Saudi Arabian Government (SAG) is focusing increasingly on improving their investment policies in an attempt to create better scope for growth in the trade and investment regime and diversify the economy that is overly dependent on oil. In 2015, the Ministry of Commerce & Industry (MOCI) announced that Saudi Arabia is considering trading entities to be completely foreign owned. Saudi Arabia is easing restrictions on foreign investors, which enables them to own 100% of retail and wholesale businesses, to attract investment and diversify its economy. It is also streamlining its investment rules and visa regulations for investors.
The new market research report from Technavio presents a breakdown and analysis of the retail segments in Saudi Arabia based on the product.
“The preference for online retail amongst consumers is currently witnessing an upsurge due to the increased penetration of the Internet and the growth of the mobile commerce business in the region. Besides, vendors are leveraging the popularity of social media platforms such as YouTube and Twitter to create more product and brand awareness among consumers,” says Brijesh Kumar Choubey, Lead Analyst, Consumer & Retail, Technavio Research.
During 2015, the grocery segment accounted for more than 60% of the overall market share to become the dominant revenue generator in the retail market in Saudi Arabia. Saudi Arabia is the largest importer of food and agricultural products among the Cooperation Council for the Arab States of the Gulf (GCC) countries. Factors such as the expansion by several leading Saudi and international retailers, increasing disposable income, and rising population in the region are some of the factors that will boost growth in the grocery retail market in Saudi Arabia during the forecast period.
The key vendors in the market include Al Othaim, Alhokair Fashion Retail, Jarir Marketing Company (Jarir), Saudi Marketing Company, Savola, and United Electronics. This market is highly competitive due to the presence of multiple international and local players, which operate across the country. Owing to the high level of market competition, the vendors in this market have been compelled to introduce innovations into the market as it will help them to meet the varying demands of customers. Factors such as rising urbanization and increasing internet penetration will play a crucial role in bolstering this market’s growth potential in the near future.
A more detailed analysis is available in the Technavio report, Retail Market in Saudi Arabia 2016-2020.
We can customize reports by other regions and specific segments upon request.
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