Category Archives: eCommerce

Beyond the Digital Divide:  Evolving Digital Commerce in the Kingdom of Saudi Arabia in 2014

Capture11Sacha Orloff Group Report

Beyond the Digital Divide:  Evolving Digital Commerce in the Kingdom of Saudi Arabia in 2014

Author: Alexandra de Kerros Boudkov Orlov – CEO Sacha Orloff Group

Website: www.sachaorloff.com 

 

In the Gulf, and in Saudi Arabia, the trend is an expansionist real estate strategy.  Leading groups prefer to cash-in with proven formulas, highly praised in the Middle East, such as malls and western franchises, even if mother-brands operate online and offline.

The Kingdom has largely accepted the principle of the evolution of the shopping Malls, and has adopted by default e-commerce solutions and payments to acquire a large part of the consumer goods and products market, encompassing the full value chain from banking system, retail, airline, hospitality, tourism, transport couriers and telecommunication sectors.  Most of these companies are changing their product mix to support margins, focusing on increasing sales, and consolidate customer loyalty to grow sales and introducing co-branded credit cards.

The Millennial Generation represents one of the most important factors in the adoption of e- and m-commerce in the region. This year, Internet penetration in the Kingdom reached 59.25 percent of the population, and has grown by 11 percent since 2013

Now is the time for the Saudi merchants and business groups to be fully immersed in digital activities. As most of the Saudi firms are still not embracing e- or  m-commerce; they should tap into the market of mobile owners to drive traffic, increase loyalty and grow sales.

To link technology, innovation and strategy to the Saudi digital sector require acquisition and retention of human talents.  Leadership, creativity, expertise, development and execution are key factors to growing success and excellence. It allies company culture to create strong relationship between human forces and firms.

In all the GCC, customer service is weak and investing in training human capital is essential to obtain a level of satisfaction to retain customers. The danger to accept mediocrity is that firms compete with others on the same average level.

The actual organizational moto is to move away from channel focus to customer focus. The business implies data analytics, supply chain optimization, integrated technology and strong customer service. Businesses have to take calculated risks, embrace disruptive changes and empower their talent forces to gain both offline and online customers.

Download the reporthttp://media.wix.com/ugd/17fd63_f7f73aaa041b46fc8de638b8544402ab.pdf

 

Sacha Orloff Group in the Media:

Saudi Gazette:
http://www.saudigazette.com.sa/index.cfm?method=home.regcon&contentid=20140714211489

Trade Arabia
http://www.tradearabia.com/news/IT_261912.html

Technology Market Corporation
http://technews.tmcnet.com/news/2014/07/14/7921871.htm

 

Ministry of Economy Taiwan – Bureau of Foreign Trade
http://www.trade.gov.tw/Pages/Detail.aspx?nodeid=45&pid=480034

Topix http://www.topix.com/world/saudi-arabia/2014/07/saudi-firms-urged-to-bridge-the-digital-divide-tradearabia

The Paypers
http://www.thepaypers.com/e-commerce/saudi-arabia-millenials-are-the-most-important-factor-in-ecommerce-adoption/755814-25

Taiwan Trade
http://www.taiwantrade.com.tw/CH/bizsearchdetail/7553024/C

Retail and Loyalty
http://www.retail-loyalty.org/en/news/saudi-arabia-millenials-are-the-most-important-factor-in-ecommerce-adoption/

Advertisements

Leave a comment

Filed under Digital, eCommerce

E-commerce spending reaches all-time high in Saudi Arabia

E-commerce market share in Saudi Arabia will hit SR50 billion by 2015, according to Saudi Post sources. It is consistently adopting new buyers and improving revenue. About 1 in 4 Saudi Internet users are already active in e-commerce, and they visit about 70 million e-commerce pages per month. Cash on delivery is still the preferred method of payment for most e-commerce buyers in MENA, reaching up to 75 percent according to Aramex. However, new payment gateways are emerging that are working to solve this and increase trust in online transactions.

E-commerce spending has reached an all-time high in the Kingdom, and more users are getting engaged: user growth is at an estimated 9.3 percent per year. This percentage is very likely to increase faster as e-commerce companies in the Kingdom learn how to earn and leverage their customers’ trust. But the most intriguing forecast is that m-commerce, commerce through mobile devices, will become 7 times larger by 2015, due to the progressively larger demand for mobile tablets. Today the e-commerce clients over population ratio are higher for UAE than it is for Saudi Arabia, but statistics show that the tables will turn in the coming two years.

As for e-commerce market share, the biggest player in the Kingdom today is Souq.com, with a sizeable chunk of Saudi e-buyers at 13 percent. Sukar.com follow with 8 percent of the market under their belt, then comes Namshi with 7 percent, and MarkaVIP at 5 percent. These regional companies make up just a third from the entire Saudi e-commerce market, but they are strong within the rest of the region.

Many Saudi women with entrepreneurial and career ambitions are finding e-commerce to be an ideal platform, as it allows them to build thriving businesses from home. Saudi entrepreneur Sarah Al Dabbagh, Owner of Lace Events, is an example of a successful online business. She first started to promote her wedding and event planning services on Instagram, and soon her business grew with clients from all around the Arab region.

The challenges and potential of e-commerce in Saudi Arabia will be one of the key themes at ArabNet Riyadh 2013, the largest annual digital gathering in Saudi Arabia, taking place for the second year in a row on Dec. 3-4. The forum will explore how to unlock the potential of e-commerce in Saudi Arabia, and discuss the latest trends in online payments. ArabNet Riyadh will feature 80 expert speakers and will bring together more than 800 digital professionals, influencers, entrepreneurs, and investors.

The event will also cover the newest initiatives in digital Arabic content, and will feature an exhibition with more than 40 leading companies showcasing their services and technologies. — SG

Read more: http://saudigazette.com.sa/index.cfm?method=home.regcon&contentid=20131119187121

Leave a comment

Filed under Consumer, eCommerce, Retail, Saudi Arabia

GCC retailers adapting to new consumer preferences

Courtesy of Saudi Gazette

Courtesy of Saudi Gazette

 

Jeddah – Companies across the Middle East and North Africa (MENA) are developing their business models and product offerings in a response to the changing trends in consumer preferences in the region, said in a recent report.

Companies are diversifying their product range, according to some reports. Take Almarai for example. The dairy supplier capitalised on consumers’ preferences for fresh products by expanding their offerings to include fresh poultry (over frozen alternatives) and juice. Other companies are on a similar path,  said the report.

Not only food retailers are diversifying their product lines. Jarir Bookstore, which has outlets across the GCC, has adapted to the increasing demand for electronics, which now are sold in its stores.

The move toward adapting to consumer preferences by retailers comes as a response to the growth accelerating in up and coming product niches.

According to Ernst & Young’s 2012 MENA Customer Barometer, MENA consumers are among the most brand loyal consumers in the world. Twenty five percent of respondents in the UK and the US stated that brand influences their purchasing decision compared to 29 percent in Saudi Arabia, 31 percent in the UAE, 33 percent in Bahrain, 34 percent in Jordan and 35 percent in Oman.

The report also revealed that consumers are now harder to define, understand, and please than ever before and that MENA brands are facing challenges to adapt to “Chameleon Consumers”.

Five broad trends emerged from the survey, covering ten different products and services:

1. Traditional market segmentation no longer holds true. The ‘chameleon’ consumer has conflicting preferences and facets, which need to be accommodated.

2. Brands are increasingly likely to influence purchasing decisions within emerging markets, unlike the mature markets where lower loyalty is challenging companies.

3. Personalized communication and service is a priority. There are huge opportunities for organizations that can harness digital consumers through closer ‘community’ vehicles, such as social media and other digital channels.

4. Consumers are now equipped with all possible product, price and stock information and can simply bypass retailers that don’t engage consumers with relevant information and a compelling purchase pitch.

5. These new empowered customers want a greater say in how they experience service and to be active “co-creators”, not passive consumers.

The consumer base in the GCC region is growing at five million consumers per year. It indicated that spending is highest in the UAE at over 50 percent, followed by Saudi Arabia at 40 percent, and Qatar at 45 percent.

Moreover, retailers in the region are “moving away from disorganized neighborhood vendors toward organized retail outlets, such as hypermarkets,” the report mentioned.

For instance, organized retailers in Saudi Arabia are taking advantage of the country’s developed logistics infrastructure, high access to retail outlets by an increasingly mobile affluent population, the report mentioned. One example is Saudi Arabia’s Savola Group, which owns Panda Hypermarkets.

In the UAE, however, the scene is starting to look different.

Hypermarkets themselves have been expanding their reach via small neighborhood stores, according to a report by AT Kearney.

Lulu Hypermarket is planning to open 50 neighborhood stores across the GCC, while Carrefour is setting up its express stores across the UAE.

Ross Maclean, Customer Advisory Leader, Ernst & Young MENA, said: “The survey finds that in recent years, customer behavior has changed beyond recognition. In becoming a ‘chameleon’, the consumer has undergone a radical ‘metamorphosis’ and this change has significant consequences for all customer-centric organizations.”

The challenge of categorizing consumers is demonstrated by differences in consumer behavior between regions. — by SG/Agencies

More on: http://www.saudigazette.com.sa/index.cfm?method=home.regcon&contentid=20130123150249

Leave a comment

Filed under Consumer, eCommerce, Retail, Saudi Arabia, UAE

EVENT – The Role of Conspicuous Consumption in Today’s Society – Seminar

 

 

 

 

 

 

 

 

 

 

The Role of Conspicuous Consumption in Today’s Society
6 November 2012,  3-5 pm – Hilton Metropole, Brighton BN1 2FU
University of Brigthon : http://www.brighton.ac.uk/bbs/research/esrc2012/beyondbling.php?PageId=400

You are warmly invited to participate in the seminar ‘Beyond Bling: The role of conspicuous consumption in today’s society’ funded by the ESRC Festival of Social Science and hosted by Brighton Business School, University of Brighton.

The growing economic and social importance of conspicuous consumption has become a striking feature of the new consumerist societies. The supply of products and services marketed as symbols of social identity and style now represents a significant part of overall economic and commercial activity.

The seminar will bring together practitioners and researchers from sociology, business management and psychology to discuss the effect of conspicuous consumption on present day society. Seminar participants will benefit from sharing experiences with fellow practitioners and learning from cutting-edge research presentations by academics. The seminar aims to showcase the research from Brighton and will also act as a platform for future collaborations between practitioners and researchers.

Topics and speakers:

The changing face of conspicuous consumption in the UK and Middle East

Alexandra de Kerros Boudkov Orloff, CEO of Sacha Orloff Consulting Group, will draw on her own experiences to discuss ostentation among British and Arabic consumers over the past decade.

How do luxury brands promote conspicuous consumption?

Professor Christopher Moore, Glasgow Calidonian University, will discuss the conspicuous triggers used by luxury brands which influence decision making and purchase decisions among consumers.

Conspicuous consumption and value perceptions in developed and emerging markets

Dr Paurav Shukla, University of Brighton, will present his latest research on conspicuous consumption using comparative quantitative data from several developed and emerging markets.

Speaker biographies

Alexandra de Kerros Boudkov Orloff
CEO and Founder of Sacha Orloff Consulting Group.

Prior to founding Sacha Orloff Consulting Group in 2005, she was Managing Director of de Grisogono and part of Senior Management at Groupe Horloger Breguet and Swatch Group; GM of the International Television and Symposium Exhibition in Switzerland and Japan. With over twenty years in the luxury and retail industry, Alexandra brings a wealth of expertise to brand development strategy; restructuration; investments and acquisitions, and, operational performance.

Sacha Orloff Consulting Group is one of the sole consulting companies whose core expertise operates in the service and retail industry, specializing in serving the high-growth potential of GCC and Middle Eastern markets. Sacha Orloff Consulting Group works alongside leading businesses to develop and implement customized solutions, considering technology, innovation, trends and timing that address today’s challenges and tomorrow’s opportunities.

Professor Christopher Moore
Vice Dean of the Glasgow Caledonian Business School.

Prior to his appointment at GCU, Professor Moore was Chair in Marketing and Head of the Department of Management at Heriot Watt University, Edinburgh. Professor Moore has held visiting Professorial appointments at a number of Universities, including the Universities of Manchester, Surrey, Northumbria and Robert Gordon in Aberdeen. A graduate of the Universities of Glasgow and Stirling, his doctoral research was in the area of international fashion brand marketing.

His current research interests include retailer internationalization; luxury brand marketing and trends and developments in youth consumption. Professor Moore has provided consulting and commissioned research services to a wide range of retailers, financial service institutions, media companies and other consumer-facing organisations in the areas of brand management, marketing strategy and consumer intelligence management.

Dr. Paurav Shukla
Reader in Marketing at the University of Brighton Business School.

He possesses wide range of industry and academic experience from middle to senior level in healthcare and media industries. He has been delivering corporate training, teaching and consulting assignments for various organizations in the Europe, Asia and North Africa. Paurav has been involved with various EU funded research projects involving several nations from EU and Asia. He is associated with several academic institutions and corporate organizations including not for profit organizations in the capacity of advisor and board of directors.

His research interests include cross-cultural consumer behaviour, luxury marketing and branding, consumption experiences and marketing issues in emerging markets. He has published on these topics in a wide range of outlets including top peer reviewed journals, international conferences and main stream media including the Woman’s Wear Daily, Business Week, Luxury Society, and National Post of Canada among others.

To confirm your attendance at this free event please email Chris Matthews: C.R.Matthews@brighton.ac.uk
http://www.brighton.ac.uk/bbs/research/esrc2012/beyondbling.php?PageId=400

Leave a comment

Filed under Abu Dhabi, Consumer, eCommerce, Education, Luxury Middle East, Mobile, Saudi Arabia, UAE

Mobile shopping on the rise – smartphones to stir $689b retail store sales by ’16

© Saudi Gazette

 

JEDDAH – Smartphones currently influence 5.1 percent of annual retail store sales, translating into $159 billion in forecasted sales for 2012, according to new Deloitte research. For the first time in the industry, the in-depth study measures the “mobile influence factor,” or impact of smartphones on in-stores sales.

The research anticipates mobile’s influence, based on consumers’ smartphone use, will grow to represent 19 percent of total store sales by 2016, amounting to $689 billion in mobile-influenced sales. By comparison, direct mobile commerce sales will pass the $30 billion mark by that time, according to industry estimates.

“Mobile devices’ influence on retail store sales has passed the rate at which consumers purchase through their devices today,” said Santino Saguto, partner in charge for the Telecommunications, Media and Technology (TMT) industry, Deloitte Middle East. “Consumers’ store-related mobile activities are contributing to – not taking away from – in-store sales, and the research indicates that smartphone shoppers are 14 percent more likely to convert and make a purchase in the store than non-smartphone users. This means that mobile is an important tool for retailers to incrementally drive traditional in-store sales, strengthening the relationship between retailer and consumer to increase engagement and loyalty.”

In the Middle East, while e-commerce adoption remains low, online sales have increased rapidly in the past two years and are expected to continue to grow fast due to the region’s demographics. According to the fourth Arab Media Outlook Report (AMO), issued by the group and the Dubai Press Club, in most Arab markets in the region, except the UAE, ecommerce adoption remains below 5 percent of the population with transactions mostly focused on ticketing (flights, concerts etc.). However the digital platform has a strong potential for growth given the favorable demographics of the Middle East region (i.e. more than 50 percent of the population is below the age of 25). In addition, due to the strong regional uptake of smartphones and mobile broadband an increased activity in m-commerce and mobile social networking is forecasted.

With close to half of the population using smartphones in countries such as the UAE, there is a strong propensity to download and use mobile apps. According to the AMO report, on average, smartphone users in the region have up to 32 apps on their phone and over 50 percent of the smartphone users regularly download applications on their phones.

“We are finding many payment solution providers, marketplaces, local recommendation sites and commerce platforms sprouting up across the MENA region, to develop a suitable ecosystem around e-commerce and m-commerce,” said Emmanuel Durou, Telecommunications, Media and Technology (TMT) director at Deloitte in the Middle East. “Jointly with smartphone adoption these changes are expected to boost the impact of mobile on the retail sector and improve the in-store shopping experience,” he added.
To better understand the growing impact of mobile devices on the retail sector, Deloitte’s retail & distribution practice and Digital conducted an in-depth survey of US consumers about how they use their smartphones to shop today and their likelihood of using them in future buying decisions.
Nearly half (48 percent) of US smartphone owners surveyed say their phones have influenced their decision to purchase an item in a store, and the study shows that consumers’ smartphone use tends to be highest at or near the point of purchase. Based on the survey, more than 6 out of 10 (61 percent) of smartphone owners who use their devices to shop have done so while shopping at the store, and more than half (52 percent) reach for their phones on the way to the store.

Smartphone-toting consumers appear more likely to make a purchase than those who do not own one or do not use it to assist in-store shopping. When asked about their most recent shopping trip, nearly three quarters (72 percent) of smartphone owners surveyed indicated they made a purchase on that day, compared with 63 percent of respondents who did not use a phone. Smartphone users were also more likely to eventually make a purchase: among those who did not buy anything on their last trip, 59 percent of those who used a smartphone eventually made a purchase, compared to only 22 percent of those who did not use one.

Mobile applications appear to be the inroads to consumer engagement. Nearly four out of 10 (37 percent) smartphone owners surveyed who used a smartphone on their last shopping trip utilized a third-party mobile shopping application, and more than one-third (34 percent) used a retailer’s mobile application.

Smartphone adoption coupled with consumers’ propensity to use their devices for shopping also contributes to the growing mobile influence factor. As consumers buy smartphones, they are quick to tap their devices for shopping assistance, with smartphone use for store-related shopping increasing 40 percent after the first six months of ownership, according to the survey. Once these consumers are on board, they consistently use their phones for 50 to 60 percent of their store shopping trips, depending on the store category.

The mobile influence factor is strongest among younger shoppers, suggesting that as this segment ages, a retailer’s core customers will increasingly be armed with smartphones. In Deloitte’s survey, nearly 7 out of 10 smartphone owners (67 percent) between 14 and 34 years old have used their devices to shop, and 55 percent indicate their smartphones have influenced their decision to make a purchase. – SG

Published in Saudi Gazette: http://bit.ly/NljdUq

Recommended reading: E-Commerce in Saudi Arabia: Driving the evolution, adaption and growth of e-commerce in the retail industry  http://bit.ly/P25O8C

1 Comment

Filed under Consumer, eCommerce, Mobile, Saudi Arabia, Study

E-Commerce in Saudi Arabia: Driving the evolution, adaption and growth of e-commerce in the retail industry

Report by Sacha Orloff Consulting Group

Author: Alexandra de Kerros Boudkov Orloff

Full report download: E_Commerce in Saudi Arabia_Driving_The_Evolution_Adaptation_and_Growth_of_ecommerce_in_the_Retail_Industry_SOCG_2012June

Should Saudi Arabia build on the impetus that has been created through the adoption of e-government, a domino effect would trickle down into the private sector and consumer behaviour, with a wide spread of e-commerce penetration. This would create new economic opportunities and enhance the technological innovation capabilities of businesses providing enhanced competitiveness in domestic and international markets.

The Report “E-Commerce in Saudi Arabia: Driving the evolution, adaption and growth of e-commerce in the retail industry” highlights the steps which need to be taken to support the adoption and diffusion of the e-commerce model in Saudi Arabia. Key findings demonstrate that the current spread of e-commerce has been hampered by specific socio-cultural business traits which inhibit the risk-taking characteristics of enterprises. These traits are characterized by a need to implement proven business models;   reduce the risk of failure and an aversion to adopt a business model which may not be suitable to current consumer habits. Moreover, the sluggish uptake of e-commerce technologies by major competitors continues to prove detrimental to the spread of e-commerce.

Saudi Arabia needs to take the lead in driving its retail and e-retail growth, consequently to enforce its position as a key retail business hub in the region with national and foreign direct investment, and technical expertise to drive growth, innovation and positive business confidence.

Opportunities are emerging for private sector firms in Saudi Arabia to address numerous pressing challenges to the adoption of e-commerce solutions. A clear focus on change management processes, innovation, and bridging the talent-gap must be prioritized to ensure the widespread growth of these new channels.

1.     Introduction
2.     Saudi Retail Sector Overview
3.     ICT adoption and penetration in KSA
4.     Emergence and growth of e-government and e-commerce
5.     Challenges and barriers to e-government
6.     Enablers to e-government
7.     Challenges and barriers to e-commerce
8.     Enablers to e-commerce
9.     Online Customer behaviour and intention in Saudi Arabia
10.   Case study – eXtra iconic retailer but non e-conic success story
11.    Conclusion

©Sacha Orloff Consulting Group – all right reserved – June 2012

Also in Arab News – June 21, 2012 – Despite challenges, KSA ripe for e-commerce in retail industry http://www.arabnews.com/despite-challenges-ksa-ripe-e-commerce-retail-industry

3 Comments

Filed under Consumer, eCommerce, Luxury acquisition, Luxury Middle East, Report, Saudi Arabia, Study

The importance of Innovation in the UAE Retail Landscape

By Alexandra de Kerros Boudkov Orloff

Editorial and released on Dxbuzz magazine May 31st 2012 with the Khaleej Times newspaper.

I have been travelling to Dubai before it was known for being the most opulent retail destination in the world. However, I have increasingly been observing that since 2009, there has been a significant shift in the retail market. Whilst travelling to Dubai this month, my belief that the end of ‘malls as we know it’ has come to a close. The luxury mega malls boom in 2011 should be seen as a sign that some of the existing retail concepts are maturing. Nonetheless to sustain this growth, and adapt to more complex consumer habits, innovation and creativity should form the basis of new retail trends to maintain Dubai’s position in the retail sector.

The robust fundamentals of the UAE consumer market is a fact. Emiratis and GCC consumer have got a higher purchasing power than their European counterparts. Nonetheless, the saturation in the retail sector is leading to questions on how new retails concepts and infrastructure designs can respond to consumer needs. Astute moves by mega-retailers such as Emaar has focused on making retail central to the concept of ‘lifestyle entertainment’.  Malls no longer just offer retail spaces and shops, but consumers are able to enjoy aquariums, water features, skiing, ice-skating and leisurely activities. This not only enhances the consumer experience, but provides much needed activities in a region where nine months out of twelve need to be spent indoors.

The evolution of the retail sector in Dubai and Abu Dhabi has not stopped competing retailers from opening new malls, although primarily a ‘copy and paste’ model is being adopted; modelling on what has worked and not projecting how demographic, social and purchasing power affects consumer behaviour and expectations. For example, Wafi Mall, one of the first malls to open in Dubai is undergoing a complete refurbishment to attract the consumer base it has lost to Dubai Mall or smaller, more local retail spaces. In addition, Dubai Mall is adding thousands of square meters to its existing space in response from the growing demand of international commerce to have a retail space in Dubai.

The desire to be the biggest and most powerful will come at a cost and will outpace market growth. New retail stores will have to drastically shift their marketing strategies to attract consumers, which in turn will off-balance their competitors who will find it difficult to maintain their profit per square meters.  .

Immediate and fairly cost-effective steps can nonetheless be taken by retailers in a segmented approach. First and foremost, investing in consumers is crucial, as they remain their unique assets and is the only manner to spur consumer retention and growth. To achieve this, efforts should be geared towards enhancing the knowledge and skills base of sales as well as sales staff. Employees are the first and sometimes only representation of the retail brand, and regularly lack the necessary brand and company awareness that can then be transmitted to the target consumer. Aside from improving customer services, retail brands have to focus on generating best-practices in the processes and operations. This can be achieved by understanding customer needs through loyalty schemes and rewards, an understanding of the customer mix and segmentation and the promotion of products according to local trends. 

Dubai retailers need to consider seeding new foundations of vertical sources of growth, outside of their existing core business. Whilst brick and mortar are a sound approach, click and mortar is also another source of growth.

In the UAE only, there is vast e-commerce gap, where online purchase could reinforce a healthy competition between malls and virtual retailers. There is enormous share to gain of the modern consumer; who is e-willing to physically and virtually shop.

Other options are organic and modern convenience stores, cash and carry, discounters, and outlet malls mixed with business areas. For an active and busy professional like myself, I enjoy the buzz of the trendy business concept of ‘Make Business Hub’ on JBR; where I hold regularly my meetings with the who’s is who of the  GCC digital scene from Google to Wamda. However, these options are not developed to the fullest in the region, some UAE retailers also have a great potential for implementing changes and innovation in their core businesses enabling to diversify their vertical business structure. Seizing this potential will require astute strategies; with strong organizational development and management to succeed in implementing a more complex business model.   

©Alexandra de Kerros Boudkov Orloff

1 Comment

Filed under Consumer, eCommerce, Luxury Middle East, UAE