Tag Archives: GCC

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/

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KSA to inject $30.9b in tourism in 10 years

Tourism is being ranked a top priority for Saudi tourism officials. The Saudi government is investing heavily in its tourism sector, principally to provide employment opportunities for Saudi graduates.

According to a 2013 MENA tourism and hospitality report by research consultancy Aranca, investment in the travel and tourism sector is expected to increase at a CAGR (compound annual growth rate) of four percent to SR 30.9 billion over a 10-year period from 2013-23.

The number of tourists visiting KSA is estimated to increase at a CAGR of two percent to 21.3 million over the period 2013 – 23. Revenues will total SR60.9 billion by 2023 – due to an increase in number of Haj and Umrah tourists and growth of international shopping centres.

To cope with the increasing number of visitors, the Saudi government has outlined a plan to invest more than $30 billion in its airports by 2020, including $10 billion in private investment for the sector. More than $12.5 billion has already been earmarked for the country’s four main international airports in Jeddah, Riyadh, Dammam and Madinah.

Based on the expected growth of the region, the annual Arabian Travel Market (ATM) roadshow took off in Riyadh to deliver a presentation at the offices of the Saudi Commission for Tourism & Antiquities.

“The travel and tourism sector’s direct contribution to Saudi Arabian GDP is projected to increase at a CAGR of four percent to SR83.7 billion by 2023. Put that into perspective, it is equivalent to about nine percent of current Saudi GDP, which is a great achievement. This is solely as the Kingdom looks to diversify its economy away from hydrocarbon receipts,” said Mark Walsh, portfolio director, Reed Travel Exhibitions.

Riyadh is the final leg of the six Middle East destinations being visited by the ATM team during its roadshow which took in Bahrain, Kuwait, Beirut, Muscat and Dubai. A strong delegation from the Kingdom is expected at ATM.  Led by the Saudi Commission for Tourism & Antiquities it includes, Saudia Airline, Umrah & Makarim Hospitality Group, Fursan Travel & Leisure, Hanco Rent a Car, EbreezTech, Rahhal International, and Unique Choice.

Meanwhile, Saudi Airlines Cargo will increase its belly capacity on new international routes beginning April 1 through Saudia Arabian Airlines’ new passenger flights to Manchester and Los Angeles.

The Manchester service will be operated by the airline’s B777-200 aircraft and will have a capacity of 9 tons from Riyadh/Jeddah and 12 tons into Riyadh/Jeddah, while the Los Angeles service will be operated by the B777-300 aircraft and will have a capacity of 6 tons from Riyadh/Jeddah and 8 tons into Riyadh/Jeddah. Both destinations will be served three times per week.

Source: Saudi Gazette – http://saudigazette.com.sa/index.cfm?method=home.regcon&contentid=20140220196352

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Bahrain Media Report

London and Manama – January 2014

Sacha Orloff Consulting Group in partnership with Tawasul Al Khaleej, have conducted a survey on the role of media as a catalyst for the dissemination of market information and data among businesses in the Kingdom of Bahrain.

Media is a key component of economic growth and the transformation of the economy in Bahrain. The purpose of this survey is to analyse current perceptions of the media industry in Bahrain, and how consumers and business professionals engage with the media.

Key findings include:

90.3 percent of the respondents agree and strongly agree that data is important to the performance of their business in Bahrain.

56.9 percent of Bahraini professionals perceive media in Bahrain as an important source to their business activities in the Kingdom.

However, approximately two thirds of the population surveyed agreed that, Bahrain is not a leader in the media industry.

A full download is available below:

SOC_Bahrain Media Report_Jan14

Author – Alexandra de Kerros Boudkov Orloff – Owner & C.E.O Sacha Orloff Consulting Group

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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

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GCC retail sector is robust

imagesThe GCC’s retail sales are expected to grow at a CAGR of 7.7 percent from end-2011 2 to reach $270.3 billion by 2016, was said in a report Sunday.

Food retail sales are anticipated to expand at a CAGR of 8.8 percent during this period while non-food retail sales are likely to grow at an annual average growth rate of 6.6 percent. Food sales growth will outperform non-food sales growth during the forecast period as high-value and healthier food products could find greater demand.

Sales of supermarkets and hypermarkets in the GCC are expected to grow at an annual average rate of 10.5 per cent between 2011 and 2016. The relatively under-penetrated markets in terms of modern grocery retail formats like Saudi Arabia, Qatar and Kuwait are likely to outperform in this segment.

Duty free and travel retail sales in the Middle East are forecasted to grow at a CAGR of 11.6 percent from 2011 to 2016, outperforming the broader retail industry in terms of growth. The outlook for the luxury segment remains positive and is expected to expand at CAGR of 8.2 percent between 2011 and 2016.

The region’s retail sector has displayed strong resilience in the face of global economic downturn and is expected to continue to grow at a steady pace given its attractiveness to tourists and residents, geographic location, developed logistics and availability of diverse shopping options. While the sector presents attractive opportunities, it is highly competitive and retailers need to continue to innovate so that they can achieve sustainable growth and profitability.

“Retail industry, which is one of the fastest growing sectors in the GCC, has thrived over the last several years due to increasing purchasing power, growing expatriate population, changing lifestyle and an expanding tourism & hospitality industry. Retailers have benefited from the government initiatives and progressive policy agenda and have a healthy period of growth ahead of them”, said Sameena Ahmad, Managing Director at a consultancy.

“The region’s retail sector has displayed strong resilience in the face of global economic downturn and is expected to continue to grow at a steady pace given its attractiveness to tourists and residents in terms of geographic location, developed logistics and availability of diverse and quality shopping options. While the sector presents attractive opportunities, it is highly competitive and retailers need to continue to innovate, so that they can achieve sustainable growth and profitability,” said Mahboob Murshed.

Food retail sales are anticipated to expand at a compound annual growth rate (CAGR) of 8.8 per cent during this period while non-food retail sales are likely to grow at an annual average growth rate of 6.6 per cent. Food sales growth will outperform non-food sales growth during the forecast period as high-value and healthier food products could find greater demand. Sales of supermarkets and hypermarkets in the GCC are expected to grow at an annual average rate of 10.5 per cent between 2011 and 2016.

The relatively under-penetrated markets in terms of modern grocery retail formats like Saudi Arabia, Qatar and Kuwait are likely to outperform in this segment.

Duty free and travel retail sales in the Middle East are forecast to grow at a CAGR of 11.6 per cent from 2011 to 2016, outperforming the broader retail industry in terms of growth. The growth projection has been revised upwards from the previous report primarily in anticipation of higher passenger traffic at the Abu Dhabi and Qatar airports and concourse 3 plans at the Dubai Airport.

The outlook for the luxury segment remains positive and the luxury retail sales is expected to grow at a CAGR of 8.2 percent between 2011 and 2016. While retail sales in all the countries across the GCC region is expected to register positive growth through 2016, the outlook for Saudi Arabia is the most optimistic .The retail industry in Saudi Arabia is projected to expand at a CAGR of 9.5 percent between 2011 and 2016. All the other GCC nations are likely to register retail sales growth of around 5 percent-7 percent during the same period.

Based on a Moderate Growth scenario calculated at 80 per cent occupancy over the next five years for the supply-side estimates, occupied gross leasable area (GLA) in the GCC is projected to reach 15.8 million sq m in 2016 compared to 11.4 million sq m in 2011 growing at a CAGR of 6.8 percent during the same period. Retailers are expected to continue their focus on improving efficiencies and making optimum utilization of retail space.

Although the projected GLA additions in the GCC are unlikely to create an over-supply situation and vacancy rates are expected to remain under control, retailers may be selective in picking the right space for their stores in shopping malls.

There are several factors contributing to the growth of the GCC retail sector. A consistently expanding population base, young population and growing urbanization make demographics of the GCC highly attractive for retailers of both essential and discretionary products. A growing GDP, substantial government spending on infrastructure and healthcare, low fuel prices and low or no tax incidence, free up a substantial portion of individuals’ income for consumption of food and non-food items and fuelled the growth of the retail industry. GDP per capita (PPP) of all the GCC economies is high and is expected to see a healthy growth. — Saudi Gazette

Read more: http://bit.ly/Z9B1vb

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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

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Internet economy in Saudi Arabia forecast to reach SAR 107 billion by 2016

By Isla MacFarlane

The Saudi internet economy contributed SAR 37 billion to the overall Saudi economy in 2010, representing 2.2 per cent of GDP, and putting Saudi Arabia at 13th place amongst the G-20 countries.

This figure is projected to rise to SAR 107 billion by 2016, representing 3.8 per cent of GDP, according to a new report in The Boston Consulting Group’s Connected World series. It found that by 2016 the total size of the G-20 Internet economy will be $4.2 trillion, equivalent to 5.3 per cent of GDP, up from $2.3 trillion or 4.1 per cent in 2010.

The $4.2 Trillion Opportunity: The Internet Economy in the G-20’finds that if the Internet were a sector in Saudi Arabia, it would be more than twice as large as the utilities sector.

Saudi Arabia’s Internet economy growth rate of 19.5 per cent compares favourably to other developing nations in the G-20, which are growing at an average of 17.8 per cent. Projected growth rates elsewhere are: 24.3 per cent in Argentina, 18.3 per cent in Russia and 15.6 per cent in Mexico. In 2016, Saudi Arabia will rank number 10 in the G-20, with its contribution to GDP increasing to 3.8 per cent.

These growth rates are impressive compared to the Internet economies of developed G-20 markets, which are expected to grow at an average of 8.1 per cent through 2016 – for example, 10.9 per cent for the U.K. and 7.8 per cent for Germany. In 2010 developed markets contributed 76 per cent of the G-20’s Internet economy; by 2016 that will fall to 66 per cent.

“The Internet offers one of the world’s unfettered growth stories,” said Joerg Hildebrandt, Partner and Managing Director at BCG Middle East. “A robust Internet economy is an essential underpinning for Saudi Arabia’s future, providing both economic and social benefits.”

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