Saudi Arabia Retail Market to Reach USD159 Billion by 2024
Saudi Arabia retail industry is projected to show significant growth over the next five years. Changes in the Kingdom’s retail regulations and strong governance coupled with a commitment to advance consumer rights are increasing brick-and-mortar entrants and expansionists, contributing to a growing retail market in the region. Ease of doing business in the country has led to the emergence of start-ups and small businesses. Besides, well-designed stimulus packages are encouraging foreign direct investments, and the entry of large international retailers and global brands into the country are some of the factors boosting the Saudi Arabia retail market growth. Here are the top factors positively influencing the Saudi Arabia retail market growth.
Here are the factors positively influencing the growth of Saudi Arabia retail market.
Rise in Tourism Activities
An increase in international tourists to transit cities for pilgrimages to the Islamic holy cities of Mecca and Medina and luxurious properties and expansion of the brand-new hospitality landscape in the country are contributing to the growth in the retail market in Saudi Arabia. The Kingdom of Saudi Arabia has planned USD810 billion in investments in culture, leisure, and entertainment projects to enhance the country’s attractiveness as a tourist destination. According to the World Travel and Tourism Council (WTTC), the Kingdom is expected to increase visitors in the country to about 22.1 million by 2025, 40% up from Dubai’s current visitors.
Growing Use of Technology
Increasing adoption of automation and robotics coupled with growing penetration and product launch of augmented reality, artificial intelligence, and the Internet of Things are supporting the growth of Saudi Arabia retail market. The rising influence of social media among the population and the continuous development of technologies such as smart retail stores such as AI facial recognition and smart retail communication technology in the trading sector are some factors driving Saudi Arabia’s retail market growth. A bold digital transformation strategy can open new possibilities in every aspect of retail, be it marketing, logistic planning, cross-functional support, etc., due to the growing acceptance of digital alternatives, which is anticipated to fuel the Saudi Arabia retail market growth in the coming years.
Rising Support for e-Commerce
Consumer shift from desktops to smartphones, growing internet penetration and shifting purchasing behavior support e-commerce’s advancement. KSA has the highest smartphone penetration rate (97%) in the world, and mobile broadband internet subscriptions are exceptionally high in Saudi Arabia, which is adding to the market growth. Supportive government commerce law and increasing trustworthiness of the technology for users across different channels and devices are boosting online retail sales. Saudi Arabia’s population has a large segment of the young population aged 18-34 that displays high familiarity and inclination with the online environment and social media. Saudi Arabia ranks among the most social-media-savvy nations, higher than India, China, the US, and the UK. Moving forwards, increasingly mobile e-commerce offerings and secure digital payment options are expected to create a fertile environment for the e-commerce explosion in the country, which is anticipated to fuel the Saudi Arabia retail market growth in the coming years. According to TechSci Research report on “Saudi Arabia Retail Market By Distribution Channel (Hypermarket, Online Retail, Exclusive Stores, Specialty Retailers, Supermarket & Others), By Product Category (Food & Beverages, Apparel & Footwear, Appliances & others), Competition, Forecast & Opportunities, 2027”, the Saudi Arabia retail market is projected to grow at a formidable rate during the forecast period. The market growth can be attributed to the rising personal disposable income and changes in the purchasing behaviour of consumers.
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