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Amazon tips Saudi Arabia to deliver sales growth

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After opening its new office in Riyadh, Amazon expects e-commerce sales to grow in Saudi Arabia
  • E-commerce market in Saudi Arabia expected to hit $15bn by 2025
  • New Riyadh office aims to employ more Saudi talent 
  • Amazon sales outside North America fell 5% to $27.7bn in Q3

Amazon sees “exciting potential” in Saudi Arabia and the Middle East, one of its executives has said, as the e-commerce giant commits to further investment in local facilities and talent.

Ronaldo Mouchawar, vice president of Amazon Middle East and North Africa, which opened its new office in Riyadh last month, told AGBI that the company expects continued growth in sales in Saudi Arabia. 

“Online retail continues to grow in the kingdom, with customers increasingly relying on e-commerce platforms for their wants and needs, and businesses in turn growing their presence online to connect with shoppers,” he said.

“We continue to see exciting potential in online shopping in Saudi Arabia and the wider Mena region. We’re excited to continue playing a pivotal role in supporting local businesses in Saudi Arabia to grow their presence and customer reach online.”

Mouchawar, a Syrian entrepreneur, co-founded Souq.com in 2005. It became the largest online retailer in the Arab world and when Amazon acquired Souq in 2017, Mouchawar became the Silicon Valley giant’s Mena vice president. He is also a veteran of Maktoob, the internet portal purchased by Yahoo in 2009.

The e-commerce market in Saudi Arabia is forecast to grow to SR57 billion ($15 billion) by 2025. For the wider Mena region, e-commerce currently accounts for just 2 percent of total retail sales.

This, according to Mouchawar, represents a “sizeable opportunity for growth in the industry, especially when paired with ongoing government support and digital advancements in this space”.

He said Saudi Arabia offered a strong value proposition to investors in the supply chain sector, especially since the launch last month of the Global Supply Chain Resilience Initiative.

“With this initiative, the kingdom is creating an environment that will enable global investors to make optimal use of Saudi Arabia’s potential, while navigating continued supply chain challenges,” he said.

Amazon MENA
Ronaldo Mouchawar, vice president of Amazon Mena, was co-founder of Souq.com, which became the largest e-commerce retailer in the Arab world and was bought by Amazon in 2017

Crown Prince Mohammed Bin Salman announced the launch of the Global Supply Chain Resilience Initiative last month, as part of Vision 2030 aspirations to make Saudi Arabia a top 15 global economy by 2030.

The GSCRI plans to address the impact of the pandemic, trade disputes and geopolitical developments that have broken or weakened global supply chains, driving up commodity prices and disrupting production and distribution.

Mouchawar said that against this backdrop, Amazon would continue to invest in Saudi Arabia. 

“We continue to invest in the kingdom across retail, smart devices such as Alexa, Amazon Payment Services and more. We also continue to create job opportunities locally, currently employing over 3,000 individuals across permanent and seasonal roles.”

He added that the office in Riyadh was “paving the way” to attract more local talent, a key pillar of the company’s growth plans.

“We are also working to launch initiatives with the aim to empower and upskill Saudi talent. At Amazon, we are customer-centric and committed to innovating on behalf of customers.

“To do this we have to attract the right talent and people, who are equipped to be customer obsessed and to continuously improve the customer experience.”

Mouchawar also highlighted the importance of third-party sellers to Amazon, adding: “We remain absolutely committed to helping them reach more customers as they pursue their entrepreneurial ambitions.” 

In March deals were signed with the Ministry of Investment and the Small and Medium Enterprises General Authority to empower 40,000 SMEs by 2025, connecting them with millions of Amazon.sa customers. 

“These enable us to empower young innovators, entrepreneurs, SMEs, startups and emerging brands in Saudi Arabia, supporting them in achieving their full potential while contributing to the country’s digital economy,” said Mouchawar.

“As these programmes grow they will create hundreds of jobs in the logistics sector across the country.”

Since launching its operations in Saudi Arabia in 2020, Amazon has boosted its investments and expanded its activities in various business sectors including Amazon Prime, which offers free same-day delivery in Riyadh and Jeddah. 

The company is also introducing an Arabic language version of its Alexa virtual assistant device with the Khaleeji (Gulf) dialect.

Globally, Amazon announced a 15 percent increase in net sales to $127.1 billion in the third quarter of 2022. North America segment sales increased 20 percent while international sales decreased 5 percent to $27.7 billion.

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