Blessing in disguise: How pandemic was a catalyst for Saudi SMEs to change

Saudi Arabia’s consumer behavior was transformed during the lockdown as soon as malls and stores were ordered to shut their doors, creating a frenzy among consumers. (SPA)
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Updated 20 September 2020
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Blessing in disguise: How pandemic was a catalyst for Saudi SMEs to change

  • E-platforms played a crucial role in SMEs’ survival
  • COVID-19 transformed people’s shopping habits

JEDDAH: Saudis continue to shop online despite the government easing the COVID-19 lockdown, with the surge in e-commerce prompting small and medium-sized enterprises to adapt.

E-commerce saved global retail markets from collapse and stopped consumers from having to go out during the first wave of the outbreak. However, SMEs were the most vulnerable to the pandemic’s consequences and e-platforms played a crucial role in their survival.
Saudi Arabia’s consumer behavior was transformed during the COVID-19 lockdown as soon as stores were ordered to shut their doors, creating a frenzy among consumers although they were quick to adapt. SMEs were also forced to adapt, not only to accommodate the growing demand for online shopping but to ensure they survived with minimal losses.
Marion Janson, the chief economist at the UN’s International Trade Centre, said in June that around 20 percent of SMEs globally may not survive the pandemic.
A recent report from Visa revealed increased anxiety among merchants in Saudi Arabia, with 67 percent of small businesses noticing a decrease in average consumer spending.
Many Saudi consumers started shopping online for the first time, primarily for essentials. The Visa report showed that two-thirds of the Saudi consumers surveyed said that COVID-19 led to their first online grocery purchase, while 59 percent made their first online purchase from pharmacies.
“With the confusion at the beginning, we didn’t know what was acceptable and what wasn’t,” said Dr. Suhad Zain, a government employee in Jeddah. “Can we risk going out to shop for our daily needs or not? We needed to be sure that everyone in the house was safe, including the driver, and not expose ourselves to the invisible menace that changed our lifestyles. Most of our groceries were obtained online, from produce to water bottles to even appliances and leisure items. It had to be done, even though we needed time to accept the new change.”
Fear of the virus is expected to change the way consumers behave forever. “It became more convenient even after the lockdown was lifted,” Zain added. “After a few months we got used to it and, as a family, it became our new preferred means of purchase.”
Such conditions were a catalyst for online commerce, according to the Visa report, with 38 percent of merchants in the country reporting the introduction of online offerings as a direct result of the pandemic while more than half had an e-commerce presence before the pandemic.




Two-thirds of the Saudi consumers said COVID-19 led to their first online grocery purchase, while 59% made their first online purchase from pharmacies. (GettyImages)


The report also said there was a surge in e-commerce, a preference for trusted brands, a decline in discretionary spending, and a polarization of sustainability. Consumers have a larger basket, but reduced shopping frequency, and will shift to stores closer to home. A change can easily be detected in Saudi consumer behavior.
But the shift to online commerce, with cash transactions being replaced by digital payments, has negatively influenced cash-only retailers and presents a tough challenge to these merchants, who have to understand the shift in consumer behavior and adapt accordingly and urgently.
“Saudi business owners currently face multiple challenges that they need to deal with when they want to shift to e-commerce, some of them even lack the knowledge of how technology could benefit them and what options it could offer,” Talal Abdullah, a business development and marketing consultant, told Arab News.
“Also some will need to find a technical partner to successfully transform to e-commerce and, most importantly, they need to revisit their business model canvas to determine how they want to employ this technology for the best of their businesses.”
In order to overcome these challenges, Abdullah suggested that business owners look for the right technical partner based on their new model.
“If they fail to find a suitable technical partner, then they need to set a clear budget for the application or website they need to set up. But before reaching out to any company that offers support with these technical services, you must get in touch with real clients of these companies and inquire about their business and how they deal with them.”
He added that seeking assistance from technical consultants or owners of similar projects could cut down on time and effort. Joining business accelerators and incubators, as well as entrepreneurship and technology communities, could help with expanding knowledge and relationships and contribute overall to a smoother transition.
But these changes have their costs too, imposing new financial burdens on an already weakened business due to the pandemic and the time required to build and adapt a new business model that targets a completely different group of customers. It is a serious challenge for many small retailers.
Abu Mohammed has been in the retail business for 20 years. He used to have frequent customers who came in for a specific type of clothing with a certain price range. But, with the lockdown, he could hardly sell anything.
“I began targeting a different kind of customer in the past couple of years where I was importing new clothes and selling them through Instagram and e-commerce websites,” he told Arab News. “However I still cannot completely substitute my current store with a completely virtual one. That needs time and money to build a reputation.”
He said the lockdown had been a harsh experience for him and that he recognized the need to expedite his old plans to transform his store into an actual brand, since people were gradually moving toward online shopping from well-known brands.
“This transformation is not going to be easy at all,” he added. “It will need a good marketing plan and well-spent money not only on tools but also staff. It is a completely new experience, however. I know e-commerce is here to stay and it is our only way forward. Otherwise my work for years will gradually vanish. This crisis could be a blessing in disguise, who knows.”


Riyadh Municipality confirms single company was responsible for recent food poisoning cases

Updated 04 May 2024
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Riyadh Municipality confirms single company was responsible for recent food poisoning cases

  • Officials said fast-food chain could be fined over the outbreak, which hospitalized dozens of people, and that all its branches and facilities in Riyadh and Al-Kharj remain closed
  • Saudi Ministry of Health said 75 people were affected in the outbreak, including one death

RIYADH: Riyadh Municipality confirmed on Friday that the initial results of an investigation by health authorities suggest a single company was responsible for several cases of food poisoning last week, caused by the bacterium Clostridium botulinum, that left dozens of people hospitalized.

It also confirmed the chain could be fined over the outbreak, which came to light on April 25, and that all of its branches and food-processing facilities in Riyadh and Al-Kharj remain closed.

The amount of any fine will be set according to existing legislation based on a full investigation and taking into account the severity of the effects of the incident on the people who became sick, the municipality added.

It did not say how long the company’s branches and other facilities would remain closed, but said all food products they contained would be destroyed and the process of cleaning and disinfecting all buildings, tools and machinery will be supervised by officials from the municipality.

“We confirm the safety of food products for restaurants, kitchens, cafes and caterers in the Riyadh region, as no cases have been recorded from other than the aforementioned source,” the municipality said.

The statement on Friday did not name the company involved, but Arab News reported last week that a number of food poisoning cases appeared to be linked to the Hamburgini fast-food chain.

Riyadh Municipality said health oversight teams took prompt action to investigate and monitor the situation as soon as they began to receive reports of the food poisoning cases.

On April 26, Nawaf Al-Fozan, the founder and CEO of Hamburgini, shared a video on the chain’s Instagram page in which he confirmed it was involved in the outbreak.

In a separate statement on Friday, the Saudi Ministry of Health also said that all cases in the food poisoning outbreak were linked to the same source.

The MOH said 75 people were affected in the outbreak, including one death, and that no new cases were recorded over the past five days.

"The total number of recorded cases stands at 75, including 69 Saudi nationals and 6 non-Saudis," said the statement shared on social media platform X on Friday by ministry spokesman Dr. Mohammed Al-Abd Al-Aly.

The statement noted that 50 of the cases were diagnosed as being caused by the bacterium Clostridium botulinum. The ministry explained that 43 patients have fully recovered and been discharged from hospital, 11 are currently undergoing treatment and 20 cases are being closely monitored in intensive care units, or ICUs.

"The ministry continues to closely monitor hospitalized cases and provide them with the necessary healthcare while wishing them a swift recovery," said the statement. It stressed "the importance of relying on its official sources for instructions and information, and not spreading rumors and false information."

 


How sustainable tourism can help preserve Saudi Arabia’s iconic desert wildlife 

Updated 04 May 2024
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How sustainable tourism can help preserve Saudi Arabia’s iconic desert wildlife 

  • With desert tourism on the rise, experts say visitors and developers have a responsibility to respect local fauna  
  • The deserts of Saudi Arabia are home to more than 4,000 animal species, many of them critically endangered

ALULA: Although Saudi Arabia is home to a wealth of ecosystems, from its coastal mangroves and coral reefs to its high-altitude forests and lush oases, the Kingdom is perhaps best known for its deserts.

However, these landscapes, which are fast becoming popular with outdoor adventurers, are home to a remarkable array of animals, which inhabited the region long before the arrival of humans.

Despite the hardiness of these animals, given the harshness of their environment, the encroachment of humans into these pristine habitats is raising concerns among conservationists.

“The rapid growth in tourist flows in recent decades has been accompanied by diversification, both geographically, and in terms of tourism segments or products,” Basmah Al-Mayman, Middle East regional director of the UN Tourism (formerly UN World Tourism Organization), told Arab News. 

“Desert destinations have shared in the benefits of this double-diversification process, making it an even more pressing priority to define a sustainable approach to tourism development in desert areas.”

As a Saudi national herself, Al-Mayman recognizes the value of the Kingdom’s precious ecosystems as a source of revenue and national pride. However, she believes the tourism industry, developers, and travelers themselves have a responsibility to act sustainably.

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“In the desert, more than anywhere, with destinations still relatively untouched by the adverse effects tourism can bring, sustainability represents a particularly critical challenge,” she said.

“The messages conveyed by UN Tourism are not only preventive in character, but also offer stakeholders at international as well as local levels the advice and tools they need to combat poverty and desertification while enabling tourism to properly play its role as a vehicle for development.”

The Nubian ibex isnow among the wildlife of Saudi Arabia. (Shutterstock)

According to UN Tourism, sustainability principles refer to the environmental, economic, and socio-cultural aspects of tourism development. A balance must be established between these dimensions to guarantee its long-term sustainability.

Sustainable tourism should therefore make optimal use of environmental resources that constitute a key element in tourism development, while maintaining essential ecological processes and helping to conserve natural heritage and biodiversity.

Falcons are among the most loved wildlife in the Kingdom. (SPA photo)

As the largest country in the Middle East, occupying more than 80 percent of the Arabian Peninsula, Saudi Arabia is home to five distinct climatic regions. 

These biomes include coastal fog desert, the southwestern savanna foothills, the southwestern montane woodlands, the Arabian Desert, the Nubo-Sindian tropical desert, and areas of semi-desert.

Ostriches racing at a conservation center in Jeddah. (Supplied)

Extensive hunting in the 19th century resulted in the population decline of many of Saudi Arabia’s indigenous animals, including oryx, leopards, and cheetahs. The Kingdom has since imposed bans on poaching and launched breeding programs to help bolster populations.

Other wildlife found in these habitats included striped hyenas, mongoose, baboons, sand cats, and hopping desert rodents known as jerboa. Visitors willing to brave the region’s harsh temperatures may be rewarded with a glimpse of a Nubian ibex, sand gazelles, or a whole array of reptiles. 

Gazelles restin one of the wildelife conservation centers of Saudi Arabia, safe from predators and hunters. (Shutterstock)

Occupying some 25 percent of Saudi Arabia’s territory, the Rub’ Al-Khali, also known as the Empty Quarter, is anything but what its name might suggest. The world’s biggest sand desert is in fact home to a dizzying array of wildlife.

Likewise, the Kingdom’s scrublands, steppes, mangroves, volcanic fields, palm oases, and mountain ranges are teeming with creatures — nesting, hunting, feeding, and burrowing, many of them out of sight, coming out only in the cool hours of night.

DIDYOU KNOW

• 2024 was designated the Year of the Camel by the UN and Saudi Ministry of Culture.

• AlUla has made great strides in ensuring that desert tourism is eco-friendly.

• UN Tourism has put forth structured targets to support sustainable desert tourism.

• National Center for Wildlife estimates there are 4,481 endangered species in the Kingdom.

No desert animal is perhaps better recognized than the camel. It is because of its iconic status that the UN and Saudi Arabia’s Ministry of Culture has designated 2024 as the “Year of the Camel.”

This year, Saudi Arabia will host several camel-centric events and organize special spaces to educate the public about these much-loved “ships of the desert.”

Just this past week, the second ever AlUla Camel Cup was celebrated in the Kingdom’s ancient northwestern region. The four-day event centered on the animal, which has become synonymous with the country’s identity. 

The camel has been the Bedouin’s best friend for centuries, as well as a loyal companion and a lifeline. (Shutterstock)

The camel has been the Bedouin’s best friend for centuries, as well as a loyal companion and a lifeline. Even the Prophet Muhammad relied on camels for transportation and as a source of food and fuel.

Camels are not the only animals getting their moment in the limelight. Saudi Arabia’s National Center for Wildlife and the Saudi Green Initiative have been working hard to ensure none of the Kingdom’s fauna is overlooked.

Assigning an animal to be championed during a specific year, month, or day has been instrumental in raising awareness about the wellbeing and conservation of the region’s distinctive species.

In 2022, the Royal Commission for AlUla launched a campaign for the recognition of “International Arabian Leopard Day.” In 2023, the UN General Assembly unanimously designated Feb. 10 as the “International Day of the Arabian Leopard.”

Facing extinction, the Arabian leopard is one of the wildlife species at the center of the Kingdom's animal conservation program. (Royal Commission of AlUla photo)

The Arabian leopard once enjoyed a range stretching across a large swathe of the Arabian Peninsula, from southern Jordan to Yemen. 

But, after years of human encroachment on its habitat, resulting in the depletion of its natural prey, the International Union for Conservation of Nature listed the big cat as a critically endangered species.

Saudi Arabia has long been at the forefront of animal conservation, with the Imam Abdulaziz bin Mohammad Royal Reserve Development Authority reintroducing more than 220 endangered species into the wild in the Kingdom’s royal reserves over the past five seasons. 

More than 220 endangered animal species have been reintroduced to the wild in Saudi royal reserves over the past three years. (SPA)

Much of this has been done in tandem with sustainable tourism initiatives, designed to protect the Kingdom’s ecosystems, while providing jobs, services, and prosperity to local communities.

For instance, in the ancient deserts of northwest Saudi Arabia, framed by curious rock formations with their dramatic silhouettes, the lush green oasis of AlUla has been continuously occupied by humans since before the 12th century.

Throughout that time, animals have been vital to the area and to the livelihoods of its human residents.

In line with Saudi Vision 2030, the Royal Commission for AlUla has launched an initiative to rehabilitate 65,000 hectares of degraded land, activating the space and resurrecting the harmony between humans and nature — an organic partnership that has defined the region for millennia.

The lush green oasis of AlUla has been continuously occupied by humans since before the 12th century. (RCU photo)

Besides AlUla, nearly every other desert space in the Kingdom has introduced curated tours that mindfully lead humans into the wilderness with the intention of enjoying, honoring, and respecting the animals that live there. 

The Kingdom has made significant strides in ensuring that its animals continue to flourish in a rapidly changing world and a nation that aims to become a major tourism magnet in the years to come.

But with more people, vehicles, and infrastructure coming to the desert, it is a collective responsibility to ensure visitors do so without disturbing these precious ecosystems and their animal inhabitants.
 

 

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Return of the leopard is at the heart of plans to conserve and regenerate Saudi Arabia’s landscapes and wildlife
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Saudi development fund signs cooperation deal with El Salvador

Sultan bin Abdulrahman Al-Marshad signed the agreement with Alexandra Hill Tinoco in Riyadh. (SPA)
Updated 03 May 2024
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Saudi development fund signs cooperation deal with El Salvador

  • The agreement is a step toward the financing of a water treatment and energy generation project using biogas in the area of the Acelhuate River, utilizing a development loan from the Saudi fund

RIYADH: The CEO of the Saudi Fund for Development Sultan bin Abdulrahman Al-Marshad signed on Friday an agreement aimed at opening doors for developmental cooperation, projects and programs in El Salvador, with the country’s Minister of Foreign Affairs Alexandra Hill Tinoco.

Also present at the signing ceremony in Riyadh were Haytham bin Hassan Al-Malki, the Kingdom’s ambassador to Mexico and non-resident ambassador to El Salvador, and El Salvador’s Ambassador to Saudi Arabia Ricardo Ernesto Cucalon Levy.

The agreement is a step toward the financing of a water treatment and energy generation project using biogas in the area of the Acelhuate River, utilizing a development loan from the Saudi fund.

This deal comes within the framework of the fund’s efforts to support the growth of vital needs in various countries to aid prosperity.

 

 


Beast House sets off on a unique music mission in Saudi Arabia

Updated 03 May 2024
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Beast House sets off on a unique music mission in Saudi Arabia

  • Ramadan Alharatani, CEO of MDLBEAST, told Arab News exclusively: “We see Beast House becoming a cornerstone of Riyadh’s music scene”
  • The multitiered members-only space provides an immersive experience for music producers, industry experts, creatives, and enthusiasts to connect and learn through its facilities

RIYADH: Only a few months after its recent launch, Beast House has become one of the Saudi music scene’s biggest assets, using MDLBEAST’s comprehensive strategy to enrich the Saudi music industry with solid infrastructure.
Driven by a vision to provide fertile ground in which to cultivate the region’s music culture, Beast House marks MDLBEAST’s debut investment in the music facilities sector in Saudi Arabia with an innovative tripod model that combines music, architecture, and technology to achieve its unique mission in the country.
Ramadan Alharatani, CEO of MDLBEAST, told Arab News exclusively: “We see Beast House becoming a cornerstone of Riyadh’s music scene, a place where creativity is nurtured and talents from the local and international scenes can grow. Our vision is to revolutionize the way music is experienced in the region by fostering connections in the creative community through the power of music.”
The multitiered members-only space provides an immersive experience for music producers, industry experts, creatives, and enthusiasts to connect and learn through its facilities, which provide live music events, workshops, studio spaces, and shared dining spaces.
“Beast House creates a platform for local artists to both showcase and hone their talents. In this space, members can collaborate with other artists through our diverse programming designed to elevate the experience of artists. It’s a welcoming space for anyone still finding their creative path,” Alharatani said.
The studio has two music production rooms with recording booths, a mix room with a Solid State Logic Origin mixing console, and a Neve recording room with a contemporary feel.
Alharatani said: “Beast House studio caters to artists of all levels, with a blend of traditional analog and modern digital equipment. We offer hands-on experience covering the entire production process, from recording to mixing and mastering.
“Our backline includes Fender guitars, Yamaha drums, and world-class microphones like Neumann, Royer, and AKG, alongside high-end outboard gear such as Neve, Bricasti, and UA 1176 compressors. We also provide a comprehensive selection of synths and drum machines from renowned brands like Roland, Moog, and Sequential, along with top-tier software and plugins including Pro Tools, Ableton, and Waves, offering artists endless sonic possibilities.”
The CEO said that these spaces are crucial for a developing music scene and nurturing the industry, and that Beast House is all about engaging the senses in a welcoming environment through its design, curated playlists, refreshments, and dynamic live shows.
He said: “By offering insight into songwriting, production, and the music business, we’re enabling the growth of local talent and opportunities. This fosters job creation, draws in tourism, and stimulates local businesses, which are key components in building a robust music infrastructure.”
But building more venues in the Kingdom is only a part of the MDLBEAST plan.
“Our strategy is built on three pillars — music and artists, live events, and venues — and through these three pillars, we can create a vivid music scene and opportunities for local and global artists to constantly engage with their audience,” Alharatani said. “All this leads to two main goals: support the innovative economy and entertainment tourism in the Kingdom, and guarantee the sustainability of our events.”
Alharatani believes that because this is the first private members’ club of this nature in Saudi Arabia, which may be foreign to some in the region, awareness will be key in getting the public to commit to memberships.
He said: “We’ve been spreading the word, giving people the lowdown on what members’ clubs are really all about. We’ve rolled out a few sneak-peek events to hook them on the experience, and we’re connecting with creative trailblazers to grow the right community. Here, membership is more than a pass — it’s the gateway to a hub where creativity grows and thrives.”
By combining technology, architecture, and music under one roof, Beast House studio’s specialized professional team hopes to use its technical excellence to elevate regional music to new levels.
The recording studio is expecting to become a destination for musicians who want to create memorable music that transcends boundaries and leaves a lasting impact on listeners, Alharatani said.


Housing minister meets with Chinese officials to boost Sino-Saudi cooperation, achieve Vision 2030 targets

Updated 03 May 2024
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Housing minister meets with Chinese officials to boost Sino-Saudi cooperation, achieve Vision 2030 targets

  • Al-Hogail’s visit also explored the possibility of attracting Chinese companies to the Saudi market

RIYADH: Saudi Arabia’s housing minister has returned from a trip to Beijing where he met with Chinese sector officials to “solidify the partnership between the two nations in construction and real estate development,” the Saudi Press Agency reported on Friday.

Majed Al-Hogail held a meeting with China’s Minister of Housing and Urban-Rural Development Ni Hong and Fang Qiuchen, the president of the China International Contractors Association.

Their discussions focused on developing joint housing policies and programs, exchanging expertise in city planning and sustainable urban development, and exploring investments in construction technology, SPA added.

Al-Hogail’s visit also explored the possibility of attracting Chinese companies specializing in building, construction, maintenance, and cleaning services to the Saudi Arabian market.

During his trip, Al-Hogail signed agreements and memoranda of understanding with major Chinese construction companies.

The Kingdom’s partnership with China to develop its housing sector is part of Saudi Vision 2030’s target of increasing home ownership in Saudi Arabia to 70 percent by improving housing affordability by the end of the decade.