Business & Money | Sunday 22 November, 2015 9:33 am |

Arabian Centres, the leading developer, owner and operator of shopping malls in Saudi Arabia, today launched a campaign to promote the Kingdom of Saudi Arabia (KSA) as a prime market for organic growth for international retailers seeking to enter or expand into the Middle East. Launched at Mapic, the annual international retail property market conference in Cannes, the ‘KSA Advantage’ will provide an umbrella for a series of events, materials and discussions in the coming 12 months. 

 

Announcing the campaign at the MAPIC conference in Cannes, Simon Wilcock, CEO of Arabian Centres said: “The KSA Advantage is a call to action for international retailers who want to expand into one of the highest-growth retail markets not just in the Middle East, but anywhere in the world today. We have launched the campaign at Mapic to raise the debate on why Saudi Arabia should be part of every international retailer’s growth plans.”  

 

The KSA Advantage

Saudi Arabia is the Middle East’s wealthiest economy at US$746.2bn, and the region’s largest retail market, with sales of listed retailers – a proxy for industry growth – rising 12 per cent in 2014. Overall consumer spending leapt 18 per cent year-on-year in August, in defiance of lower oil prices, while cash withdrawals from automated teller machines (ATMs) passed SR63.2bn, up 11 per cent on the same period last year. By comparison, consumer spend in Britain saw year-on-year growth of 1.4 per cent in June – a five-year high. 

 

Saudi Arabia plays host to a vast, young population, with a propensity to spend. Around two-thirds of its 30 million residents are under the age of 30 – and the population is swelling by 2 per cent a year. Trickle-down oil wealth, paired with an increasingly diversified economy, saw gross domestic product per capita in Saudi Arabia rise to a record high of $52,095.88 in 2014. The GDP per capita, in Saudi Arabia, when adjusted by purchasing power parity, is equivalent to 293 per cent of the world's average. Efforts to encourage more Saudis into the workplace have also borne fruit – more than 3 million women have joined the labour force since 2011 - expanding the country’s earning class. The result is one of the world’s youngest and fastest-growing consumer bases. 

 

Simon Wilcock added: “The coming years will see a significant shift to organised retail in the Kingdom, driven by international retailers entering the Kingdom’s vibrant retail space. For those brands looking to enter or grow their footprint in the Middle East’s largest retail market, the potential rewards are vast.

 

“Clearly there are challenges to entering this market. But by launching our campaign, we aim to help smooth the path for retailers looking to tap into the enormous potential that Saudi Arabia has to offer.” 

 

For multinationals seeking to position their brand regionally and gain scale, Arabian Centres is unique in its capacity to offer critical mass. The company is part of Fawaz Alhokair Group, one of the most respected businesses in Saudi Arabia, and the kingdom’s largest retailer. Arabian Centres currently operates 17 retail properties across 10 cities in the kingdom, representing about 10 per cent of Saudi Arabia’s organised gross leasable area, and is set to double its portfolio to nearly 2 million square meters in the next three years. Arabian Centres’ malls attract 131 million visitors each year and the company saw a more than 27 per cent rise in footfall in the first nine months of this year (January – September 2015). Occupancy rates are at 97 per cent, with malls reaching capacity within three months of opening.