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Saudi Arabia has climbed nine places to secure the third position in the Global Retail Development Index (GRDI), propelled by a surge in non-cash transactions and strategic economic initiatives.
The index, which assesses the retail potential of emerging economies, highlights the kingdom’s progress in diversifying its economy away from oil dependency and fostering a favourable business environment.
Reflecting MENA’s growth trajectory
The 2023 edition of the GRDI, conducted bi-yearly by US consulting firm Kearney, underscores the Middle East and North Africa (MENA) region’s upward trajectory in global retail development. The findings not only emphasise Saudi Arabia’s pivotal role but also underscore its strategic shift towards digital adoption and consumer-centric strategies.
Debashish Mukherjee, partner at Kearney Middle East and Africa, and Consumer and Retail Practice Lead, highlighted the MENA region’s prominence in driving the next wave of retail growth.
He emphasised the region’s strategic embrace of digital technologies and consumer-focused strategies, which are redefining the retail landscape. Mukherjee, stated, “The MENA region, and notably the Kingdom of Saudi Arabia, are at the forefront of retail’s next wave of growth. The 2023 GRDI illustrates how these markets are redefining the retail ecosystem with strategic digital adoption and consumer-centric approaches.
“Saudi Arabia’s impressive rise in this year’s GRDI is a clear indicator of its dynamic retail environment and its strategic initiatives to foster a competitive and diverse economic landscape,” he added.
Rise in non-cash transactions
The kingdom’s ascent in the GRDI can be attributed to the remarkable surge in non-cash retail transactions, which have increased from 16 percent in 2016 to 62 percent in 2022, with a target of reaching 70 percent by 2030.
Furthermore, strategic initiatives such as the employment of Saudi nationals in high-skilled jobs and the doubling of female workforce participation have exceeded Vision 2030 targets, contributing to the country’s economic diversification.
Key factors driving retail
Factors contributing to Saudi Arabia’s rise in the index include the growing popularity of buy-now-pay-later services, increased investment deals and licences in 2022, and the integration of digital and artificial intelligence technologies in the consumer market.
The report provided a snapshot of the key factors underpinning Saudi Arabia’s impressive climb in the GRDI rankings:
- Achieving substantial growth in the employment of Saudi nationals in high-skilled jobs and doubling female workforce participation, exceeding Vision 2030 targets.
- A rise in non-cash retail transactions from 16 per cent in 2016 to 62 per cent in 2022, aiming for 70 per cent by 2030.
- Growing popularity and adoption of Buy Now Pay Later services, with domestic providers Tamara and Tabby paving the way.
- Significant increases in investment deals (95 per cent) and licenses (267 per cent) in 2022, signaling a strong economic climate.
- Digital and AI Integration within the Saudi consumer market, with the rapid adoption of mobile commerce and AI-enabled experiential retail.
- The entry of international brands and the expansion of entertainment and lifestyle sectors indicate a thriving retail environment.
Guiding retailers in emerging markets
The GRDI serves as a valuable guide for retailers seeking to navigate the complexities and capitalize on opportunities within emerging markets.
With Saudi Arabia’s strategic initiatives and dynamic retail environment, the kingdom continues to emerge as a key player in the global retail landscape.
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