E-commerce in Saudi Arabia - Empowering Saudi SMEs

Saudi Arabia Champions E-commerce: SMEs take the digital challenge with PepsiCo Scale Up Accelerator

The digital space of today has grown to innovate for all types of businesses. Thanks to the accessibility of tech and digital solutions, more and more SMEs are making the shift towards a data-driven and digitally-savvy mode of operation.  A prominent aspect of this transition is the uptick in e-commerce in Saudi Arabia that the world has seen in the past few years, during which the pandemic has accelerated at an unexpected rate.

Saudi Arabia remains a prime environment for the region’s e-commerce shift to flourish. The Kingdom is home to almost 900,000 SMEs, which constitute 90% of all of its registered businesses, according to Monsha’at’s SME Monitor report. Of these SMEs, the report found that 84% are still lacking when it comes to implementing e-commerce as a revenue stream. This means that there is an exceptional opportunity for almost 750,000 SMEs in Saudi Arabia to establish a digital presence and massively boost their market share.

We have recently partnered with PepsiCo and CODE to launch the PepsiCo Scale Up Accelerator program in Saudi Arabia. This initiative is aimed at empowering Saudi and Saudi-based SMEs in the e-commerce sector by providing them with the necessary resources and mentorship to scale up their businesses digitally.

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E-Commerce in Saudi Arabia: Building Capabilities

Impact at the Forefront 

PepsiCo is familiar with the needs of the Saudi market, having led initiatives like PepsiCo Greenhouse and the Arab Youth Hackathon over the past 6 years. We caught up with Omar Al-Arabi, Head of Communications at PepsiCo Saudi Arabia, as he highlighted the importance of supporting the Saudi ecosystem through such innovative enablement programs.

Following an extensive outreach campaign, the PepsiCo Scale Up Accelerator welcomes its first 100 Saudi-based businesses to participate in a two-month acceleration program which includes mentoring and training sessions, as well as networking opportunities.

Participants in this cohort are honing their skills across several fronts, such as building a revenue-positive digital business model, setting up their operations in Saudi Arabia, as well as leveraging digital technologies to expand their client base and solidify their online presence in the market.

Building capabilities and promoting growth and sustainability in the Saudi e-commerce ecosystem are key targets under Saudi Vision 2030. On a broader scale, the program also aims to raise awareness of the importance of this sector within the Saudi economy and the necessity of fostering its development. 

An important mandate of the vision is increasing the contribution of SMEs to the national GDP to 35%. In this light, Al-Arabi considers the program a way to give back to the budding community of Saudi-based entrepreneurs and accelerate this contribution.

PepsiCo Scale Up Accelerator’s expansive coverage of different sectors is what sets it apart. The program casts a wide net, catering to diverse industries from cosmetics to entertainment to digital products, all of which show great promise for growth in the Saudi ecosystem. For instance, the halal cosmetics industry in Saudi Arabia is expected to generate 22.87 billion USD by 2030, with color cosmetics alone becoming a 1,197 million USD market in the Kingdom by that time. 

Entertainment is also a Saudi industry with massive opportunities. With a projected market size of 1.17 billion USD by 2030, it constitutes a top priority for Saudi Vision 2030. Initiatives like Saudi Seasons, launched in 2019, are priming the market for a vibrant entertainment ecosystem. By championing these emerging industries, we are investing in scores of untapped potential.

Another defining feature of the program is the measurable results that it will yield. The program will analyze essential metrics such as conversion rate and revenue streams, illustrating the real and tangible impact of digitization in the SME landscape. Measuring impact in this manner is a critical step to optimize and unlock the market’s full scope of possibilities.

Ecosystem Collaboration: Governments, Corporates and Enablers

Combining Expertise for a Thriving Ecosystem 

AstroLabs, PepsiCo, and CODE have each had a vital role in shaping this comprehensive program following the shared vision for the e-commerce sector in Saudi Arabia.

PepsiCo Scale Up Accelerator makes use of PepsiCo’s expertise in areas such as supply chain, business development, and R&D, allowing participants to commercialize their ideas for a global audience. 

MCIT’s CODE is supporting this collaboration in accordance with Saudi Vision 2030. This comes as yet another step toward achieving the objectives set by Saudi Arabia in reinforcing the essential role of both SMEs and e-commerce in the Kingdom’s development strategy.

To complement this contribution, AstroLabs is equipping the businesses partaking in the program with practical and applicable knowledge and tools that will help them digitize and elevate their operations immediately after graduating. We are also transferring our knowledge of the local and regional ecosystems so that graduates can develop a good understanding of the markets they are catering to. 

Depending on their strengths, needs, and areas of growth, we are making sure participants can access a number of useful tools and skills. SMEs with no digital front are learning to set up online channels and processes, such as running an e-commerce website or app, activating and integrating digital payment gateways, or reaching new audiences through online marketplaces and delivery apps. As for businesses with an already established digital presence, they benefit from tips and lessons on devising efficient digital marketing strategies, targeting a wider clientele through paid ads, and SEO optimization.

E-Commerce in Saudi Arabia: Movement For Success

A New Generation of E-commerce Leaders 

Designed for high impact, PepsiCo Scale Up Accelerator is already lifting the rising stars of Saudi e-commerce by putting the right solutions in their hands and encouraging them to pursue a journey of growth and accomplishment. But perhaps the most impactful aspect of the program is the inspiration it is instilling in the Saudi entrepreneurial landscape.

Aamer Sheikh, CEO at PepsiCo Middle East, believes that we are witnessing a “movement” today. He expects that the 100 entrepreneurs who are taking part in this program will help fuel the ambition of many more.

One of Saudi Arabia’s best assets is the drive and perseverance of its up-and-coming talents and entrepreneurs. This program is a way for us to encourage them to take the leap into the world of entrepreneurship, armed with the right arsenal of capabilities to join the thriving Saudi SME and e-commerce community. This ripple effect is a main facet of the impact we are striving to achieve.

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