What’s Leading To KSA’s Growing Digital Economy?

How are digital-first startups and brands evolving in Saudi Arabia to bring a wave of digital transformation to the country?

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  • With the Vision 2030 initiative, the Kingdom of Saudi Arabia set itself on a route to transform into a fast-growing digital economy—an aim achievable only by embracing disruptive technologies. According to the latest forecast from the International Data Corporation (IDC), ICT spending in the Kingdom is projected to soar beyond $34.5 billion this year, with sizeable investments in AI, IoT, cybersecurity, and big data analytics. 

    Through the years, the region has been making strategic moves to bring the digital transformation plan to action, and figures speak of noticeable success. The country with the largest IT services and consulting market in the GCC, Saudi Arabia announced major investments like a $2.1 billion boost from Microsoft to build a “super-scaler cloud”, $1.5 billion from Oracle to drive Saudi’s cloud-computing capacity, and $400 million from Huawei to enhance the kingdom’s cloud infrastructure.

    At this juncture, we spoke to marketing and CX technology experts in KSA about the expectations of the digital-first customer, and what digital startups and brands in the region are doing differently to bring a wave of digital transformation. 

    How are brands in KSA evolving to aid digital transformation?

    The customers in KSA are characterised as a young and tech-savvy population, a change which is driven by the high penetration of the internet and the increased reliance of consumers on digital channels for shopping, services and content consumption. 

    Mobile-first outlook

    Vox Pop KSA's Growing Digital Economy Saed Basseet

    Brands are paying more attention to cater to the necessities of the digital-first customer. How? “By optimising their websites for mobile use,” says Saed Basseet, Executive Director of Marketing and Customer Experience at Lean Business Solutions. Companies are developing apps that provide a seamless, convenient, and engaging experience, he adds. 

    Vishal Badiani, General Manager at Atomic Digital Design, agrees. He says digital-first isn’t enough anymore. People expect mobile-first. Simply having an app or a website is now merely hygiene and no longer a differentiating factor. Badiani says the challenge now is “What next?” 

    What’s Leading To KSA’s Growing Digital Economy?

    How can we make the customer experience on a website or in an app more valuable and memorable? He emphasises the need for a shift from thinking about the channel to investing in being customer-first. 

    “Brands have been relatively quick to get going with websites and apps, which is a great starting point. However, it’s crucial to build the right ‘plumbing’ for these experiences in terms of data and content systems,” he adds.

    Increased social media usage

    Next, says Basseet, KSA showcases a high social media usage rate, which is leading to brands investing heavily in social media strategies to engage with the customers and offer them ecommerce capabilities, and providing comprehensive online customer service, using chatbots, online support tickets, and customer service via social media channels.

    What are digital-first startups doing differently?

    Under Saudi Arabia’s Vision 2030 initiative, startups are bringing a wave of digital transformation by not just implementing digital technologies but primarily building themselves around them, says Basseet. 

    Significance of adapting to the local culture

    What differentiates the startups in KSA is they are merging international technology trends with solutions for local market needs. “They’re not just bringing solutions that worked in other countries; they are adapting and developing them to address the Saudi market culturally, socially, and economically,” says Basseet. Moreover, they often collaborate with local businesses, international startups, and government entities. These partnerships help merge valuable local insights with global perspectives, fostering a more innovative approach to different business models, he adds.

    Fail-fast approach: Agility and innovation

    The digital-first startups are embracing a culture that values agility, innovation, and customer-centricity. “They are more willing to take risks compared to traditional companies, driving forward new ideas, testing them, failing fast, and repeating them until they find success,” says Basseet. By doing so, digital-first startups in the country are more than just participants in the digital transformation wave; “they are active facilitators and catalysts for change,” he adds.

    To this, Badiani agrees that digital startups don’t have the legacy of a predominantly offline brand experience to “translate” online, which gives them agility and the opportunity to do things with the customer very much front-of-mind. This gives them space to “try new approaches at a lower cost – with the ‘fail fast’ mentality.”

    KSA’s future martech landscape

    Increased reliance on data

    With more transactions moving online, there’s an exceptional amount of consumer data available, explains Basseet. This will increase reliance on data analytics tools to understand customer preferences, behaviours, and purchasing patterns, enabling targeted and personalised marketing strategies. “Brands must keep improving their predictive analysis models, customer segmentation, personalised content creation, the effectiveness of marketing campaigns, and personalised customer service.”

    Omnichannel capabilities

    Basseet says the future is not just digital but omnichannel, where the integration between online and offline must be seamless. “Technologies that enable consistent messaging and experiences across multiple channels are becoming a must. Tools that provide a holistic view of the customer journey, helping brands ensure consistency, engagement, and personalised experiences across all touchpoints, will be essential.”

    Additionally, tools and technologies enabling brands to target audiences on a local level will see increased demand, Basseet emphasises. “This trend is driven by the understanding that even in a digital space, local culture matters, and personalising content to reflect local preferences can significantly boost relevance and engagement.”

    Disruption with AR, VR

    Badiani says partnerships between bigger established corporations and newer, innovative startups will be a key highlight of the future martech landscape in the region. As we notice novice patterns in online shopping, we also can see the new roles companies are hiring for—some of which don’t fit the old definition of “normal,” for instance, the Chief Innovation Officer.  

    As people get more accustomed to shopping on their phones, explains Badiani, the experience will evolve to become even more dynamic, interactive and innovative. “Just as the computer and the smartphone caused huge disruption to the way we sell, I believe spatial computing, including AR, MR and VR, will be the next big disruption,” he adds. 

    Basseet concludes that Saudi Arabia is a cashless society, and there has been an increase in secure and diverse digital payment solutions to complement the purchase experience. This shows that the future martech landscape in KSA represents a blend of advanced technology adoption and personalised consumer experiences. “As the market matures, the brands equipped with the right mix of technology, strategy, and consumer-centric approaches will thrive in the increasingly competitive digital ecosystem,” he adds.

    Basseet and Badiani will take the stage at Vibe Martech Fest, Saudi Arabia, at Crowne Plaza Riyadh Al Waha, Saudi Arabia, on 8 November 2023. For more information, visit Vibe Martech Fest, Saudi Arabia.


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