BinDawood Holding has signed an agreement to purchase a 62 per cent market share in e-commerce partner International Applications Trading Company (IATC) as it seeks to capitalise on the higher demand for online shopping.
IATC has developed and operates a number of e-commerce platforms for BinDawood Holding’s retailers, including hypermarket and supermarket chains BinDawood Stores and Danube, and luxury clothing retailer ETRE.
“The acquisition of a majorit stake in IATC is a major step towards enhancing our e-commerce offering and strengthening our omnichannel presence – enabling BinDawood Holding to control the future growth of its business in an increasingly digitally connected world,” said Ahmad BinDawood, chief executive of BinDawood Holding.
The deal is expected to close in the second half of the year.
The retailer has paid SAR107.5 million and will invest up to SAR160 million over the next two years to improve overall performance of its e-commerce platforms and fulfilment centres to quicken delivery windows, according to BinDawood.
The company said the acquisition will help “support the development of platforms and the roll-out of a network of state-of-the-art dark stores and fulfilment centres to optimise operations, fully integrate the customer experience and provide shorter lead delivery times”.
During 2019 and 2020, Saudi Arabia’s e-commerce market grew 60 per cent amid the pandemic and digital transformation age, according to a report by global management consultancy firm Boston Consulting Group and multinational technology conglomerate Meta Platforms.
The report estimates e-commerce will be worth $13.5 billion by 2025.
The grocery retail market is expected to grow by 2.8 per cent each year to reach SAR177.5 billion by 2027, with its e-commerce penetration rising from 0.8 per cent to 3.5 per cent, says market research firm Euromonitor and accounting organisation Klynveld Peat Marwick Goerdeler.
By 2028, BinDawood aims to manage 30 per cent of the e-commerce grocery market.
“Expanding digital transformation and technical solutions is in line with Vision 2030,” said Mr BinDawood.
“Saudi Arabia is among the largest and the fastest-growing e-commerce markets in the region, with e-grocery shopping still in a nascent phase.
“I am confident that this strategic acquisition will put BinDawood Holding in a prime position to capitalise on the growth of the sector.”
