Saudi Arabia’s soon-to-be-launched e-marketplace, cenomi.com, is looking to shake up the kingdom’s retail market, but how will it fare in the region?
Cenomi, formerly known as the Fawaz Alhokair Group, underwent a massive rebranding last month that saw it adopt online retail in addition to focusing on its bricks-and-mortar offerings.
Alhokair’s Arabian Centres Company became Cenomi Centres and Fawaz Alhokair Fashion Retail has been renamed Cenomi Retail.
Cenomi Retail represents more than 1,000 brands in Saudi Arabia, including Apple, Zara and Gap, and runs 21 malls and shopping centres in the country, with plans for eight malls in the pipeline.
The company also posted revenues of SAR5.9 billion ($1.5 billion) for its 2022 financial year, which ended on March 31.
The e-marketplace will give Cenomi Retail an additional channel to connect with shoppers in the kingdom. With Saudi Arabia opening up its market, it is poised to become one of the biggest in the region.
A retail consultant told Gulf News: “When a retailer with 1,700 plus stores decides to launch an online platform of this scale, it creates opportunities for Cenomi and the brands themselves.”
Mohamad Mourad, CEO and managing director of the Cenomi Group, told AGBI that Cenomi will have a similar model to global giant Amazon and regional rival Noon.com, but with a tight focus on fashion, beauty and lifestyle.
Cenomi Retail already operates 30 of its brands’ Saudi websites, said Mr Mourad, adding that “e-commerce is not 100 per cent new for us…”
But the company wants to move away from the models used by the Facebook family “which has different platforms to reach different consumers – Pinterest, Instagram and so on” said Mr Mourad.
Already in the UAE, retailers such as Emke Group, Emaar, Majid Al Futtaim Group, and Landmark have spearheaded trends to let shoppers use their online channels to order products.
Cenomi can do this with Saudi shoppers, too. The kingdom has a population of 35.91 million, more than half of whom – around 52 per cent – are between 25 and 54, according to Global Media Insight. Moreover, its internet users stand at around 35 million, which means that almost 98 per cent of its residents are connected to the internet.
Last year, Saudi owned Al Arabiya reported that Saudi Arabia’s e-commerce spend would grow in 2022 and that 60 per cent of people surveyed by Checkout.com prefer to “pay via digital payment methods – a 20 per cent increase year-on-year in 2021.”
It also reported that the Saudi government plans to have a 70 per cent cashless society by 2030, adding that the pandemic had accelerated e-commerce growth in the region.
Checkout.com, in its latest Mena report, said that 91 per cent of consumers across the region bought products online in the past year, with fashion and clothing making up 46 per cent of all online purchases in the region. One in five consumers across Mena purchase retail products online more frequently than 2021, with 33 per cent shopping more frequently for fashion and clothing online.
The report also cited that 26 per cent of consumers in Saudi Arabia say that digital wallets are their number one most preferred payment method for e-commerce, meaning that e-commerce is witnessing a massive uptick in consumer base.
With such a young and tech-savvy population to tap into, e-retailers have a high chance of success in Saudi Arabia.
Retail sources told Gulf News that once the portal launches, Cenomi’s current customer base will easily offer the initial boost. Additionally, the new e-marketplace can influence events if the average spend rises.
The company wants to completely change the shopping experience in the kingdom, Mr Mourad told Gulf News, adding that Cenomi will be deploying “in-country fulfilment centres to ensure clear tracking of product inventory levels”.
“Both within those centres and within our stores, to provide quick, convenient and hassle-free delivery to consumers’ doors or the ability to click-and-collect at a time of their choosing.”
Noon was launched in 2017 in the UAE and Saudi Arabia, while Amazon was officially launched in the UAE in 2019. It later opened its website in Saudi Arabia in 2020. The companies in 2021 posted US$251.7m and US$520.1m in revenues respectively.
