Identifying the top retail chains in Saudi Arabia where you can sell your products is relatively easy. Approaching and convincing them is a much bigger challenge.
It may be a better strategy to find a distributor first who can help you to get your products in smaller chains or individual stores, and then help you to get to the big names. Or to start online.
In this article you will find more information on the retail market and guidance on how to convince retailers and distributors to work with you.
Saudi Arabia, the largest country in the Middle East, has a population of about 35 million as of 2023. It is the world’s largest oil exporter, deeply influencing its culture, economy, and politics.
With a high GDP per capita of approximately $23,000 USD in 2023, Saudi Arabia’s economy is heavily dependent on oil, which accounts for most of its export earnings and government revenues. The country is diversifying its economy, with significant investments in sectors like tourism, entertainment, and technology.
The Kingdom of Saudi Arabia is the largest economy in the Arab world. It accounts for 25% of the Arab world’s Gross Domestic Product (GDP). Saudi Arabia has an oil based economy with strong government controls over major economic activities.
Strengths of the Saudi market include:
Challenges include:
You must apply through the relevant government ministries for licenses to do business in Saudi Arabia.
You must have a physical presence in Saudi Arabia to be directly involved in the buying and selling of goods. Under Saudi investment law the establishment of a physical presence requires a joint venture with a Saudi partner. You should evaluate your business partner thoroughly. You should take local legal advice and consult.
Here are some practical guidelines:
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If you have a consumer product that you can’t sell directly from your home country to your end customer, you need at least one step in between. This can be a distributor (who also acts as wholesaler or importer), a big retailer directly, or it can be a large web shop. Let’s look at the pro’s and con’s of each option.
You should put a lot of emphasis on drafting a good distributor pitch. Even if you already have great sales materials for your end-users, this often does not make clear what the benefits are for a potential agent, distributor or retailer to work with you.
When you approach potential sales channels with your standard documentation, chances are high that they are holding of. If you make it crystal clear what are the benefits for them, like in the example presentation, you will get a much higher response rate.
Please note that it helps to put concrete data in your presentation. You may think it is sensitive, but just know the secret is in how you achieve the rotation or the low returns level, not in the data itself. So share it here, in order to get the right attention.
Distributors are risk averse, they know the portfolio they have and tend to be happy with it. They can’t just add a product or service to their range, since it will cannibalize on others: