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Saudi Arabia 2016: Business Insights & Digital Landscape

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The report contains data & insights explaining how corporates will change marketing budgets in Kingdom of Saudi Arabia, how competition will change and how consumer behaviours will drive changes in digital marketing in 2016.

Published in: Business

Saudi Arabia 2016: Business Insights & Digital Landscape

  1. 1. Disclaimer All rights reserved to ‘Identity for Brand Development’. The content & information provided in this Report are meant to provide general information to interested parties. Information presented in this Report is considered private property of Identity for Brand Development & may not be distributed or copied. By receiving this Report you will be deemed to have accepted the disclaimer.
  2. 2. Index 1. Business: Summary 2. Global innovation index, local competition and market concentration 3. Global opportunity index 4. Economics, Society & Technology 5. Summary of digital • Annual growth • Digital device ownership • Time spent with media • Internet users: perspective • Frequency of Internet use • Share of web traffic 6. Social media use • Top active social platforms • Facebook user profile 7. Mobile users & connections • Mobile connections • Mobile activities 8. E-commerce by device 9. Conclusions
  3. 3. Business Summary
  4. 4. Business Summary • KSA is among three the most attractive countries in terms of global innovation index, local competition and market concentration in the Gulf & Africa. • KSA is among six the most attractive countries in terms of global opportunity index in the Gulf & Africa. • KSA is among the most attractive countries in terms of digital landscape. • KSA is among six the most attractive countries according to results of economic, social and technological factors analysis. See summary below & details further in the report. Among 3-6 the most attractive countries* Global innovation index, local competition and market concentration Global opportunity index Digital landscape Economic, Social and Technological Analysis KSA Yes Yes Yes Yes * Conclusions are based on cross-country comparisons among Bahrain, Egypt, Jordan, KSA, Kuwait, Morocco, Nigeria, Oman, Qatar, South Africa and UAE
  5. 5. Global Innovation Index, Local Competition and Market Concentration
  6. 6. Global Innovation index, Local Competition and Market Concentration KSA is among three the most attractive countries in terms of global innovation index, competition and market concentration. * Country Global Innovation Index (Percentage Rank) (1) Intensity of Local Competition (2) Extent of Market Dominance (3) KSA 0.70 73.5 4.6 Key to table Attractive factor Neutral factor Discouraging factor Sources: (1) www.globalinnovationindex.org/content/page/data-analysis/ , (2) 100 = extremely intense https://www.globalinnovationindex.org/content/page/data- analysis/ , Higher competition means healthier markets and more demand for marketing and advertising services (other things equal). (3) how corporate activity is characterized in the below countries (1 = dominated by a few business groups; 7 = spread among many firms) http://www3.weforum.org/docs/GCR2013- 14/GCR_Pillar6_2013-14.pdf * Conclusions are based on cross-country comparisons among Bahrain, Egypt, Jordan, KSA, Kuwait, Morocco, Nigeria, Oman, Qatar, South Africa and UAE
  7. 7. Global Opportunity Index
  8. 8. Global Opportunity Index Country Composite (Score/Rank) (1) Economic Fundamentals (1) Ease of Doing Business (1) Quality of Regulations (1) Rule of Law (1) KSA 6.41/36 5.45/52 6.79/41 6.40/40 7.00/21 Source: (1) http://www.globalopportunityindex.org/opportunity.taf?page=compare Explanation: Each category measures an aspect of the power of economic and institutional factors to attract foreign direct investment. The assigned composite index value is the average score of the four categories (called component scores). Each variable is normalized from 0 to 1. Within each category, the normalized variables are then given equal weight and aggregated, resulting in a normalized category score between 10, indicating the most favorable conditions for investment, and 0, signaling the least favorable. Economic Fundamentals measures the extent to which a country's macroeconomic environment is conducive to foreign direct investment. A value of 10 indicates very strong economic fundamentals, while a value of 0 indicatesrelatively weak conditions. Ease of Doing Business measures explicit and implicit costs associated with business operations. A value of 10 indicates very low costs of doingbusinessin a country, 0 – very high. Quality of Regulations/Regulatory Barriers to Investment assesses the effectiveness of policymaking and enforcement in a country and similarly reflects the extent to which a country's laws and regulations prevent the free flow of trade and investment. A value of 10 indicatesefficient enforcementof policies andminimalbarriersto capital flows,while a value of 0 indicatesthe opposite. Rule of Law reflects the extent to which a country's legal system protects investors and property rights to support and enhance business investment. A value of 10 indicatescommitment tothe rule of law, while a value of 0 indicates the opposite. * Conclusions are based on cross-country comparisons among Bahrain, Egypt, Jordan, KSA, Kuwait, Morocco, Nigeria, Oman, Qatar, South Africa and UAE Key to table Attractive factor Neutral factor Discouraging factor KSA is among six the most attractive countries in terms of global opportunity index in the Gulf & Africa. *
  9. 9. Economics, Society & Technology
  10. 10. Economics, Society & Technology Country Opportunities Economic factors • Weakening economies of other oil producing countries will allow KSA to strengthen its dominating positions in the global oil market. This way KSA will strengthen its global economic positions and growth of its markets. • State policies will keep the markets running for a while generating demand for business development e.g. marketing and advertising • Activation of equity market, broadening of investor base • The Saudi Riyal is pegged to the US dollar, it is an attractive aspect for foreign investors considering the stability of currency, trade and income flows Social factors • Average size of consumer markets • High demand for luxury goods and premium trademarks • Relative variety of ethnic groups and niche demand, need of targeted marketing strategies • Business opportunitiesfor businesses targeting youth and parents of young children • Multinational companies need expert support in marketing their products due to cultural and legal limits Technological factors • Development of smart telecoms, smart industries, smart governments and smart cities all running on smart infrastructure, hence new jobs opening & establishing of new businesses • New employment opportunities & establishing of new businesses • New digital ways of doing business, demand for digital marketing and advertising Key to table More opportunities than threats Opportunities and threats are balanced More threats than opportunities KSA is among six the most attractive countries according to results of EST analysis. * * Conclusions are based on cross-country comparisonsamong 11 countries: Bahrain, Egypt, Jordan, KSA, Kuwait, Morocco, Nigeria, Oman, Qatar, South Africa and UAE All the sources and detailed factors are available upon request. Email us: info@identity-mena.com
  11. 11. Source: We are social KSA Digital Landscape – 2016
  12. 12. Social Media Use Source: We are social
  13. 13. Mobile Users & Connections Source: We are social
  14. 14. E-commerce by Device Source: We are social
  15. 15. Conclusions • Corporates will at least maintain same marketing budgets and will even increase it in order to rectify any possible recession caused by the drop of oil prices. • The competition will be very aggressive due to the above conclusion. • People in KSA are spending 2 hours daily on TV and 8 hours on internet (4 times more). Corporates should consider this ratio while allocating budgets. • KSA Digital landscape is very rich and powerful, empowered by the percentage of the young generations as well as the dominance of smart phones. • In digital & e-commerce, corporates should pay more attention to the mobile optimization of their digital assets and services.
  16. 16. Egypt: 6 A – Street 200 - Maadi - Cairo Tel: +20 2 25201180 F: +20 2 25170530 E-mail: info@identity-mena.com www.identity-mena.com Lebanon : Plot 613/3 Rmeil, Ground Floor, Jesuits Building,Greek Orthodox Hospital Street, Beirut Telefax: 00 961 1 429300/1 Saudi Arabia: P.O.box 126895 Jeddah 21352, Tel: 0122732302,+966556361973 F: 0122632303. Tahlia Street, Almanara bld,1st floor, office #13 - Jeddah

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