Saudi Arabia can be an exciting and appealing option if you want to start or expand an online market globally. The country has a rapidly growing market of eager and Internet-savvy consumers. In the realm of e-commerce stores in Saudi Arabia, the potential for growth and expansion is both exciting and promising. In this E-Commerce Report, we will walk you through the Saudi Arabian market and the benefits and drawbacks of establishing an online market in the region. We will discuss the Saudi business culture.
Background Information on the Country
The Kingdom of Saudi Arabia is a large, young, thriving desert country in the Gulf Cooperation Council (GCC). Saudi Arabia has the world’s 47th largest population, with over 45% of the population under 24. Islam is the country’s official religion, and Sharia law governs the country. Despite a sizable expatriate community (immigrants account for more than 30% of the population), non-Muslims are denied citizenship. The capital, Riyadh, is home to over 6 million Saudis, accounting for 83.1% of the population.
The Saudi economy is based on oil, with petroleum accounting for nearly 42% of the country’s GDP. Following large drops in oil prices, the government has recently attempted to diversify the economy through private investment in the healthcare and tourism industries and improvements in telecommunications and natural gas exploration. The GDP of Saudi Arabia in 2022 was 1.11 trillion dollars.
The Saudi Business Environment
There are a few cultural differences in business practices between Saudi Arabia and the United States. Being aware of these distinctions is critical to conduct respectful and efficient business. The timing of the work week is a significant difference between the two countries’ business structures. Until June 2013, Saudi Arabia’s weekend was on Thursday and Friday, when it switched to the now-standard Middle Eastern work week of Saturday through Thursday. Saudi Arabia is also thought to have a less rigid and scheduled business model than the United States.
Building trust among business partners is essential to business in Saudi Arabia. Small talk is encouraged before discussing complicated business details, and business transactions should be quick. Meetings are typically scheduled around prayer times (which are typically listed in newspapers). The concept of personal space is an essential cultural difference in business meetings.
Saudi business people are generally more comfortable standing very close to who they’re talking with, potentially infringing on Western standards of personal space. It is critical to respect the business culture by getting to know business partners, not scheduling meetings too close to prayer times, and remaining comfortable with a potentially different standard of personal space.
Another essential aspect to be aware of in Saudi business culture is women’s limited role. In Saudi Arabia, public interaction between the two genders is minimal. Even in business settings, Western businesswomen may find it challenging to meet with a Saudi businessperson without a man present, if at all. Businesswomen should dress modestly both in public and at home. While Western businesswomen are generally accepted in the culture, there is far more mistrust than in business dealings with men.
Due to difficulties surrounding women in the workplace, such as a lack of women’s restrooms, the inability of Saudi women to drive or walk in public unaccompanied, and general discomfort in gender interaction, Saudi women make up only about 20% of the country’s workforce.
Conclusion
Because of its rapidly growing market of Internet-savvy consumers, Saudi Arabia represents a promising opportunity for e-commerce expansion. The business culture in the country differs from that of the United States, with a less rigid work week and a less strict business model. Trust is essential in business, and women’s under-representation in the labor force is also significant. Meetings are usually scheduled around prayer times, and women are expected to dress modestly. Despite these differences, Saudi Arabia’s GDP in 2022 is expected to be 1.11 trillion dollars.
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