In an exclusive statement to “Arqam,” Abdullah Iftahi, Partner and Principal Leader for Retail and Consumer Behavior at McKinsey Middle East, shared the firm’s projections that e-commerce will account for over 25% of retail sales in the Kingdom by 2035, up from the current rate of approximately 10%.
🔅 Key Drivers: Millennials and Younger Generations
It’s expected that 80% of the total expenditure in 2035 will come from Millennials and younger generations, compared to less than 35% currently, reflecting a significant shift in market dynamics.
🔅 Multidimensional Market Influences
Iftahi highlights several impactful factors such as inflation, developments in infrastructure, and timely offers in the food and beverage sector that will shape the market in the current year.
🔅 The Middle Class and the Future of Consumption
The forthcoming report indicates that the middle class will constitute 75% of the population by 2035, with expectations of significant changes in household composition and an increase in individual income levels.
🔅 E-commerce and Personalization
With the rise of e-commerce, Saudi consumers are expected to demand more personalized interactions, indicating high expectations from future consumers.
🔅 Challenges and Opportunities for Companies
Iftahi emphasizes the importance of companies adapting to changing consumer preferences and integrating digital and analytics into their strategies to ensure a seamless online experience and exploit growth opportunities by understanding the evolving value chain.
