Arab News, Wednesday, Jan 13, 2021 | Jamadi Al Awwal 29, 1442
‘Uber of Saudi Arabia’s online gifting industry’ sees 1,500% surge in orders during pandemic
Saudi Arabia: Resal – a startup often referred to as “the Uber
of Saudi Arabia’s online gifting industry” – reported a 1,500 percent
year-on-year increase in sales last year, as workers stuck at home as a result
of the coronavirus disease (COVID-19) pandemic embraced e-commerce portals.
“I think during the pandemic, the e-commerce and the digital products and
services helped a lot of people to survive, to send a reward and gifts, to help
people educate their child and help us to deliver food and even medicine or
health (services),” Hatem Kameli CEO and founder of Resal, told Arab News.
However, he said the move to online had already begun before the virus outbreak
and the health crisis had only helped to drive its acceleration. “Their behavior
had changed even before the pandemic. The pandemic helped to explain the impact
of e-commerce and digital startups.”
Resal is a digital platform specialized in facilitating and simplifying the
gifting experience and allows users to order a range of gifts, such as flowers,
chocolate, and other items.
It had a soft launch in Jeddah in September 2016 and officially started
operations in February 2017. “Since that time, we developed a lot of
technologies and developed infrastructure to be ready for any scalability
opportunity, any opportunity in the market to scale, to grow, and to catch the
market share,” Kameli added.
The company currently delivers to 40 Saudi cities and is planning to expand
outside the Kingdom this year.
“We are planning to expand our services in more GCC countries. We launched last
year in Kuwait and Bahrain and we are planning to expand our services to the UAE
and other GCC countries, and if we reached that, then we will expand more to
Cairo and Alexandria, in Egypt,” he said.
With customers at home, the company enjoyed a 1,500 percent surge in orders and
also expanded its network to include prominent partners such as Jarir, Careem,
Mrsool, Al-Nahdi pharmacy, Landmark Group, and more than 300 suppliers and
partners throughout the region.
In order to capitalize on this growth, it is also aiming to introduce new
services for businesses and launch a new e-gift service, as well as having other
projects in the works.
Kameli said social distancing and increased hygiene measures had not heavily
impacted on overall costs, but the company had witnessed a drop in revenue in
April.
“I don’t think it impacted because we are a small team and they understand the
situation and we didn’t decrease the cost but the pandemic – especially in April
– impacted the revenue side. We dropped in revenue, but we changed everything to
be realigned and to grow again, especially in May, June, and July.
“We didn’t change the operation model, but we did some optimization to be more
efficient to reach our objectives,” he added.
The company raised funding in two rounds, the first in January 2018 and the
second in June 2019, and another bid for funding is planned later this year.
On the potential of a stock market listing, Kameli said: “It is the dream of any
entrepreneur or any startup to enable people to buy and sell through their stock
and shares.”
Resal’s success can be put down to Saudi consumers’ embracing of e-commerce and
online shopping and the dominance of digital payments in the Kingdom.
Talat Zaki Hafiz, economist and secretary-general of the media and banking
awareness committee for Saudi banks, recently told Arab News that digital
payment transactions in the Kingdom jumped by 75 percent in 2020, while cash
withdrawals from ATMs and other payment points fell 30 percent over the same
period.
At the same time, the value of digital payments rose 24.1 percent last year to
around SR349 billion ($93.7 billion), as the number of payment points jumped 70
percent throughout the year.
Evidence of the growing preference for e-commerce over cash was seen during the
Black Friday sales late last year. A survey carried out by advertising platform
Criteo of 900 Saudi online consumers found that around 40 percent of respondents
said they planned to buy more products online, with household products,
groceries, and beauty and hygiene items proving most popular.
Overall, the research found that 58 percent of Saudi respondents were more
comfortable shopping online in 2020 than in-store.