How to Start a Business in Saudi Arabia and Navigate the Market

Saudi Arabia has a growing IT market for those looking to expand their horizons, scale a business, or start a project aimed at the needs of the country’s residents. The prospects of the market are alluring, with a variety of opportunities and quick growth. And so, Saudi marketing has its own specifics.

In this article, I will highlight the following points:

1. Saudi Arabia market overview
2. Competitive analysis
3. Process of choosing the right marketing channels and strategy for each of them
4. Marketing funnel
5. KPIs measuring
6. Monetization strategy

My goal is to help you figure out Saudi marketing and learn about starting a business in Saudi Arabia. Let’s get started!

Saudi Arabia Market Business Landscape

Saudi Arabia has a vast market that endorses the digital revolution and creates beneficial conditions for starting a business. Its strategic location and thriving economy make Saudi Arabia a focus for business owners. Now, Saudi Arabia’s staggering GDP growth is projected to reach 38,124 USD per capita by 2029.

The country’s IT segment has been accelerating at a 9% rate annually since 2019 and is moderately fragmented, which fosters lower competition. The niche is focused on digital infrastructure, and the government launched the Vision 2030 initiative to support digital innovations. The country’s central location also enables business owners to gain access to the MENA region and target over 400M consumers.

Hence, the market conditions in Saudi Arabia are inviting for new startups.

Vision 2030: Transforming the Business Environment in Saudi Arabia

The country launched a Vision 2030 program, a governmental initiative that invests in digital infrastructure and provides incentives for foreign tech companies. This governmental program enables innovation and digital transformation in the region.

Vision 2030 support programs are aimed at digitalization projects in different sectors. The programs include but are not limited to:

1. Health sector transformation program.
2. Housing program.
3. Financial sector development program.
4. Public investment and fund program.
5. National industrial development and logistics program.

For each program, Vision 2030 has strategic goals that are achievable only with business owners and startup engagement. Let’s review the financial sector development program in the Saudi market as an example.

Among the strategic objectives for the financial sector development program in Vision 2030 are the following:

• Form the advanced capital market.
• Support private sector growth with the help of financial institutions.
• Enable financial planning and promote it.
• Create a fintech development strategy.

Vision 2030 invites foreigners to help expand Saudi Arabia’s digital infrastructure and enable the achievement of strategic goals for each of the abovementioned markets. The initiative offers tax breaks, simplified processes, and generally less bureaucracy. This creates an easier entry for business owners and enables a more cost-effective market entrance.

Key Demographics and Consumer Behavior in Saudi Marketing

The country’s total population is 37.2 million, and more than 94.3% of the population uses social media in the Saudi market. There might be several reasons for this, including but not limited to:

1. Mobile-first. Saudi Arabian users will choose a mobile app over a desktop one. Thus, in October 2024, mobile traffic composed over 78.5% of all traffic generated by users, while desktop users only made up 20.6% of all internet surfers. Therefore, Saudi marketing is more mobile-first-oriented.
2. Online-leaning shopping. According to Statista, Saudi Arabian citizens are more inclined to shop online than offline. Most funds in the country are spent online on electronics, with fashion and media coming close second.
3. High disposable income. As a fast-growing country, Saudi Arabia has a high level of disposable income among locals, which influences their spending habits and consumer behavior. For example, in 2024, the average household income reached USD 13.86K per capita and will grow to 18.04 per capita by 2029.
4. Urbanization. Over 85% of the country’s population are urban citizens, which likely drives them to use digital products such as ride-sharing applications, delivery services, moving services, and other useful apps in busy settings.
5. Youthfulness. Saudi Arabia’s median age is around 30, which makes it a young nation. This might indicate a general public interest in digital products and services, including social media apps, and create better social media penetration for audiences in the age median of 24-34.

In my opinion, these are the highest identifiers in consumer behavior in Saudi Arabia for 2024. However, the country’s population is diverse, and you will have to access your TA manually via research and data analysis.

Regulatory and Legal Considerations in Saudi Arabia

Saudi Arabian regulations are different from those in the EU or the UK. If you want to launch a business in this region, it is crucial to understand the legal considerations to adhere to.

So, these are the critical regulatory bodies to consider under the legal aspects of the business launch in the industry are the following:

1. Saudi Central Bank (SAMA). SAMA supervises the financial and banking sectors and creates a controlled environment for companies to test their products.
2. Communications and Information Technology Commission (CITC). CITC ensures cybersecurity and data protection for telecommunications and IT.
3. Capital Market Authority (CMA). CMA ensures the compliance of crowdfunding and investing platforms with security guidelines.
4. National Cybersecurity Authority (NCA). NCA protects user and financial sensitive information by establishing cybersecurity frameworks.

Other factors to consider include regulatory bodies and institutions, such as legal frameworks that include Sharia Law and PDPL.

If you’re interested in this topic, the DashDevs article provides a more comprehensive overview, which will give you an idea of the legal framework and general software development process.

Now, let’s proceed to the discussion of the complex process of product launch in Saudi Arabia. In the next section, I will highlight the most important aspects of Saudi marketing and project launch.

How and Why Launch a Product in Saudi Arabia

Considering everything that has been said before, it’s easy to conclude that the industry’s market conditions are more than welcoming. But what makes Saudi marketing conditions so different from the rest of the world that they are turned into a focal point of the digital landscape? Let’s find out.

1. Vision 2030. As I mentioned before, this governmental program enables innovation and digital transformation in the region.
2. Investment opportunities. The Public Investment Fund is one of the largest sovereign wealth funds that also pursues the goal of achieving Vision 2030. Now, the fund has over 13 sectors and over USD 925bn assets in management.
3. Favorable incentives. Vision 2030 enables tech business initiatives to achieve better tax conditions, such as tax breaks and exclusive access to government contracts. Due to these opportunities, foreign companies such as Siemens and PepsiCo have already placed their RHQ in the country.

To achieve the most from the promotion, you should take a careful, calculated step in researching which brand discovery sources would fit your business. So, without further ado, let’s take a look at the stages of product marketing in the KSA region.

If you are excited to build a product that will capture the audience’s attention, take great care of customer centricity. Read some materials about best practices for customer centricity to research more.

#1 Conducting a Competitive Analysis

To effectively navigate the Saudi Arabian market, a comprehensive understanding of its competitive landscape and digital trends is crucial.

1. Identify your competitors. The first step is to identify your business’s key competitors in the target industry you chose. First, look for companies offering the same services or products; they are your direct competitors. Then, you can research businesses offering alternative solutions to your services and evaluate the impact they might have on your business. Access their strengths and weaknesses compared to your business, and look for your unique competitive edge.
2. Understand the local market dynamics. Understand local customs, traditions, and religious sensitivities to tailor your marketing and product offerings. Utilize the market overview I provided before, and search for your own data connected to the chosen industry. For example, pay attention to the audience’s age or income level.
3. Conduct advertising market analysis. Evaluate the effectiveness of various digital advertising channels, including social media, search engine marketing, and display advertising. Professional help might also be beneficial in this step, so you can consult advertising agencies or marketing companies for aid.

Overall, these are the steps you need to take for initial competitive and market research. But in the bigger picture, this research is a part of a strategy. The next step is to determine the marketing channels.

#2 Choosing the Right Marketing Channels

A multi-channel approach is the key to Saudi marketing, as it has a diverse audience and fast growth. When defining your channel mix for the Saudi market, I recommend asking yourself the following questions:

• Who are your ideal customers?
• What are their interests, values, and lifestyle preferences?
• How do they consume content? Which social media platforms do they use?

According to the graph you see below, search engines are Saudi Arabia’s main advertising channel, with nearly 40% of marketing expenses going through them. Furthermore, by 2029, search advertising is expected to grow from $856.5 million to $1.5 billion. Therefore, search is your biggest priority for your future go-to marketing strategy. This is w

Other channels, such as TV ads, brand websites, celebrity endorsements, and so forth, can be great supplementary efforts.

Second, as one of the most efficient places for web discovery comes social media. According to Kepios, it is being used by almost everyone in the country, with a 20.6% growth between 2023 and 2024 (6 million active users). So, let’s take a look at the most popular social media platforms for Saudi marketing.

Top 3 Social Media Platforms in Saudi Arabia

First on the list is TikTok, which has 35.10 million users aged 18 and above. According to ByteDance’s report, the reach of advertising on this platform increased by 33% between 2023 and 2024. It’s important to note that this data only concerns users aged 18 and above and might be different from the overall app landscape.

A close second in Saudi Arabia is YouTube, with 28.30 million users. If you publish an ad on YouTube, over 76% of the Saudi Arabian population may see it. The statistics only show a portion of registered users without taking into account active watchers and other variables. This, however, still makes YouTube an attractive promotional channel and creates additional benefits of cooperation with the influencers.

Third but not the last is Instagram, closing in on 16.30 million users. The reach compared to the total population of the country is 43.8%, and what’s interesting is that on Instagram in Saudi Arabia, the audience is predominantly male.

#3 Preparing a Strategy for Each Channel and Channel Ecosystem

A well-executed multi-channel marketing strategy is essential for effectively reaching your target audience. By utilizing multiple channels, you can create a cohesive brand experience and maximize your marketing impact.

1. Goal definition. For each channel, focus on the specific goals you want to achieve and how to achieve them. For example, if you’re making a corporate Instagram, focus on upscaling brand visibility through reels and stories. For your website, focus on SEO-optimized content and blog posts to increase the brand’s authority.
2. Create a brand image. Use consistent messaging across all channels. Based on your TA needs, create your own messaging and build brand awareness with persistent ToV, constant content updates, and strict adherence to social media guidelines.
3. Define the KPIs. Track relevant metrics, such as website traffic, social media engagement, and conversion rates. For this, you can use tools such as Google Analytics and Google Search Console, and based on your research and data acquired, you can try new approaches or experiments.

UI can capture your audience’s attention and make them stay on the page. DashDevs has worked with complex web and mobile applications before, wrapping them into the most user-friendly interface.

#4 Preparing Marketing Funnel

When you’re just starting your marketing efforts in Saudi Arabia, I would recommend allocating 60% of your budget to brand awareness campaigns to build long-term brand equity. Then, you can allocate 40% to conversion campaigns to focus on brand image and build a reputation. Thus, you would prioritize brand awareness to establish brand recognition and build a customer base.

This will help you start the marketing funnel with a strong foundation for awareness. By following the marketing funnel levels, you could potentially expand your presence and enhance your brand reputation.

In the graph below, you can see a visual representation of the marketing funnel with the steps and tips for what you can use to achieve every step’s goal.

#5 Setting KPIs and Measuring Success

I’ve mentioned KPIs before, so now it’s time to take a closer look at them. The indicators are crucial for measuring the success of your online marketing efforts. In this section, I will overview some of them and give you tips on how to set and achieve them.

Social media engagement.

In social media, the way people interact with your content becomes the most visible highlight of its efficiency. So, as an indicator of your SMM efforts’ success, you can track the impressions, reposts, and likes on your social media posts.

Website traffic.

Traffic for your website can be generated in a few different ways. Among the efforts can be link-building campaigns, SEO efforts, and paid campaigns. Therefore, the traffic will be split into paid and organic, with the latter only counting visitors that organically found your site on the web and the former indicating users that came from paid ads. Setting KPIs for website traffic will help you measure the number of organic visitors, as well as bounce rate and time on the site, to see the general public response to your marketing efforts.

Lead generation and conversion.

Lead generation corresponds to the factual amount of leads your marketing generates. In certain cases, this metric can show that your efforts are inefficient, for example, if the cost of acquiring new leads is higher than the profits generated. Under this KPI, you can also successfully track the quality of leads. Therefore, the amount of users interested in your services does not translate into high conversion – the percentage of website visitors who complete a desired action (e.g., purchase or sign-up).

To achieve the best results in KPI tracking and analytics, you might want to use the following tools to monitor business performance and optimize campaigns. Among them can be:

• Built-in social media analytics.
• Google Analytics and Google Search Console.
• Marketing automation tools such as HubSpot.
• CRM software like Salesforce.
• Customer Looker Reports.

#6 Choosing Monetization Strategy

The last thing worth mentioning, but certainly not the least important, is a monetization strategy. Of all the different approaches and forms monetization can take, not all of them would be suitable for the Saudi Arabian market.

It’s more than just making your products budget-friendly; it’s about understanding the landscape and creating something that is most comfortable for the audience. Here are some of the ideas you might consider:

1. In-app advertising. The high percentage of internet users might help you utilize an in-app advertising model without compromising on profits, yet still making your product cost-effective and affordable for a large audience.
2. In-app purchasing. High GDP makes it more likely that the services or products will be purchased within the app immediately if they capture users’ attention. You might benefit from this monetization strategy from fees associated with the transaction or directly.
3. Subscription model. As they are exposed to new products and services, the market audience is likely to be interested in an affordable subscription that fits their needs or requirements.

Overall, it’s important to consider what your product offers to the audience. In-app advertising wouldn’t work well for a premium fintech solution but would be suitable for an e-learning platform or lifestyle application. With this being said, you should consider cooperating with a development agency that has experience implementing products for the KSA region and MENA.

Wrapping Up

To sum it all up, I must conclude that Saudi marketing is, in its way, extremely unique. It urges business owners to utilize the devices they don’t focus on, engage in mobile-first development, and find a way to make their project memorable enough for people to talk about it. This region can be both rewarding and unforgiving.

However, if you work with a great development partner, you stand a real chance of achieving success. Companies such as DashDevs, which have experience working with multiple projects for different countries, can help you navigate the new world of complex regulations. We have created over 500 products in 14 years and will gladly take on another challenge.

Contact us!