Majed Al-Tahan saw a gap in the market for online shopping
DUBAI: Saudi Arabia is on the verge of a consumer revolution and Majed Al-Tahan is in the vanguard of that transformation.
The founder and CEO of AYM Commerce, the e-commerce arm of the Danube supermarkets chain, is aiming to change the way Saudis shop, and in the process help to contribute to the momentous economic changes underway in the Kingdom.
As a budding architect in London, Al-Tahan got used to online shopping, and realized that the retail market back home had no equivalent.
“I realized there was a gap in the market for online home delivery of fresh food and groceries when I lived in London as a student and used Ocado a lot,” he said. “When I got back to the Middle East I saw there was nobody really doing it in the region. I also saw the big Saudi market, which had a number of challenges.”
So he gave up his aspirations to be an architect, and began talking to the Bindawood retail giant, which owns the 58-store strong Danube chain.
Since then he has barely had time to look back.
Despite the slowdown in the overall economy as a result of lower oil prices and some government-imposed “austerity” measures, retailing is still expected to be a growth sector.
The image of the typical Saudi shopper — all designer brands, consumer electronics and luxury items — hides a reality where essentials such as food, groceries and everyday household products remain a fast-growing sector.
Al-Tahan is well aware of this trend, and last year he launched the AYM app, which enables consumers to shop using their mobile phones. It is one of the most downloaded apps in the Kingdom, with 750,000 users and a target of one million by the end of the year.
“There was a sudden leap just recently in the downloads which we think coincided with the return to school,” he said. “Now we are the No. 1 app for food and drink, and the most downloaded outside the big social media giants like Facebook and Instagram.”
He reeled off the names of the global online giants he seeks to emulate.
“AYM is looking to be for Saudi what Ocado is for the UK, or Big Basket is for India, or Red Mart is in the US,” he said. “We are the biggest online grocery company in the Middle East. There are a few smaller players but we are the biggest.”
He linked up with Danube courtesy of contacts at Bindawood, which has owned Danube since 2001.
“I’m so grateful to the Bindawood group for the opportunity to do their e-commerce platform,” he said. “I approached them and they trusted somebody so young to lead them from the old-fashioned bricks and mortar into e-commerce.”
The heritage goes back a long way, however. Bindawood opened the first supermarket in Makkah, and has since spread to dominate the western region with a significant presence in the rest of the country. in the Kingdom. We are working closely with the ministry, and we are a platinum member of the corporates who have signed up to support the economic transformation program, the highest tier of the ratings,” Al-Tahan said.
In the more mundane but essential aspect of fulfilment, all the picking and packing is done via Danube stores throughout the Kingdom.
But the executive offices are in Dubai, where Al-Tahan said it was easier to hire senior staff, and from where executives make the weekly commute to Saudi Arabia. There are plans, too, to roll out the app in the UAE, the second-biggest retailing market in the Arabian Gulf.
One crucial ally in the development of AYM is the Irish e-commerce entrepreneur Paul Kenny, who founded and launched the online vouchers business Cobone and then expanded into online travel.
Kenny eventually sold Cobone to American investment firm Tiger Global, which was also a crucial player in the sale of Souq. com to Amazon for $650 million, the biggest e-commerce deal yet to hit the Middle East.
The involvement of such big hitters underlines the fact that the e-commerce space is getting