Abdo Chlala, Country Manager at Amazon Saudi Arabia, offers insights into Prime Day, innovations, e-commerce trends, and more
Prime Day is an annual shopping event exclusively for Amazon Prime members, offering incredible deals and savings across a wide range of products. This year, Prime Day is taking place from July 16 to 21 on amazon.sa in Saudi Arabia.
Innovation
Since launching Prime in the UAE, followed by Saudi Arabia and Egypt, we have leveraged over 25 years of global innovations and operational expertise to ensure fast and free deliveries for our Prime members. Our associates work in symphony with our cutting-edge backend technology to enable fast and reliable deliveries.
It starts in our Fulfillment Centers, where we deploy advanced systems to efficiently manage inventory and operations as we pick, pack and ship millions of packages every day. At ‘delivery stations’ – the last leg in the journey of a package to the customer’s doorstep, technology is embedded into every aspect of the process. AI and complex algorithms map the entire route of a package from the moment it enters the delivery station until it reaches the customer.
We continue to strengthen our last-mile operations in Saudi Arabia and across the region to accelerate delivery times. In the Kingdom, our delivery network now consists of over 25 owned and partner delivery stations, including many small and medium businesses, to get packages into the hands of Amazon customers. By growing and scaling our transportation network, we have built the capacity and flexibility to continue delighting customers as we meet rapidly growing demand. From fulfillment centers to the last mile, it’s the combination of advanced technology and incredible people that enables Amazon to deliver on its Prime promise.
Delivery
At Amazon, our customer obsession drives us to continually raise the bar of customer experience. This unwavering focus pushes us to ensure that we deliver with speed, convenience and reliability, even during our busiest shopping events like Prime Day. In 2023, this approach enabled us to deliver to Prime members at the fastest speeds ever globally, with more than seven billion units arriving the same or next day. We have spent over two decades building and investing in an operations and transportation network that is nimble and prepared to handle major shopping events.
Knowing that speed of delivery is one of the most important considerations for customers in Saudi Arabia, we have optimized processes and enhanced efficiencies to ensure that customers can enjoy same-day delivery on eligible items.
For this year’s Prime Day event in Saudi Arabia, we are more prepared than ever to reach more customers with shorter delivery times and a wider product selection. We achieve this by ordering items in advance and positioning them close to customers in our fulfillment centers. We have invested in state-of-the-art technology to meet demand, improve efficiency and enhance employee safety and experience. We also strategically place delivery stations near large customer populations to reduce delivery times, while leveraging innovative technology to optimize delivery routes and maximize efficiency on the road.
We continue to invest in expanding our footprint across the Kingdom to better serve customers. In the past year, we opened a new fulfillment center in Riyadh that doubled our total storage capacity in the country, enabling us to offer a wider product selection. Today, Amazon’s operations network in the Kingdom comprises two fulfillment centers, three sort centers and over 25 owned and third-party delivery stations.
Trends
Globally, e-commerce is expected to capture 41% of retail sales by 2027, up from just 18% in 2017, according to Boston Consulting Group. Saudi Arabia and the UAE remain the largest and fastest-growing e-commerce markets in the region, with the number of people shopping online weekly doubling in the past two years as reported by McKinsey & Company. They also reported that in Saudi Arabia, e-commerce is projected to account for over 25% of retail sales by 2035, compared to 10% currently.
Several factors point to continued e-commerce growth in the region – economic diversification, improving logistics, accelerating technology and the rising number of mobile users, especially given that 55% of the MENA population is under the age 30, according to the OECD. Customers are still spending and shopping meaningfully, but they are becoming more price conscious. Fundamentally, what was true when Amazon was founded remains true today – customers want vast selection, low prices and fast delivery. It’s why we continue innovating across these pillars.
At Amazon, we adopt a ‘customer backwards’ approach, which begins with defining the ideal customer experience and then iteratively working backwards to determine what we need to build to achieve it. This customer-centric mindset, combined with the promising potential of the e-commerce sector, shapes how we innovate and invest in our logistics and delivery operations.
Impact
Prime Day not only delights customers with incredible deals, but also has a significant positive impact on the retail landscape in Saudi Arabia, particularly for small and medium-sized businesses (SMBs). Supporting sellers of all sizes is a fundamental part of our work and customer-centric culture at Amazon, and we remain committed to enabling them to thrive and successfully grow their businesses in support of Saudi Arabia’s digital economy.
Globally, more than 60% of Amazon’s sales come from independent sellers, most of which are SMBs. Prime Day plays a key role in supporting these sellers by helping them boost sales. In fact, Prime Day 2023 was the biggest Prime Day event ever for independent sellers worldwide, with their sales growth in Amazon’s store outpacing Amazon’s retail business.
In Saudi Arabia, the majority of products sold on amazon.sa come from independent sellers, most of which are SMBs. By selling on Amazon, they gain access not only to our customer base, but also our world-class operations and logistics expertise. For many SMBs in the region, Amazon provided a simple and convenient way to venture into e-commerce for the first time.
To set sellers up for success on Prime Day, we proactively provide recommendations for deals that have the highest likelihood of delighting customers and performing well. Throughout the event, we also drive discoverability of small businesses and independent sellers by spotlighting their incredible deals. All of this is made possible by Amazon’s significant investments in marketing, merchandising, and operational infrastructure. The end result is an experience customers love and a boost in sales that small businesses appreciate.
Our Fulfillment by Amazon (FBA) model is particularly empowering for entrepreneurs as it allows SMBs to leverage our state-of-the-art fulfillment network to store, pack and ship customer orders, enabling them to reach their customers online. Our global logistics technology and expertise also enables sellers to offer their customers one-day and same-day delivery across the Kingdom, something that would be extremely difficult for SMBs to achieve on their own.
As for delivery, we partner with small and medium companies to deliver thousands of packages every day. As our delivery partners, they gain access to our infrastructure, technology and training, which ultimately allows them to scale their own businesses.
AI
We believe that generative AI capabilities are going to transform virtually every customer experience. At Amazon, we have been using AI and machine learning for over 20 years – it is integrated into everything we do and we are currently one of the largest users of AI globally. We develop AI for one primary reason: to improve the shopping experience for every customer. That’s why we’re investing heavily in it and the responsible development and deployment of large language models across all of our businesses. Every one of our teams is working on building generative AI applications for both customer-facing services and internal operations.
Amazon has one of the most complex operations in the history of commerce. We pick, pack, ship and deliver millions of packages in over 20 countries every day, and we are constantly striving to get faster and more affordable. This wouldn’t be possible without some of the world’s most advanced AI systems.
AI also plays a crucial role in our last-mile delivery operations, tackling the fundamentally difficult problem of route optimization. In countries like Saudi Arabia, where street addresses don’t always follow a standardized format, generative AI helps us derive precise map locations from non-standard addresses, making it easier and faster for drivers to find specific locations. Machine learning is also used to better understand driver transit times and create a more pleasant work experience for our delivery teams. Another area where AI is making an impact for us is in localizing global templates for customers shopping on amazon.sa and amazon.ae. AI plays a key role, especially since the Arabic language can be complex with varying dialects across the MENA region.
Ultimately, while many of our AI systems operate behind the scenes, they are all in service of delivering great customer experiences.
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