Saudi Service Market 2.0 – Digital Transformation

The Saudi economy in terms of GDP has more than double in the last 14 years mainly driven by the oil price. The oil price boom from 2003 to 2013 fueled rising prosperity in Saudi Arabia, which became the world’s 19th-largest economy. GDP doubled, household income rose by 75 percent, and 1.7 million jobs were created, including jobs for a growing number of Saudi women. The government invested heavily in education, health, and infrastructure and built up reserves amounting to almost 100 percent of GDP in 2014.

In the same context the service industry, including home services, training, education, and professional services has increased amounting to about SAR 80 bn in 2015. However, the service supply market, especially the small and medium enterprises and freelancers, has not evolved and is still suffering for limited quality, limited level of digitization, lack of pricing transparency, limited financial capacity, and weak customer service.

Serviis has recently conducted a survey in Saudi Arabia addressing the supplier engagement process from the search to the actual hiring of the service provider. The survey was conducted across different age and sex profiles, and different cities.

Figure 1 – Survey demographics

F1

Survey Scope and Results

The selection of a service provider goes through three main steps, which were all assessed through our survey.

Figure 2 – Search, assessment and selection process

F2

Search and identification

Among all service providers, those belonging to the home services category, including plumbers, painters, electricians, carpenters, air conditioning maintenance providers, landscaping seem to be the most difficult to find in Saudi Arabia. Tutors and business service providers are respectively the second and third most difficult professional category to find.

Figure 3 – Most difficult professionals to identify in Saudi Arabia

F3

Typically, home services providers do not have a digital presence (e.g., a webpage, a Facebook page, or similar). Few of them are registered on digital directories, however in most of the cases their data are not update.

Saudi customers still do not fully trust digital tools to look for service providers. Referral from friends and relatives is still the main source to search for service providers. However, Google search and digital directories are respectively being the second and third most important sources of information.

Figure 4 – Key tools to search for service providers

F4

Saudi customers face multiple challenges when searching for a service provider. It is mainly a time consuming process, and there is a general lack of transparency on price, capabilities and service quality. There is also a lack of service providers’ profile on digital channels, where all those information on price, quality and capabilities are reported.

Figure 5 – Major issues when looking for a service providerF5

Assessment of Service Providers

Saudi customers highly value the feedback and reviews from other customers. This requires service providers to ask for reviews to their customers and make sure those are reported on an independent platform (e.g., similar to trip-advisor on travel topics). Affordable price is a key element of the decision making process. Comparing pricing of multiple service providers in a transparent manner is key for customers. It is also evident from our survey the importance of the referral from family and friends, and well-documented service provider’s expertise, and pictures and examples of jobs already completed.

Figure 6 – Key parameters for the selection of service provider

F6

Selection and hiring

When hiring the service provider, among other parameters Saudi customers are mainly looking for quality and trusted solutions. This requires service providers to adopt a proven quality management system, (including policies, processes and tools) that can ensure the delivery of the service meets customer’s expectations, but also allows to improve the service offering and customer experience based on feedback and reviews on past projects.

Price and responsiveness come second.

Figure 7 – Key parameters considered when hiring a service provider

F7

Conclusions

Small and medium enterprises require a major transformation to align their service offering to the Saudi customers’ expectations. Service providers should build an online profile and display their service offering, experience especially with pictures representing their previous jobs, to report feedback from previous customers in order to build trust, and finally have a proven quality management system which ensures the proper delivery of the service.

Serviis.com has been established in 2016 to support the transformation of the Saudi service market by providing to its network of service providers a digital platform where to display their service offering and where customers can leave feedback on their performance. In addition to this, Serviis is planning to develop basic quality manuals for all services on its platform

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