Businesses in Saudi Arabia are showing signs of recovery, with some big winners

Businesses in Saudi Arabia are showing signs of recovery, with some big winners

By Khalid Suleimani and Loulwa Bakr, senior partners at Chrome Advisory 

Some of the most optimistic people did not expect to see the rapid recovery of startups and small and medium enterprises (SME) in Saudi Arabia, following both the lockdown due to the Covid-19 pandemic and the increase of VAT. In addition, few expected to see the dynamic transformation of business models across many of the startups and SMEs, along with the overall growth of some within this sector. The notable and rapid intervention of the Saudi government, and the introduction of various initiatives to support these companies are to be credited for this recovery.

Within the retail sector specifically, micro enterprises in Saudi Arabia faced many challenges, as a result of the imposed curfews and lockdown across all cities in the country on 23 March 2020, followed by the partial closures on 26 April, to contain the spread of the virus. As was the case across the globe, these decisions led to a great many challenges affecting retailers, these included:

Paying salaries became a major challenge, tied to the halt in sales. With the abrupt closure of stores and the subsequent halt of sales, significant pressure on the cash flow of micro SMEs was recorded.