Saudi Service Market 2.0

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THE Saudi economy in terms of GDP has more than double in the last 14 years mainly driven by the oil price. Thanks to the oil profits the government has invested in many public and social infrastructure supporting the creation of almost 2 million jobs and the increase of household income.

In the same context also the Saudi service industry, 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 SR 80 billion 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, 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 engagement. The survey was conducted across different age and sex profiles, different cities.

Survey Scope and Results

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

Search and identification

Among all service providers, home service providers, 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 the second and third most difficult professional category to find.

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, digital directors are the second and third most important.

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

Assessment of Service Providers

Saudi customers highly value the feedbacks 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 as well. Comparing pricing of multiple service providers in a transparent manner is key for customers. It is also evident from our survey the important the referral from family and friends and a well-documented experience and pictures and examples of past experience

Selection and hiring

When hiring the service provider, among other parameters Saudi customers are mainly looking for quality and trusted solutions. Price and responsiveness come second.

This requires service providers to adopt a proven quality management system, (including policies, processes and tools) that can ensure the delivery of the service that meets customers’ expectations, but also allows to improve the service and customer experience based on feedbacks and reviews on past projects.

Conclusions

Small and medium enterprises requires a major transformation to align their services to the Saudi customers’ expectations. Services providers require to build an online profile and display their service offering, experience especially with pictures representing their past jobs, to report feedbacks from previous customers in order to build trust, and finally have a proven quality management system which ensure 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, where customers’ can leave feedbacks on their performance. In addition to this, Serviis is planning to develop basic quality manuals for all service on its platform.— SG


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