Introduction

Saudi Arabia’s economy has reached a significant milestone, crossing the $1 trillion GDP mark for the first time in its 91-year history, ranking it as the 19th country globally to achieve this feat. The World Bank forecasts that Saudi Arabia’s GDP will grow by 4.1% in 2024, driven mainly by sectors other than oil. The Kingdom also leads venture capital fundraising in the MENA region, with Saudi startups raising $1.4 billion in 2023. This amount represents a 33% increase from the previous year, accounting for over half of the venture capital funding in the Middle East and North Africa.

Launched by Saudi Arabia in 2016, Vision 2030 is a groundbreaking strategy to transform the country’s economic landscape. This vision aims to shift the Kingdom’s focus away from its traditional oil dependence by the end of this decade. Key components of Vision 2030 include diversifying into new sectors and enhancing infrastructure, healthcare, and education.

The Kingdom’s inclusion in the BRICS group opens new economic opportunities and diversification paths. The development of the India Middle East Europe Economic Corridor (IMEC) coincides with Saudi Arabia’s efforts to expand its international trade, creating new business channels with other countries. This move is part of a broader strategy to strengthen and diversify Saudi Arabia’s economy beyond oil reliance.

Construction

Saudi Arabia’s construction industry is rapidly growing with new trends and ambitious projects. It’s now one of the fastest-growing construction markets in the world. The Saudi construction market is expected to be worth USD 70.33 billion in 2024 and is projected to increase to USD 91.36 billion by 2029. This growth, at a rate of 5.37% annually from 2024 to 2029, is driven by Riyadh’s Vision 2030. This plan aims to diversify and privatize the country’s large economy and includes significant projects like Neom Future Cities, Qiddiya Entertainment City, and the Red Sea Project.

Saudi Arabia offers the most construction opportunities in the region. This growing market is an excellent chance for foreign companies to get involved and help build Saudi Arabia’s future. One key project is The Line, a smart city initiative started in 2020 near Riyadh as part of NEOM. NEOM is in the northwestern region of Saudi Arabia and includes smart cities and towns, ports, business hubs, research centres, sports and entertainment venues, and tourist attractions. The construction market is segmented into the following sectors:

• Commercial Construction
• Industrial Construction
• Infrastructure Construction
• Energy and Utilities Construction
• Institutional Construction
• Residential Construction

Tourism

Travel, tourism, and entertainment are key sectors in Saudi Arabia’s Vision 2030. Over the past three years, Saudi Arabia has issued more than 3,500 tourism investment licenses, signalling a robust expansion in its tourism sector. Backed by government efforts to improve the business climate and ease travel, the sector is set for significant growth. Initially aiming to attract 100 million visitors by 2030, the Kingdom has now raised its target to 150 million following a surge in tourism. In the first nine months of 2023, Saudi Arabia saw record spending by foreign tourists, leading the G20 nations in tourist growth rate. Additionally, it ranks second globally as the fastest-growing tourist destination.

To support this growth, Saudi Arabia has implemented an Instant E-Visa system for travellers from 49 countries, allowing visits of up to 90 continuous days. Further bolstering the tourism industry are regulatory changes, including the new “Visiting Investor” visa. Vision 2030 is at the forefront of enhancing the tourism and leisure sectors by creating world-class attractions, streamlining visa processes, and developing historical and heritage sites.

The upcoming World Expo 2030 in Riyadh is anticipated to boost tourism significantly. Besides this, Saudi Arabia is set to host several major global events. These include the Federation for Equestrian Sports World Cup Finals in 2024, the 2025 Asian Indoor & Martial Arts Games, the Asian Football Confederation’s Asian Cup in 2027, the Asian Summer Games in 2034, and the 2034 FIFA World Cup. These events position Saudi Arabia as a key global tourism destination.

Information and Communication Technologies (ICT)

With a value exceeding $40.9 billion and contributing 4.1 percent to the Kingdom’s GDP, Saudi Arabia’s Information and Communications Technology (ICT) market stands as the most substantial and rapidly growing in the Middle East and North Africa. The Kingdom is strategically poised to evolve into a central hub for technology services and cloud computing. Its geographical location, with access to the Red Sea and the Gulf, positions it ideally to cater to European, Asian, and African markets.

In line with Vision 2030, the Ministry of Communications and Information Technology (MCIT) aims to develop a state-of-the-art digital infrastructure. The goal is to facilitate digital transformation across various domains, such as e-commerce, digital education, digital health, smart cities, national data management, and e-government. The 2023 ICT Strategy of Saudi Arabia plans to create over 25,000 jobs in the ICT field, enhance the IT market and emerging technologies by 50 percent, and increase the sector’s GDP contribution by $13.3 billion. The strategy also focuses on attracting foreign investment and promoting women’s involvement in the sector.

The Economic Cities and Special Zones Authority has also initiated a Cloud Computing Special Economic Zone. Unique in the region, this zone allows cloud service providers to establish data centres across Saudi Arabia and deliver various cloud computing services. This move marks a significant advancement in Saudi Arabia’s journey to become a global leader in the ICT sector.

The leading sub-sectors are:

• Cybersecurity
• Internet of Things (IoT) & Smart Cities
• Cloud Computing
• Artificial Intelligence
• 5 G
• E-Commerce

Sports

Saudi Arabia is increasingly becoming a hub for major sporting events, reflecting its citizens’ growing interest in sports. The Kingdom has successfully hosted several notable events, such as high-profile boxing matches, ATP tennis tournaments, and Formula 1 races, starting in 2021. The momentum is set to continue with an exciting lineup of future events. These include the Asian Indoor and Martial Arts Games in 2025, the AFC Asian Cup in 2027, the Asian Winter Games in 2029, the Asian Games in 2034, and the highly anticipated FIFA World Cup also in 2034.

The commercial landscape of Saudi Arabia’s sports sector is on a trajectory for rapid growth, particularly with the upcoming FIFA World Cup in 2034. This growth is not just in anticipation of future events but also through strategic investments. Notably, the Kingdom’s football industry has been a focus, with the Public Investment Fund acquiring substantial stakes in four major football clubs. By 2030, the sports sector in Saudi Arabia is expected to expand by 5 to 7 times, fueled by these investments and the considerable untapped commercial potential in the market.

Some of the business opportunities are:

• Sports academies and coaching centres
• Sports event management
• Fitness centers and gyms
• Sports retail stores

Food and Beverage

Saudi Arabia is witnessing a surge in demand for high-quality food and beverage options, driven by its diverse population and booming tourism sector. The country is poised for significant investments in its food industry, with a target of $20 billion by 2035. This influx of funds is expected to predominantly benefit sectors like poultry, dairy, bakery, sweets, beverages, and juices. The Saudi Arabia Food and beverage Market, valued at USD 23.48 billion in 2024, is anticipated to grow to USD 27.83 billion by 2029, with a compound annual growth rate (CAGR) of 3.44% during this period.

This remarkable growth in the food and beverage market can be attributed to the thriving food and dairy industry and the increased consumption of products like milk and dairy items. Companies are responding to the demand for healthier options by offering organic, locally sourced, and halal-certified products. This shift aligns with the government’s initiatives to promote healthy eating habits among its citizens.

Another significant trend is the rising popularity of international cuisine in Saudi Arabia. The diverse population and growing tourist numbers have increased demand for various international foods, ranging from Asian to Mediterranean to American cuisine. Consequently, there has been a noticeable increase in international restaurants and food chains across the country.

The market’s scope covers various product types and distribution channels. It includes sectors such as dairy & dairy alternatives, confectionery, beverages, bakery, snacks, meat, poultry, seafood & meat substitutes, breakfast cereals, and ready meals. The dairy segment is divided into dairy products and alternatives; confectionery comprises chocolate, sugar confectionery, and snack bars like cereal bars and protein/energy bars. The beverage category is split between alcoholic and non-alcoholic drinks. Bakery encompasses cakes, pastries, biscuits, bread, morning goods, and frozen baked products.

Start Your Profitable Business in Saudi Arabia with Al Taasis

Begin your successful business venture in Saudi Arabia with the guidance and support of Al Taasis. In a country with a rapidly evolving economy and vast opportunities in various sectors, including the booming food and beverage industry and the expanding tech and construction markets, Al Taasis offers the expertise and resources needed for success. We provide comprehensive insights and customized strategies tailored to the unique landscape of the Saudi market. Whether your interest lies in capitalizing on the growing tourism sector or exploring the lucrative possibilities in food services or technology, Al Taasis is your ideal partner, ready to turn your business aspirations into a profitable reality in the dynamic Saudi Arabian market.

Contact us to know more about the prerequisites of your business journey.