An interview with Bagedo IB founder and chairman Hani Bagedo
Over the past few years, we’ve seen a number of countries competing to become the world’s number one offshore outsourcing location. For decades, India was seen as the best candidate, boasting low costs, a growing economy and a large population with an increasing number of skilled workers.
Locations such as the Philippines and South Africa have also been favoured – not as effective perhaps on the cost front, but more appealing than India in terms of quality infrastructure. More recently, Mexico has been touted by some as the next big outsourcing market for information technology. The country is only a short flight away from the US, shares similar time zones and sports a large number of ICT professionals.
But what about Saudi Arabia? It’s hardly a high profile information technology outsourcing (ITO) location, yet Hani Bagedo, founder of e-commerce and software solutions company Bagedo IB, is adamant that Saudi Arabia is a unique and extremely viable location for companies looking to outsource their IT capabilities.
Sourcingfocus interviewed Bagedo to find out if Saudi Arabia could become the next big ITO market.
To what do you attribute the success of Saudi Arabia’s information technology market?
The globalization of the technology market has a strong effect on a country’s digital market. In Saudi Arabia specifically, the country has become more open to the world market, and the computer technology sector is the fastest growing channel because of its constant connection to the world.
The number of Saudis receiving a bachelor's degree or higher education has increased dramatically, especially after King Abdullah's scholarship program, which sends more than 400,000 Saudis to continue their higher education at the best universities around the world every year.
Consequently, Saudis are becoming more open to all the different cultures and markets around the world, and they bring a lot of experience and strong practices for enhancing e-marketing in the Saudi economy.
Moreover, a lot of international ecommerce companies know of the Saudi purchasing power and the importance of the Saudi Arabian market in the Gulf Cooperation Council (GCC). As a result, they have started targeting this market and expending resources to gain a better understanding of the market. This has caused it to expand and its influence has shaped Saudi consumers' minds and brought them into a new digital age.
How has Bagedo IB benefited from Saudi Arabia’s up-and-coming IT market?
IB recognized that, as per the most recent research, about 15.6 million people in Saudi Arabia use the internet. Roughly 3.9 million of the total population make online transactions, primarily ages 25 to 54. Moreover, the e-commerce growth rate increased by 34 per cent from 2013 to 2014. Research says that approximately 36 per cent of the people in Saudi Arabia now shop online.
Most online activities in terms of digital marketing were focused on Instagram or Pinterest, where people didn’t experience many issues. Bagedo IB noticed the gap in the Local SMEs and the online market, and is trying to provide emerging businesses with the whole e-commerce experience while retaining their identity. Bagedo IB provides them with the appropriate tools that can enhance their business at a competitive price while maintaining the international standards.
Given the proficiency of the country’s IT market, is Saudi Arabia likely to become an important hub for IT outsourcing in the near future?
The Saudi Arabia market is very important because it’s the largest and the most powerful country in MENA (Middle East and North Africa) in all sectors. The economy here is also very fertile and filled with strong opportunities for opening up new businesses, because the GPI per capita is 26,200 US dollars. Saudi Arabia is ranked among the top 50 countries for doing business.
Because of the strict regulations in the country and few entertainment sources, everything related to IT and internet is considered a means of entertainment for people of all ages. Moreover, technology has entered the government education system so all schools now depend on computers and the internet.
Compared to the other GCC countries, Saudi Arabia has the highest population. The opportunity to open a business here is huge and advantageous, as it is one of the richest multinational countries in the world, because of all the people from different countries living here. This wide diversity of cultures here has created a large and unique community.
What do clients need to consider before outsourcing to third parties in Saudi Arabia?
Any international company looking to enter the Saudi market must first consider which local company to partner with because of the complex culture and regulations.
These companies need to outsource their activities to local companies that can mold their strategies accordingly to the local consumer’s mind. We believe that is our competitive advantage; we provide professional services with the necessary local orientation and do the same when choosing our partner. That’s why we choose partners who know their local market.
Where does Bagedo IB stand on outsourcing?
Bagedo IB is a local company, but we outsource to partners who are taking our name and expanding around the world. Bagedo IB is focusing on launches in Oman, Kuwait, UK, USA and more. Our aim is to turn local small boutique brands into international brands help and various others.
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