AHMAD AR. BINDAWOOD

Saudi Arabia 2021 | AGRICULTURE | VIP INTERVIEW

TBY talks to Ahmad AR. BinDawood, CEO of BinDawood Holding, on the challenges of COVID-19 and the introduction of VAT, as well as the strong results the firm is posting as it continues to offer the best shopping experience.

How did BinDawood Holding manage changing consumption patterns, and how did this lead to its impressive performance in the first nine months of 2020?

2020 was definitely not an easy year and was challenging by all standards. Normally, when we enter a year we have a preset plan and strategy that takes into consideration expected consumption, and there are festivals, holidays, and plans. However, when COVID-19 hit there was uncertainty around many aspects of life, whether it was meetings that need to be conducted with suppliers, plans to follow through on, or shopping patterns. Challenges came simultanously, and we needed to manage and be flexible so that we could keep working and performing. We had plans to go public, for example, but we had to adjust timelines to prioritize immediate busines requirements. We managed to reassure our customers successfully to avoid panic buying, and there was also a great deal of coordination from the government to ensure there was adequate supply in the market. We worked alongside other retailers on these initiatives, which was a first in Saudi Arabia. Meanwhile, our staff continued to serve customers on the frontline, which was probably the most challenging aspect to navigating COVID-19 challenges successfully. The safety of our staff and customers was paramount. With shopping behavior, we saw a surge in demand for online shopping, an increase in app downloads, and a significant rise in online orders. We launched our online platform, Danube Online, four years ago when everyone was still skeptical about moving to online grocery ordering, but the decisions we made in the last few years in fact prepared our company for the future. We were able to revise our online operations and scale them up significantly in the first half of the year. Additionally, we used to see customers wanting to pick out fresh food on the fruit and vegetable aisle counters, but we now have a lot of pre-packaged products with the same product quality.

To what extent do you expect behavior to return to pre-pandemic levels?

We have to divide this question into two sections: when customers actually return to normal behavior and the government's plan and how effective the vaccine turns out to be. The government is rolling out an extensive vaccination program. The measures the government is taking are strong in terms of limiting travel and people coming in and out. There will be Hajj, but pilgrims need to be vaccinated. We expect customers to return to normal behavior as life returns to normal. For example, we may reach a level where there is community immunity, and enough people have already recovered from COVID-19 or been vaccinated. We are hopeful things will return to normal soon.

What change in activity did your stores see in 2H2020 with the introduction of VAT and regulatory measures?

We are in the FMCG business, which means we expect customers to shop regularly for their groceries and necessities. Customers increasingly expect their shopping experience to improve continually. We offer a better shopping experience with only the freshest goods at a competitive price. As a retail company, we do not have private labels on our FMCG items. The reason for that is that we are focused and committed to our partners and suppliers to ensure we offer the best price and products. Normally, when VAT is introduced or increased, we expect some pantry stocking before implementation so that customers can adjust over one or two months. We did not see the trend continuing for long. It took about one month before we saw customers returning to normal behavior and shopping habits.