Jarir Marketing Co., which owns Jarir bookstores, expects a single-digit growth in sales next year, following a double-digit pace in 2017 as the company acquired market share from smaller rivals, Reuters reported, citing chairman Muhammad Al-Agil.
This year, Jarir increased its market share in the electronics retail segment to 20 percent in 2017 from 15 percent, he said. Smaller electronics companies have struggled to absorb the financial pressure from the Saudization initiative that requires firms to hire Saudi citizens instead of less costly expat workers, the report said.
"Next year our projections will be modest because there's a huge base," Al-Agil told Reuters. "We expect to have single-digit growth in sales next year."
The projection takes into account the likely impact from the introduction of a 5 percent value-added tax in Saudi Arabia and other Gulf countries, he added.
According to the chairman, Jarir aims to continue expanding its store network, with plans to open six to seven stores in Saudi Arabia and rest of the region next year and hire 400 people, including 300 Saudis. The plans for 2019 include opening another five to seven stores.
Jairr currently has over 4,000 employees and more than 50 stores.
Al-Agil did not comment on plans for Qatar, where the company operates through a local partner, the news agency said. Saudi Arabia cut diplomatic and transport ties with Doha in June, accusing it of supporting terrorism.
While the company will continue to maintain its focus on Saudi Arabia, it also wants to grow in Kuwait, the United Arab Emirates and Bahrain, the report said.
Jarir is also doing feasibility studies to begin business outside the Gulf region and that Egypt was one of the countries of focus, Al-Agil said.
He added that while a decline in oil prices hurt Gulf economies in 2015, consumer demand began to recover in 2016, partly because of the region's young demographics that are interested in new gadgets and technology.
Jarir Marketing Co. posted nearly 19 percent growth in net profit in the first nine months of 2017, driven mainly by an increase in sales of electronics as well lower non-operating expenses.
"There is a lot of change in the economics of the oil producing countries, and that we think is an opportunity to take market share and to expand," Al-Agil said. "Even if the oil price is at $40 a barrel or $50, I think we have no issue."
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