(Yicai) Sept. 17 -- The expanding retail real estate sector in Saudi Arabia has opened a rare window for Chinese companies, according to the chief executive officer of Cenomi Centers, the largest owner, operator, and developer of shopping malls in the country.

Cenomi Centers, which runs 21 malls across nine Saudi cities with more than 4,250 stores and annual footfall exceeding 127 million, is looking to deepen ties with Asian investors and sees opportunities for Chinese companies within Saudi Arabia's evolving shopping mall ecosystem, Alison Rehill-Erguven told Yicai at CMF Select Shanghai 2026, an extension of Saudi Tadawul Group's CMF series staged in the city for the first time from Sept. 3 to 4.

"Late last year, we completed an Islamic bond refinancing, and we saw a sharp rise in attention from Asia," she noted. "That is why we decided to travel to the region this year to connect with potential Asian investors."

Saudi Arabia is deepening engagement with China on multiple fronts. In addition to CMF Select Shanghai, the country's Public Investment Fund, the world's fifth-largest sovereign wealth fund with more than USD1.15 trillion in assets, launched an office in the city in June and adopted a three-hub structure for its China-facing investment strategy covering Hong Kong, Beijing, and Shanghai.

Building Shopping Areas Under Vision 2030

Launched in 2016, Vision 2030 is Saudi Arabia's strategy to diversify the economy away from oil dependence and drive social modernization. The government is developing new cities, downtown districts, and business hubs.

"We align closely with many core pillars of Vision 2030 and sit right at the intersection of these development priorities," Rehill-Erguven pointed out.

Established in 2002, Cenomi Centers has maintained dialogue with PIF and its affiliated entities regarding partnership opportunities. Earlier this year, the company linked arms for the first time with Saudi Downtown, a PIF unit developing downtown destinations across 12 Saudi cities. The flagship project in Al Khobar comprises a shopping mall and commercial street, with a supporting boulevard progressing at the end of June, while a second project is planned for Al-Medina.

The Saudi retail real estate sector still has substantial room to grow, Rehill-Erguven said. "This year we will launch two new projects in Riyadh and Jeddah. We aim to bring local shopping malls up to global benchmarks, drawing comparisons with Shanghai's iAPM or Taikoo Li. Our ambition is to create destinations in Saudi Arabia that can stand alongside these leading global benchmarks."

The expansion of commercial real estate has also driven growth in Saudi Arabia's high-end interior fit-out market, which industry estimates put at about SAR17 billion (USD4.5 billion), with premium costs reaching up to SAR6,000 (USD1,590) per square meter. Despite generous government industrial incentives, many local merchants still consider domestic manufacturing more costly than imported finishing materials.

Chinese Mall Experience

Rehill-Erguven drew on her previous experience of living and working in Shanghai to compare online and offline retail consumption in China and Saudi Arabia.

"China has one of the world's most developed e-commerce markets. Saudi Arabia has not reached that level," she said. "Therefore, for physical offline consumption, I have observed how Chinese shopping malls refine tenant mixes by adding more dining, entertainment, service, and children's-education offerings to create rich in-person experiences for consumers."

Although e-commerce continues to grow in Saudi Arabia, physical retail remains central to how people shop, socialize, and spend leisure time, she stressed.

"A strong mall-going culture persists locally. Extreme heat is one major factor," she pointed out. "Saudi Arabia has also historically developed around a different urban model than cities such as Shanghai. Consequently, shopping malls remain vital venues for family outings and social interaction across Saudi society."

Saudi mall operators are adjusting tenant mixes to offer consumers more than shopping, Rehill-Erguven said. "We are adding more entertainment, dining, and service-oriented offerings within malls. We are also learning from Chinese experience and paying close attention to educational formats, such as art and music centers.

"I believe this will be the next major growth frontier," she stressed. "Chinese companies can enter the Saudi market precisely with these types of formats, and Saudi Arabia can draw valuable lessons from China's commercial-real-estate operational expertise."

Chinese consumer brands including Huawei Technologies, BYD, Miniso Group Holding, and Balabala have already gained traction and popularity among Saudi consumers, Rehill-Erguven noted, adding that Chinese tech and digital-device companies could find further cooperation opportunities in the local retail market.

Consumer Preferences and Localization

Beauty, cosmetics, and accessories are another area of opportunity in Saudi Arabia, Rehill-Erguven pointed out. "Consider that local women wear traditional garments. They express their individuality through watches, eyewear, handbags, footwear, and more.

"Accessories represent a standout track. Emerging tech products can even function as another form of accessory," she said. "These segments hold abundant opportunities for Chinese enterprises."

However, Chinese companies entering Saudi Arabia need to conduct thorough market research into local consumer preferences, she noted. "There are clear differences across Saudi cities, much like in China. Consumer preferences, customs, and lifestyles vary between cities and regions, so solid research is essential to grasp local cultural codes."

Rehill-Erguven compared the position of Chinese brands entering Saudi Arabia to that of foreign brands entering China decades ago. "Global brand recognition helps, yet understanding local consumers matters more.

"Companies should learn about local Saudi artists and musicians, appreciate local cultural symbols and sense of identity, and make appropriate localized adaptations," she stressed. "This approach will help win Saudi consumers over."

But Chinese brands do not need to set aside their cultural identity to succeed in the Saudi market, she said. "Saudi consumers appreciate vibrant colors, profound histories, ornate artwork, and Islamic-Arab aesthetics. Brands that preserve distinct Chinese cultural DNA can therefore resonate powerfully with Saudi audiences."

Chinese brands could stage Chinese New Year-themed activities in Saudi Arabia to highlight their culture, while also tailoring offerings to local occasions such as Ramadan and Eid al-Fitr, she added. "Such efforts can spark many creative synergies."

Editor: Martin Kadiev