Report Overview

The GCC member countries’ economic diversification initiatives, rapid adoption of e-commerce and digitalization, and a heightened focus on enhancing customer engagement are expected to drive GCC AI in Retail Market during the forecast period between 2026 and 2032.

GCC AI in Retail Market – Industry Trends & Forecast Report, 2032

GCC AI in Retail Market size was estimated at USD 313.75 million in 2025. During the forecast period between 2026 and 2032, GCC AI in Retail Market size is projected to grow at a robust CAGR of 22.23% reaching a value of USD 1,279.12 million by 2032. Prominent drivers of GCC AI in Retail Market include the rapid adoption of AI technologies to enhance personalization, optimize operations, and improve customer engagement in the retail sector. As consumer expectations rise, retailers in GCC are increasingly leveraging AI to deliver tailored shopping experiences, supported by a tech-savvy population and a surge in e-commerce. Saudi Arabia Vision 2030’s emphasis on digital transformation is further accelerating AI integration across retail formats, including fashion, grocery, and online platforms. AI technologies such as machine learning, natural language processing, computer vision, and predictive analytics are being deployed to enhance inventory management, fraud detection, and customer service. Moreover, investments in IoT, automation, and data governance frameworks are enabling real-time inventory tracking, automated checkout systems, and actionable insights from structured and unstructured data. Retailers are also focusing on upskilling employees and fostering an open innovation ecosystem to maximize AI’s potential while ensuring empathetic integration. As AI advances through generative capabilities and edge computing, retailers are adopting a human-centric approach, balancing automation with personal engagement, addressing employee concerns, and creating value through innovations, collaborations, and sustainable, AI-powered solutions tailored to GCC retail markets.

AI in Retail – Overview

AI in retail uses technologies, such as machine learning (ML), natural language processing (NLP), and computer vision to enhance customer experiences, optimize inventory, and streamline operations. Retail AI technologies enable personalized recommendations, dynamic pricing, and demand forecasting. By analyzing data, AI helps retailers make smarter decisions, improve efficiency, and deliver more tailored and engaging shopping experiences.

GCC AI in Retail Market

Growth Drivers

Increasing Focus on Economic Diversification from Oil & Gas

Member countries of GCC are increasingly focusing on reducing their overdependence on oil economy by diversifying their economy to other major sectors, including travel & tourism, ICT, and retail. It, in turn, is boosting the expansion of AI in retail markets. For instance, Saudi Arabia’s Vision 2030 serves as a transformative blueprint guiding the Kingdom toward a diversified, innovation-driven economy, with artificial intelligence (AI) playing a central role across key sectors, including retail. The establishment of the Saudi Data and Artificial Intelligence Authority (SDAIA) in 2019 marked a pivotal move to build a world-class AI ecosystem, enabling both public and private sector advancement. Government-led initiatives, such as the National Strategy for Data and AI (NSDAI), are accelerating AI integration in retail by promoting digital infrastructure, data analytics, and customer-centric technologies. Strategic investments, including KAUST’s Shaheen III supercomputer and platforms like Estishraf, are facilitating data-driven governance and private sector innovation. These efforts have created a supportive regulatory framework that encourages retail businesses to adopt AI for personalized customer experiences, efficient inventory management, and enhanced supply chain visibility. The rapid growth of e-commerce—over 20% in 2021—coupled with deepening smartphone penetration, further reflects the Kingdom’s digital momentum. Additionally, Vision 2030’s focus on entrepreneurship, ethical AI use, and AI-focused education has energized retail innovation, positioning GCC countries as leading markets for AI-driven retail transformation. Hence, economic diversification is a major growth factor for GCC AI in Retail Market.

Challenges

Data Privacy Concerns and Regulatory Compliance

Data privacy concerns and regulatory compliance pose significant challenges to the adoption and growth of AI in the GCC retail sector. Stringent regulations surrounding the handling of consumer data, coupled with the need to ensure transparency and security, could delay the implementation of AI technologies. Retailers must navigate complex legal frameworks to avoid penalties, which may slow the pace of AI integration in their operations. Ensuring compliance with both local and international data protection laws is essential for building trust with consumers, yet it could also act as a barrier to the full potential of AI-driven innovations in retail.

Impact of Escalating Geopolitical Tensions on GCC AI in Retail Market

Escalating geopolitical tensions could significantly impact the growth of GCC AI in Retail Market by introducing both strategic opportunities and operational challenges. The Kingdom's partnerships with Chinese tech firms like Alibaba and SenseTime, while bolstering local AI capabilities, may attract scrutiny from Western nations due to national security concerns. Conversely, GCC's substantial investments in AI infrastructure, such as the proposed USD 40 billion AI fund and collaborations with global entities, position it as a competitive player in the global AI landscape. However, navigating these geopolitical dynamics requires careful balancing to mitigate risks and capitalize on emerging opportunities in the retail sector.​

GCC AI in Retail Market

Segmental Coverage

GCC AI in Retail Market – By Component

Based on component, GCC AI in Retail Market is bifurcated into Solutions and Services segments. The solutions segment holds a larger share in GCC AI in Retail Market by component. The segment’s growth is driven by the increasing adoption of AI-based technologies to address operational challenges faced by retailers. These advanced solutions enhance supply chain, logistics, and warehouse management while also elevating the overall customer experience. Also, the solution segment includes AI-based analytics platforms, customer behavior tracking tools, and personalized recommendation engines.

GCC AI in Retail Market – By Technology

On the basis of technology, GCC AI in Retail Market is divided into Machine Learning (ML), Natural Language Processing (NLP), Computer Vision, Chatbots & Conversational AI, and Robotics Process Automation (RPA) segments. The ML segment holds the largest share of GCC AI in Retail Market by technology. It is driven by its transformative impact across retail operations. ML algorithms excel at processing vast datasets, enabling data-driven decision-making and enhancing marketing strategies. Retailers leverage ML for customer segmentation, tailoring personalized experiences that improve engagement and boost conversion rates. Predictive analytics powered by ML further enhances lead scoring and dynamic pricing optimization, ensuring competitive positioning in the market. Additionally, ML-based chatbots and personalized content recommendations are improving customer service and loyalty. With its role in fraud detection and real-time decision-making, machine learning remains a cornerstone technology, empowering Saudi retailers to enhance efficiency, profitability, and customer satisfaction.

GCC AI in Retail Market – By Application

Based on application, GCC AI in Retail Market is segmented into Customer Relationship Management (CRM), Supply Chain & Logistics, Inventory Management, Virtual Try-On & Augmented Reality (AR), Fraud Detection & Prevention, Product Recommendation & Personalization, In-store Visual Monitoring & Analytics, and Chatbots & Virtual Assistants (VAs). The CRM segment accounts for the largest market share of GCC AI in Retail Market by application. The chatbots & virtual assistants (VAs) segment is projected to expand at the fastest CAGR in GCC AI in Retail Market by application over the forecast period.

GCC AI in Retail Market – By Country

The in-depth research report on the GCC AI in Retail Market covers the market in all the GCC member countries: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates (UAE). Saudi Arabia holds the largest market share of GCC AI in Retail Market and is expected to maintain its dominance during the forecast period. The growth of Saudi Arabia AI in Retail Market is driven by rising demand for advanced retail solutions and services. The UAE, on the other hand, is forecast to grow at the quickest CAGR in the coming years, primarily driven by growing young and expatriate populations.

Competitive Landscape

Major players operating in GCC AI in Retail Market include IBM Corporation, Microsoft Corporation, Google LLC (Alphabet Inc.), Amazon MENA, SAP SE, Oracle Corporation, Antier Solutions, Apptunix, Chalhoub Group, Cognizant, DTEK, G42 (Group 42), GMG (Gulf Marketing Group), Majid Al Futtaim, Mozn, and Noon. To further enhance their market share, these companies employ various strategies, including mergers and acquisitions, partnerships, joint ventures, license agreements, and new product launches.

Recent Developments

• In May 2025 - Majid Al Futtaim (Carrefour) formed a partnership with Advertima to deploy Audience AI across hypermarkets. Audience AI helps in merging real-time in-store intelligence with online data for focused retail media targeting.

• In March 2025 - Prime Markets became the first retailer in Saudi Arabia to deploy Simbe’s Tally robot, enhancing inventory management and customer experience. Tally uses AI and computer vision to autonomously scan store aisles, detect stockouts, pricing errors, and misplaced items.

• In March 2025 – Saudi Arabia’s Public Investment Fund (PIF) launched Al Waha Duty Free Operating Co., the Kingdom’s first locally-owned duty-free company, to strengthen its travel retail sector and boost tourism. Al Waha aims to establish luxury retail outlets at key locations, offering a variety of products, including exclusive Saudi items.

Scope of the Report

By Component

• Solutions

• Services

By Technology

• Machine Learning (ML)

• Natural Language Processing (NLP)

• Computer Vision

• Chatbots & Conversational AI

• Robotics Process Automation (RPA)

By Application

• Customer Relationship Management (CRM)

• Supply Chain & Logistics

• Inventory Management

• Virtual Try-On & Augmented Reality

• Fraud Detection & Prevention

• Product Recommendation & Personalization

• In-store Visual Monitoring & Analytics

• Chatbots & Virtual Assistants

By Country

• Saudi Arabia

• UAE

• Qatar

• Kuwait

• Oman

• Bahrain