Archive for category Marketing
The path to become the first Emirati female film director was not easy for Nayla Al Khaja. But despite the adversities she faced and the sacrifices she made to pursue her career, Al Khaja is full of optimism for the Gulf’s film industry. She sees the potential for her native United Arab Emirates to become a regional film hub, and cites examples in Europe the country could emulate. She tells Arabic Knowledge@Wharton that regional governments should lend support to aspiring movie directors and producers.
Read the full story: http://knowledge.wharton.upenn.edu/arabic/article.cfm?articleid=2931
There are a number of opportunities in the Middle East that are missed by following popular stereotypes, says Vijay Mahajan, author of The Unbound. For instance, the region boasts booming retail and media industries, he tells Arabic . But companies would be making a mistake to look at the most wealthy and modern parts of the region and expect every Middle Eastern market to be like that, Mahajan notes.
Read the full interview: http://knowledge.wharton.upenn.edu/arabic/article.cfm?articleid=2933
Dana Al Taji loved fashion, but when she decided to don the draping abaya, she found that traditional Islamic dress designs didn’t reflect her personal style. So Al Taji started making her own abayas, which she describes as trendy yet modest. She realized other Muslim women wanted the same and launched her own line of Islamic couture called Layal, offering everything from abayas for expecting mothers to eveningwear ensembles. “You are presenting; you’re representing your religion,” she says. “You chose to dress in a certain way, so let it be nice and trendy and clean and appeal to other people.”
The Middle East fashion retail market features some of the wealthiest and most demanding customers in the world. But the region has never had an online retailer targeting the market. That was the opportunity Muhammed Mekki and Faraz Khalid hoped to exploit with Namshi.com. The startup gained enough momentum to attract US$20 million in funding this past September. In an interview with Arabic Knowledge@Wharton, Mekki and Khalid discuss the challenges for online retail in the region and the strategies that have led to their success.
Here are some highlights:
Arabic Knowledge@Wharton: What is different about online retail in the Middle East?
Muhammad Mekki: The unique factor of this market is that the range of opportunity is so much greater than most developing markets. The infrastructure is in place, and the consumers are ready to buy online. The set of options out there are limited. That was the premise when we first started. We looked at fashion e-commerce and noticed that no one was doing in season, in stock fashion e-commerce, the way that Zappos does in the United States. So we decided to fill that gap. We started with the seed funding of Rocket Internet out of Germany. It got us started and the team running, and then based on the growth of orders and the setup we developed, we were able to go out and raise the largest ever round of funding for e-commerce in the Middle East. It was necessary because of the business model — we need to buy stock ahead of time, and we have marketing expenses.
There’s an entire set of business models that are waiting to be developed. Now, the region is catching up in infrastructure. So whether it’s the availability of payment types, like credit cards or delivery, or Internet penetration, all these aspects have finally reached a point where online businesses can be viable. Also, if you look around our offices, you will see the sheer diversity and talent that we are able to bring together — Dubai is a very unique city in that regard. We have teams comprised of Europeans with Asians and Arabs, even South Americans. It is even different than the U.S., because they are not hyphenated nationalities. To see the interactions between them, and seeing them gel around this concept, is something that inspires us.
Arabic Knowledge@Wharton: And what are some of the unique challenges?
Mekki: There is a reason why there aren’t 15 e-commerce players in the market already. It is a challenging market, because the [e-commerce] trend has not been set, and the expectations of customers are wildly disparate. We have a responsibility as Namshi to set that trend.
One is educating the consumer. Part of that is marketing. We’re the first of these companies to go very wide scale with a television commercial in Arabic. We try to target a very wide range of customers, and try to educate them with the benefits and the ease of buying online. Part of that is instilling trust. We work hard to show people that this is a legitimate business, and we sell real product — we exist, and when you order products, we will send it to you. So that’s a challenge we have. But doing something like launching a TV campaign helps legitimize us.
We still have challenges in fulfillment, specifically in Saudi Arabia and other GCC countries. The operations here in the UAE are very smooth. If you place and order today, you’ll get a phone call from our logistics partner Aramex by the late afternoon, scheduling your delivery for the next day — which is a wow experience that nobody else in this market provides. For Saudi Arabia and other remote regions, we can ship it out quickly, but then following up with the customer, getting it to them and closing the deal can be challenging.
When we first started, we had cash, and we were trying to buy products from brands, pre-paid, and they refused to sell to us. You would assume it wouldn’t be an issue for a funded business. But they didn’t trust the region, they didn’t trust what our website would look like; we were an unknown commodity. We started from pleading with brands to buy from them, to now refusing to deal with any brand that does not give us credit terms. We went though this entire cycle, and now we’re getting more aggressive on credit terms.
Arabic Knowledge@Wharton: You both are trained somewhere else, and are working somewhere else. How do you take that knowledge from one place, bring it to a new place, and how do you utilize that knowledge to actually succeed?
Khalid: I’ve had experience in e-commerce before, in a different setting. The core mechanics stay the same. An online shopper is an online shopper. There is still a process to attract someone to your site. There’s a cart experience and then a post-sales process. What has been an eye opening experience for me is how similar the online audience has been. The mechanics are the same — conversion rates, for example, are very similar to the developed world; the rate of customers calling us, and the rate of customers returning to us are similar. We’re in a unique position to leverage some of our unique relationships that we made in school, and from our past lives. Sometimes I find myself picking up the phone and calling an old classmate, asking him how to solve stuff. So some of it is reactive, sometimes the knowledge is within the team, but it’s also the resources we can leverage as well. One example was that we were looking to bring a brand of shoes online. We were trying to find the right connection, and it was hard to get to the right person in that company. So we just looked up our alumni database and found three people in that company whom we could reach out to.
Arabic Knowledge@Wharton: Both of you have mentioned how critical it is to have the right team. How did you go about doing this?
Mekki: It’s something we are passionate about. Finding the right people, and empowering them, supporting them to make this company what it is. That’s probably the most critical part of our jobs. It all starts with recruiting — finding very qualified people, but who really exhibit the Namshi culture, of energy, thinking big, non-bureaucratic, we do more with less. There are key components of our culture that we look for specifically. No matter how sharp somebody is, we will not hire them if they do not meet these requirements. In fact, we will let people go if they do not display these over time, because it becomes a drag on the organization. That’s a strategic decision we made from the very beginning, which has served us quite well.
Read the full interview on Arabic Knowledge@Wharton
Cheeseburger Pizzas, Designer French Fries and a Post-war Cinnabon: Fast Food’s Booming Middle East Market
According to a survey by MasterCard, Gulf consumers were the top three spenders on restaurants — UAE diners spent an average of US$229 per month, Qataris averaged US$211 per month, and Kuwaitis spent US$196 per month. The same survey found that 88% of respondents said they dined in shopping mall food courts.
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Nasser D. Khalili has built a renowned art collection that has been exhibited around the world, including in London and New York. Khalili says he has maintained a passion to show his treasures — not merely amass them — because of the power art has to connect and educate people. In an interview with Arabic Knowledge@Wharton at the recent Festival of Thinkers conference in Abu Dhabi, Khalili shares his insight into art collecting and how the market has changed with an influx of money. He also discusses the development of arts and culture in the Middle East and North Africa.
“I think it’s incredibly important, [if you are] calling yourself a collector, to make sure that you fulfill five criteria,” he notes. “You have collect, you have to conserve, you have to research, you have to publish and you have to exhibit… Don’t be a holder; be a collector. Only then could you consider yourself a collector, because you have contributed to the betterment of humanity and life. You have done something. If you are buying a few objects or roof of objects and taking them home only for your own enjoyment, don’t call yourself a collector, call yourself a selector for your own enjoyment.”
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A new direction for Middle Eastern cinema has evolved with the Arab Spring. The revolutions have provided filmmakers with fresh narratives and wider global interest in Arab film, which has dovetailed with an appetite in the Arab Gulf to invest in culture and become a new hub for the industry, one long dominated by Egypt. Interest in filmmaking in the Arab world is also driven by newfound economic potential, both in domestic production and financing international films. Hajer Ben Nasr, a Tunisian documentarian, speaks to Arabic Knowledge@Wharton about the opportunities and challenges for Arab filmmakers. “It’s not yet an industry (but) some people now see an opportunity to make money,” she says.
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Tunnock’s is considered a treat favored by British grandmothers, but half of the company’s total annual exports are shipped to the Middle East. The company’s annual sales amount to approximately £34 million (US$52.2 million), of which 10% represents market share in the Middle East.
“Just like Italian culture has been romanticized in the U.S., people in the Middle East may see British food as a sign of being cultured or worldly,” says Jonah Berger, Wharton professor of marketing at the University of Pennsylvania.
The Middle East has proven to be a lucrative market for the snack industry. Euromonitor International, a strategy research firm in consumer markets, reported the industry grew 10% last year in Saudi Arabia, and forecasted sweet biscuit sales this year worth US$437.5 million. In the United Arab Emirates (UAE), the biscuit industry, including sweet and savory snacks, Euromonitor predicts 7.6% growth this year, valued at US$133.1 million.
Interestingly enough, Euromonitor notes economic declines in the Middle East actually help snack sales in the Middle East, showing increases in snack sales since the global financial crisis bgean. Sounds like somebody’s been indulging in a bit of comfort eating.
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