Go retail in Riyadh

Much has been said and written about market globalization in the new century. More and more, companies no longer see their markets as being limited to their community, state, or even this country. To succeed in the economies of the new world, we have to view our markets as international if for no other reason than our competitors and customers see these markets.

The press loves to make a fuss about the impact of international trade on the national workforce. While this is a concern, the old axiom that every problem is an opportunity applies well to this business model. If we as entrepreneurs begin to see the international business community as an opportunity for us to take advantage of markets and revenue streams unimaginable in another market environment, then we can generate new profit that can come with success in those markets.

However, doing business in overseas markets requires some changes in how we structure our contracts and our sales and distribution networks. The rich cultures of the Middle East is one of the most explosive markets that is just beginning to become available to Western companies. With the explosion of Dubai projects and the westernization of many Middle Eastern cultures, it has become possible to “go retail in Riyadh” if we are willing to learn the culture and how to approach these markets. To do this, the following limitations must be taken into account.

• The markets of the Middle East protect themselves by themselves. Many Middle Eastern countries restrict trade between commercial entities only within the country. Partnerships can be used with local companies that can bring your product and create a local franchise. Your business still belongs to you, and so do the profits, but the localization of your presence in the Middle East economy is set up to meet these constraints.
• Middle East markets operate in accordance with Islamic Sharia. There will be interruptions to the daily prayers and the Islamic holidays that you are expected to honor. So be prepared to respect these habits. Also be sensitive that nothing in your product offerings indicates other religious views. This is not shy about our culture. It is just being an expert on how to operate profitably in an Islamic culture.
• Distribution and management must be internationalized. You probably won’t be able to set up a warehouse in the middle of Saudi Arabia with your company name on it. Because of the local bias of the countries in which you want to do business, take advantage of any existing distribution channels that pass through Europe or other neighboring countries to route your product to the Middle East and hand over ownership, management and distribution of the product within the Middle East to your Arab partners before the product enters the country. This careful setup of your network will pay off in the long run.
• There are friends and enemies in the Middle East. Many fear doing business in the Middle East because of the risks posed by the recent conflicts. Just be aware that the West has many allies in these countries and there is a desire to partner with us in the more developed economies of the Middle East. By being careful while forming your relationships and using local wisdom to craft your business dealings, you can do business in the Middle East safely and profitably.

These are important issues when considering whether it is time for your company to start offering your products and services to the rich countries of the Middle East. But if the time comes when your business is ready to start creating these international trade channels, the results can be very profitable relative to your bottom line. The investment is worth the effort if the business structures are developed wisely.