China Clean Technology

Spanning 21 countries with a combined population of 450 million, the Middle East and North Africa (MENA) region offers substantial expansion opportunities for businesses across nearly every sector. Despite the size of the business opportunity, many foreign firms with success in Western markets either perceive or run into difficulties when approaching the MENA markets.

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Below, our Faithful Five provides foreign firms with tips on how to adapt—and succeed—in a varied and complex MENA market.

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Understand the Market

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While the MENA region is often lumped into one category for the purpose of simplicity, it’s critical to understand that although most of the constituent countries have some overlap in culture, language, and values, there is also substantial variation, chiefly in business and deal-making culture. Even beyond the culture in which business transactions take place are the various stages of development in which each country finds itself, and the corresponding gaps in the consumer markets. Have a plan, but don’t assume that it will work for every market. Keep in mind that going global really means going local, just somewhere else.

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With this in mind, design your entry strategy to suit each country. It may seem obvious, but it’s an all-too-common mistake: take the time to understand the specifics of the domestic environment, and tailor your approach—in attitude, goals, and tactics—to the individual country. Egypt, for example, boasts a massive and growing population of citizens under 30 years of age, and this rising consumer class will drive market demand for years to come. This booming youth population is quickly coming online and will bring with them huge demand for goods and services that connect their daily lives and consumption habits to the convenience of mobile apps and e-commerce.

Seek Expert Advice

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Nobody wants—or needs—to reinvent the wheel. Take the time to understand the pros and cons of working in the region by engaging with local expertise. A local consulting firm with international representation, or vice-versa, can guide you through the market.

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Likewise, don’t operate with blinders on; a firm or contact with a broad business background, rather than someone from your industry alone, can offer invaluable guidance. Without the guidance of an expert with local experience, the governments and business cultures in the MENA region can seem like a labyrinth. Seek out someone who knows the way, and you’ll save time and money in your approach and entry.

Be Flexible

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Most MENA markets and business environments operate in a different framework from their Western peers, and you need to be able to adapt to—and adopt—the unfamiliar. This could mean getting comfortable with the slower pace of the business environment in the MENA region, or committing to having a local presence on the ground to build relations. As elsewhere, but particularly in the MENA region, face-to-face communication is ideal.

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Again, the simple stuff goes a long way; be willing to translate some of your marketing materials to Arabic. While certain aspects are non-negotiable, like sticking to your core business model, it’s important to anticipate and be willing to adapt it around the edges.

Make Friends, not Business Partners

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Despite the adage “it’s nothing personal, just business,” business relationships and personal friendship in the region are one and the same. Business cultures in and around the Arab peninsula generally prefer to do business with people they know and, crucially, people they like. Small talk is more than a simple courtesy, it is a way of finding out whether you will be a suitable and amicable business partner. Prepare for many hours of drinking tea and bonding, and engage in conversation freely and enthusiastically. Dinners, friendly outings, and sharing personal stories all help to build the all-important personal relationship.

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Find a Unique Approach–Monitor Government Initiatives & Understand Local Laws

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Use the right local platforms to promote your company, and as you demonstrate the commitment of your presence, you’ll find that this leads to even more opportunities to expand. Many governments in MENA are currently undertaking long-term strategic visions (e.g. Egypt Vision 2030), and these domestic plans can create huge opportunities for foreign investors to contribute while at the same time helping their own bottom line. Look for these win-win scenarios; show how your products, services, and capabilities align with domestic market development goals, and you could ride atop a wave for years to come.

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Each country in the MENA region has its own set of rules and regulations. Fortunately, there is a common theme at the moment; many of the regulatory environments are changing to encourage more foreign investment. Egypt, for example, released a new investment law in late 2017. Investment Law No. 72 aims to promote foreign investment by offering incentives, reducing bureaucracy, and simplifying and enhancing business processes. This is another area where the guidance of an expert with local experience can turn a mountain into a molehill.  

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Successfully expanding into new markets, particularly those with such a varied mix of geography, economic development, and culture as the MENA region, requires firms to take stock of what factors are beyond or under their control. All too often in international expansions, firms underestimate just how much they can control. Understanding what makes the new market unique, enlisting the readily available help of local experts, and learning the deal-making culture of the region won’t happen by accident, but each is a step that can eliminate ambiguity and improve a firm’s ability to create and deploy a sound, tailored strategy. Keeping in mind these Faithful Five tips will help your firm enter the MENA market in a way that plans for success and avoids roadblocks.

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