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Overview
Trading in the Middle East and Asia can be traced back as far as 3000 BC, when Northern Mesopotamia bought jade and copper from nearby mountain regions through traders. Egypt collected salt from the Nile delta and exchanged it for wine and olive oil. Southwestern Arabia grew the spice trade by trading with eastern Africa and selling herbs and spices to northern countries. Camel caravans, often stopping at souqs outside cities, helped to establish the Silk Road, a network of trade routes that connected the Asian continent with Europe and the Western World. Today, as do most emerging markets, these regions combine traditional, modern and hyper-modern sales channels.
Business to Business
All the familiar ways to find, sell and distribute to businesses exist here, as in all emerging markets, including telephone and Internet options. However, the most important and effective are based on person-to-person relationships. Though much of corporate business, including procurement, subscribes to models as sophisticated as those anywhere in the world, true success in prospecting, meeting, and acquiring clients, is still highly reflective of who one knows and how well. Consistent with cultural traditions going back thousands of years and still standing the tests of time and global influence, personal connections trump the many challenges one can expect in B2B channels. Wise marketers choose service partners with long and deep roots, strong reputations and practical experience in these marketplaces in order to produce timely success.
Direct to Consumer
In emerging markets, marketers reach consumers directly in all the major ways they do so everywhere. For example, in the Middle East and North Africa regions Internet usage is growing rapidly and is split relatively evenly between males and females. About a third of users make at least one online purchase monthly; males mostly tend to buy electronic equipment while females tend to buy mostly apparel and fashion accessories. Door-to-door selling is also popular for most of the expected categories such as cosmetics, home and family services, electronics, etc. In fact, several of the major DTC world brands report most of their recent growth to come from emerging markets, including the Middle East and North Africa. In addition, one-to-one 'intercept' selling, particularly for telecommunications, real estate and other categories abounds in shopping malls, marketplaces and at public events. Wise marketers choose service partners with the scale, flexibility and skill to perform relevant services in all the right venues.
Value-Added Resale
Selling through value-added resellers is the most important way to reach consumers. Throughout the Middle East, North Africa and Gulf regions both shopping and dining out are immensely popular past times for individuals and families. As choices widen and affluence grows, purchase rates in this channel are skyrocketing. However, with hundreds of thousands of outlets and a competitive spread of business amongst large and small, independent and chain, brand success requires retail sales and distribution coverage to be broad as well as intensive. Wise marketers choose service partners with the scale, flexibility and expertise to maximize their competitive advantage at any and all of these first 'moments of truth' for brands.
Bulk and Breakout
Selling to wholesalers in emerging markets is a necessity for reaching the very small outlets in the many and very dispersed rural areas and tiny villages where much of the population lives and shops. These areas tend to be difficult and financially unrewarding to cover directly; however local wholesalers are able to do so effectively and efficiently. Because the majority of wholesalers are small, independent and operated traditionally, the business in general is relatively unsophisticated and competitive. Wise marketers choose service partners who know the extensive wholesaling network well, who can sell and deliver to wholesalers efficiently and who can expertly manage wholesaling activity on behalf of brands.
Full Representation
Working with distributors to effectively reach, influence and utilize all other channel players is a preferred strategy for many even most global marketers. In addition to the practical physical benefits they bring to sales and distribution activities, over time they can provide consistent strength, support and advice for expanding and growing business within and across markets. Sometimes, distributors recruit and engage sub-distributors under similar arrangements, as an effective means of reaching small and dispersed wholesalers and outlets. Wise marketers choose service partners with the experience, expertise, scale and strategic sophistication to market their brands effectively as distributors, to distributors or with distributors, over time.
Business
Emerging markets offer a wide range of businesses as potential purchasers and users for many products and services. In the Middle East and Asia regions in particular, most industries are growing rapidly, enabling existing businesses to grow larger and new businesses to enter the market. These industries are usually quite large. For example, in the relatively small country of Bahrain alone, the market for motor vehicles and vehicle parts exceeds US$600 million, while in Egypt, the market for commercial food processing equipment is US$1.5 billion. Opportunities include both public and private firms, of which family owned firms comprise the vast majority of companies, accounting, for example, for 90% of Saudi Arabia's businesses. Wise marketers choose service partners who know decision makers well.
Consumers
With growing populations and increasing economic power, emerging markets represent a large and fertile opportunity for consumer goods growth in the foreseeable future. The Middle East, Gulf and North Africa regions alone represent over 350 million potential consumers, all with similar needs and interests to people everywhere and many with growing purchasing power. For example, household expenditures in Saudi Arabia will increase from US$130 billion in 2008 to US$243 billion by 2012, a compound annual growth rate of 17%. Wise marketers choose service partners who can leverage and tailor global brand experience, knowledge and strategy to reflect local consumer preferences.
Distributors
Given the complexity and scope of consumer sales channel options in emerging markets, most marketers choose to partner with a distributor who represents their brands, usually but not always, on a mutually exclusive basis within a market or a portion thereof. Distributors tend to perform most or all of the services required in an effective value chain, including the importation, storage, transportation, and packaging or manipulation of goods as well as essential sales and support services to all other consumer oriented channels. Wise marketers choose service partners who can act as full service distributors or who can capably complement chosen distributors with specialized support services.
Outlets Retail HORECA
As in most markets, most individuals and families visit an outlet of some kind to buy products and services, either as shoppers of retail outlets for later consumption or as patrons of HORECA outlets for immediate consumption. Either way, emerging markets, particularly the Middle East and Gulf regions, today consist of sophisticated, complex and far flung networks of outlets in large numbers and varieties. Most of them are experiencing explosive, sustained growth. Wise marketers choose service partners who understand these crucial points of purchase and who plan, cover and influence them optimally.
Retail options have evolved way beyond souks, though souks still do a thriving business and are fascinating to visit. Today retail outlets number in the hundreds of thousands and include small, high-frequency stores (HFS), groceries, self-serve stores, pharmacies, supermarkets, hypermarkets, and shopping malls - some of the latter being amongst the largest, most stylish and most sophisticated in the world. Changing consumer demographics, a large expatriate population, and improving purchasing power are producing a preference for world brands. For perspective, in 2009, the Middle East retail industry was valued at more than US$425 billion, and is estimated to grow to US$682 billion by 2013.
The hospitality market in the Middle East is the fastest growing one in the world. It is expected to grow by more than 500% in less than ten years. Travel and dining out are very popular throughout the region and represent incredible opportunity. For perspective, there are over 400 hotels currently in development across the region, representing in Saudi Arabia and Egypt alone, an increase of more than 300,000 rooms over 5 years. The regional restaurant industry is growing at more than 10% each year with Saudi Arabia's expected to increase 500% within the decade. Although traditional, independent outlets still dominate in numbers, branded chains of all types are growing exponentially as consumer taste preferences swing towards more choice and global branding. With 65,000 institutional food service outlets also, Saudi Arabia alone represents a spectacular HORECA opportunity.
Wholesalers
As in most emerging markets, it is all but impossible for brands - whose success depends largely on broad availability - to succeed without the intervention and support of wholesalers. Throughout the Middle East and Gulf regions, where neither retail nor HORECA is yet concentrated anywhere near the extent to that of the developed world, wholesalers are important intermediaries for selling and delivering to independent or smaller outlets. They also offer benefits such as greater protection for goods, like fresh produce, through local storage and quick handling. Wise marketers choose service partners who have excellent relationships with wholesalers and who train, support and manage them.
Marketer
With projected growth rates almost triple those of developed markets, emerging markets represent very attractive opportunities for global firms who manufacture and market quality brands. For example, the Saudi Arabian economy is projected to expand 4.5% in 2011 (vs. 3.4% in 2010) due to increased public expenditure, strong fiscal policies, and higher oil prices. With growing participation in the World Trade Organization, these markets are increasingly more open and more competitive. Lucrative opportunities for profit abound but so do uncertainty and risk. Wise marketers carefully consider how to get their brands to market and who will help them do so.
 

 
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