International Apr, 01 2011

Middle East: Horizon for Brands’ Success

Gulf markets offer profitable business proposition for Indian retail and franchise brands owing to its business friendly environment promising continual economic growth. This part of the world is of prime importance to the business organisations eying int

By Namita Bhagat
Feature Writer
Middle East: Horizon for Brands’ Success

Experts believe that Gulf Cooperation Council (GCC) region is going to be a key driver of global economic growth. Many successful and recognised Indian Companies have shifted their focus to GCC countries (UAE, Saudi Arabia, Bahrain, Kuwait, Qatar and Oman) to expand their operations via retail and franchise route as part of their international growth strategy. The region is on road to economic recovery and has affirmed its economic strength and resilience. Many international brands are establishing their presence to explore potential business opportunities in the Middle East & North African (MENA) market.

Factors for Expansion in GCC

The GCC region and especially UAE business milieu is very conducive to ‘start a business and operate a business’ owing to favorable public policy, trade free zones and well diversified economy. The statistics show that more and more people in the region are interested in own ventures to have economic liberation and self reliance. Also, they accept retail/franchise as a proven business model with high success rate. Indian brands have a great opportunity to offer their retail/franchise concepts and attain profitability and network expansion. Indian brands already present there are seeking further development and a lot of others are ready to introduce themselves in the region. They may adopt a bilateral strategy by which they present their retail/franchise business concepts to expat community as well as the local residents who are interested to associate with reputed Indian brands. The governments and financial institutions also ably support retail/franchise initiatives of young graduates and women.

Brimming Sectors for Growth

The sectors brimming with retail/franchise biz opportunities are: Hospitality, F&B, Beauty & Fitness, Jewellery, Health care & Wellness, Education, Fashion & Apparel, Accessories, Foot ware, Financial Services, Logistics, Travel & Tourism, Leisure & Entertainment, Real Estate, Construction, Transportation, Courier Services, IT & ITES & many more. The retailers and franchisors would find profitable business prospects in high cost, mid cost businesses and also low cost ventures including home biz & Kiosk concepts with high ROI.

Existing Players’ Opinion

Many Indian Jewellery retail groups have consolidated their presence in Mid-East namely Gitanjali Group, Malabar Gold, BRR Jewellery, Joy Alukkas etc.  Mehul Chowksy, CMD, Gitanjali Group shares his experience of retail expansion in mid-east, “Gitanjali has penetrated the UAE market with their distribution cum retailing strategy. All brands have become so powerful and well accepted. The major drivers were Indian Diasporas coupled with local UAE nationals association with brand ambassadors and large jewellery buying behavior for domestic as well as tourists. We are planning to expand by 4-5 stores in next one year.”

The education brands like Kidzee, EuroKids, Kangroo Kids, Shemrock and Shemford schools have forayed into the Gulf region to cater to the Indian Diasporas and there is huge scope yet to be utilised to the advantage of Indian companies. Amol Arora, MD, Shemrock and Shemford Group of Schools comments, “We see major growth potentials in these markets in the Middle East as there is a sizeable Indian population who are looking for good Indian education for their children. Opening a school in the Middle East requires not only adherence to CBSE standards but to local government laws as well.”

Even the Beauty & Wellness companies have their extended reach into the region with brand presence of Shahnaz Hussain, KAYA, and VLCC etc., by either franchising or company owned outlets. Samir Srivastav, EVP and Regional Head, Kaya Skin Clinic says, “UAE and India are both different markets with different tastes and preferences of clientele. In Middle East, penetration and demand of advanced services is much higher and beauty is of utmost importance and priority.”

The F&B space has high potential business opportunities for Kiosks, Quick Service Restaurants, Full Service restaurants, Cafes and other formats. Indian brands like, Khazzana, The Great Kabab Factory, Café Coffee Day, options to name a few. Satya Mukherjee, Head of Marketing, Khana Khazana India Pvt. Ltd while justifying the initial challenges for expansion in UAE says, “We opened our first outlet in franchisee mode with a local partner who did everything while our job was to provide the brand expertise. So as such we did not face any challenges.”

Also, all other sectors have plenty of potential business prospects for Indian Companies to utilise to achieve growth and profitability and global presence.

To conclude it is appropriate to say that Gulf markets are an attractive business proposition for Indian retailers/franchisors and they can grow profitably in Mid-East. They need to do comprehensive research and aim at quality presence. They would require adhering to the local legal system and be prepared to customise their retail/franchise concepts to suit the regional sensibilities.

Related: We are seeking Regional Master Franchisees: John Howard

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