Sunday, August 12, 2007

Doing Business in the Middle East

It was a relief to find out that our product shipment in Saudi Arabia will be released tomorrow. Our latest container to Saudi Arabian office has been held by the Saudi Customs for almost a month now.  We started selling the Heaven Fresh products in Saudi Arabia over two years ago and it has been a roller coaster ride since then.

Besides holding 25% of the world's oil reserves and being the largest oil producer,  Saudi Arabia also hosts more than 5 million pilgrims every year who are visiting the Muslim holy cities,  Mecca and Medina.  Disposable income from oil wealth and  millions of travelers makes Saudi Arabia one of the most lucrative markets in the Middle East for all kinds of products.  However, getting started in this potentially rewarding market is not exactly a child's play, especially for a micr0-multinational like Heaven Fresh with very limited ability to sustain any heavy financial mishaps.  The key to Heaven Fresh's success was a trusted local partner who understood the mind set of the consumers and had the capacity to market and distribute the products.  Although, we met with early success in terms of sales and distribution network setup, we ended up losing money because of unfulfilled financial commitments from our initial partnerships.   

We learned our lessons early enough to do the damage control and changed the business strategy to minimize our risk factors.  Although our sales have been growing steadily for past two years, the official red tape gets quite frustrating at times.  For example, every time our shipment reaches the port of Jeddah, Saudi Arabia, we come to know a new set of rules to get it released from the customs. Until now it has been a challenge and a great learning experience for us to do business in Saudi Arabia. We are hoping that some day our daring initiative will payoff in a big way.  Until then, we are ready for our next test in the Middle East's richest country.

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