Monday, June 9, 2008

Online Business in the Middle East

When we opened our office in the United Arab Emirates, we were warned by many people about the difficulties of doing business in the Middle East. We were particularly concerned about the fact that Internet shopping was not big there which is a vital part of our startup strategy.

It took the longest time out of all of our international branches to reach the break even point in the Middle East.  However, after three years I can say that Internet has played a significant role in our growth there. We get a decent number of orders in UAE (Dubai, Abu Dhabi, Sharjah etc.) through our web site.  The use of credit cards for online sales is still almost non existent, therefore we ship all the orders COD (cash on delivery).  Although a few customers have placed orders on the web using online shopping cart, a vast majority bargains and places order over the phone.

As of today majority of our revenues are realized from sales in Saudi Arabia.  Saudi Arabia is the richest but the most difficult market to penetrate in the Middle East. The key to success there is to find a good partner to work with. It was a very risky bet for us to invest in Saudi Arabia, but it is starting to pay off now. We have recently signed a distribution agreement with a well established Saudi group.  Sales have been growing steadily for past year or so but we are hoping that they will sky rocket working hand in hand with our new partner there.

We are planning to expand into other Middle Eastern countries within a year or so and Online marketing will be a major piece of that expansion strategy.

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