Arab Business.
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Islam is the fastest growing religion in the world and thanks to immigration; it’s the second largest religion in Europe and the U.S.
American resentment by mainstream Arabs doesn’t come from our wealth or power. Millions of Arabs immigrate to the West because of our values, success and way of life.
Even though George Bush has said, “They hate us for our freedom”, the real complaint is, America uses its power to get what it wants from other countries.
Arabs greatly value religon and respect anyone who practices it sincerely; no matter what their faith.
Economic growth and literacy rates are rising among Arab countries. There is discussion about adopting beneficial innovations from the West. But not at the expense of traditions and values. Family breakdowns and alcohol consumption are not permitted.
A major problem the Arab world has with accepting democracy, is the concept of a “division of church and state.” Thats not how they roll. Religious fundamentalists occupy significant positions in government, the military and education.
Engaging in Arab business requires an understanding of the culture. Here is insight into a couple differences.
• Friendship : In the West having a friend doesn’t require each party to rely on each other’s favors. In the Arab world it’s different. Arabs consider favors among friends very important. Arab friendship means never having to say, “No.”
An Arab may not be able to fulfill the requested favor, but he'll agree to it anyway. If you ask an Arab friend for a favor and he sounds noncommittal, that means no. If your friend says “Yes”, you have their respect. That doesn’t mean he or she will actually do the favor. In an Arab culture, the oral promise has its own value…..independent of whether the action took place.
• Privacy : Arabs feel good friends should see each other every couple days. If you say to an Arab friend “Hey, see you next week,” you better mean it. Otherwise, it could be taken as an insult. Arabs also have no problem asking personal questions such as how much you earn. Don’t take offense. I’m sure deep inside you’d like to know the same thing about your friends. Arabs ask.
The most important factor in doing business with Arabs is developing a good personal relationship. At the beginning of most business meetings time is spent inquiring on the well-being of family members. Let your host set the pace of getting down to business.
• Bring enough for everybody: If you brought your lunch to a meeting, make sure you have enough to pass around. Eating alone and not offering is considered rude. Even I agree with that one.
• Praise in public, criticize in private: Direct criticism of an Arab employee from a foreigner is taken as a personal insult. Do it in private.
• The Go-Between : If an Arab employee wishes to discuss a personal issue he may have a third-party approach you. This person is essentially acting as someone’s intermediary. Third person mediation is used so the employee can save face should his request be refused.
• With friends like these…: In business relationships you are either a friend or a stranger. A friend is treated with respect, generosity and honesty. These attributes are not required if you are a stranger.
If you feel you are treated rudely, don’t take offense. You are most likely considered a stranger and should not take it personally.
• Pride before facts: Arabs view the world through their own glasses. Even though the evidence may be to the contrary; they will rarely admit an error and be proven wrong.
• The passion: If your Arab host starts banging the table and yelling loudly don’t run for cover. It indicates the speaker’s sincerity and passion. Not anger.
An increasing number of countries with majority-Islamic populations have adopted Shariah law. This law implements Islamic ideals into everyday Arab business and personal life.
Industries most affected by this Islamic law include finance and banking. Shariah influences business in these ways:
• No interest can be charged on credit.
• Cooperation between businesses is more important than competition.
• Your company cannot deal in pork, alcohol, gambling, deceit or usury.
• A certain level of profits must be distributed to the poor. A tax known as zakat is used redistribute this wealth.
The degree to which Islamic law affects Arab business depends on the region. The most educated and affluent Islamic markets are Kuwait, UAE and Bahrain. This market has tastes that most resemble the West. Consumers prefer sophisticated products and Western brand products.
A basic guide to marketing products in Islamic countries are:
• Most marketing messages are aimed at men. A subtler message works with women. Focus on product information, not the sizzle.
• Stress modesty and value.
• Using advertising to appeal to the emotions, display of sexual images and female personalities is forbidden. Honesty is praised.
I guess you won't be seeing many Super Bowl ads in Saudi Arabia.
• Don’t focus on your product’s low sale price. That may arise questions as to whether the original price was too high.
Interestingly, some of the Gulf nation’s most successful businesses include franchises. Companies such as: Dunkin’ Donuts, Pizza Hut and Kentucky Fried Chicken are enjoying good success.
When it comes to selling your wares to Arabic countries, where the best places to start? The UAE, Kuwait, Saudi Arabia Qatar and Bahrain. These oil rich nations have a middle & upper class population of close to 12 million. As I noted earlier, fast food restaurants are doing well and so is retail.
These countries have an affluent and savvy consumer base. Products are evaluated by price and quality……not by how funny your ad is. Marketing is segregated by gender and your strategy must respect Islamic values.
As we all know, the weakening U.S. dollar is a boon to American exporters. In the past year from 2007 – 2008, exports to Saudi Arabia increased by 65%. I guess they like us after all.
Kuwait. Good ol’ Kuwait. Kuwait is one of the world’s wealthiest nations and a member of the WTO. Since 1991, the U.S. and UK have defended Kuwait. Most of its consumer goods are imported. The country has an interesting demographic because close to 60% of the nation are foreign workers Many Kuwaitis have high incomes, travel and buy the latest electronic gadgets.
Breaking into an Islamic market requires sensitivity in marketing and a good supply chain relationship. If you have the resources, it’s always good to get in on the ground floor.
Some Islamic nations will not welcoming Western products with open arms. But the ones that count………relatively speaking of course, are.
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