For a business looking to expand its operations internationally, the language barrier can be a difficult obstacle to overcome. Europe, for example, while a large market overall, is fractured into much smaller market segments by different languages. The countries of the Arabian Peninsula (including Bahrain, Oman, Qatar, Saudi Arabia, UAE and Yemen) and Egypt (in North Africa), being united by a common language - Arabic - do not face this problem. This fast-growing and very wealthy region is an excellent market for US-based organizations looking to take their business global.
With a population of approximately 157 million in 2007 that is slated to nearly double within the next forty years, the Middle East/North Africa (MENA) region is one of the fastest-growing single-language regions in the world. The people of this region have some of the highest per-capita incomes worldwide, with Qatar being the third-highest in the world at $84,833 and UAE (home to world business hub Dubai) not far behind at $38,108, according to the US Department of State. And with the MENA countries being home to a significant proportion of the world's oil and natural gas reserves, the region is slated to become even wealthier in the near future.
Best Vertical Markets
In general, the best vertical markets for export from the United States are in the technology and services sectors. In Yemen, the UAE, and Qatar, for example, Medical equipment and services, along with healthcare technology, were among the top markets.
The currencies of the MENA countries have stayed fairly stable versus the US dollar over the past few years and the general trend seems to be for no major fluctuations, since many of the currencies are pegged to the US Dollar. The Egyptian Pound, which is not pegged to the US Dollar, has been gaining steadily on the Dollar for the past two years. Apart from this currency stability, many Gulf countries have set 2010 as a target date for a single Gulf currency. These facts suggest a region where trade is simple, predictable, and profitable.
Regulatory and Tariff Landscape
The MENA region is one where trade is by-and-large free. Tariffs are generally low across the board, with duties on most items at 5%. However, with Islam being the prominent (and official) religion of many of the MENA countries, pork and pork products are banned, and alcohol and tobacco products generally have high (50-100%) tariffs on them. Other than these restrictions, however, there are few trade barriers, and exporting to the region is generally simple and inexpensive.
Online Marketing Opportunities
The MENA countries, according to Internet World Stats, have a collective online population of approximately 18.3 million, which represents an average of 22% penetration into the market and a 1,044% growth over the past seven years. Within this online population, Egypt and Saudi Arabia command 80% of the internet users, although the majority of the money is with the countries that make up the rest of the 20%. However, Egypt and Saudi Arabia are high-potential countries, and should propel the online growth of the region in the near future. This dichotomy creates within the MENA countries both an established and wealthy section as well as a large growth-oriented sector, which is optimum for conducting e-commerce or e-marketing campaigns in the region.
Online Language Preferences
The unifying link between these otherwise diverse countries is a shared common language - Arabic. According to Internet World Stats, Arabic is the seventh largest internet language, boasting almost 60 million users and representing approximately 4.2% of the entire internet population. However, Arabic content online represents only about 0.5% of global online content, which leads to a significant gap between supply and demand. To meet this demand for global online content and to reach the Arabic-speaking end-user, it is recommended that the global online marketer optimize at least some content in Arabic, and have an Arabic language landing-page.
Search Engine Profile
Search engines in the MENA region can be profiled as a “Big 3" - Google, Yahoo, and MSN Live. Across the board, these are the top three search engines in the region, although individual rankings differ from country to country. According to Alexa.com, while Google occupies the top spot in the UAE (home to trade powerhouse Dubai), Qatari internet users prefer Yahoo as their search engine. Thus, an organizing wishing to optimize its pages would need to submit their websites to all three search engines for maximum results.
The MENA region is a high growth, fairly wealthy region creating a synergistic effect for the countries that comprise it. United by the common language of Arabic, the Middle East and North Africa can become a vital and profitable cog in any organization's global expansion. While showing significant potential, MENA is still in its early growth stages. Therefore, Global eMarketer ranks the MENA region as a Tier II market for global online expansion. Still, organizations seeking to be ‘early entrants’ in the market would do well to give the Arabic-speaking MENA region strong consideration for their online marketing campaigns.
- With contributions from Amal Kumar
Amal Kumar is a Global Markets Research Analyst at Global eMarketer (GeM). GeM is an international business development and marketing consulting firm that helps business expand globally from preparation, to implementation through global online campaign management. For more information contact information[at]globalemarketer[dot]com, or visit our website at http://www.globalemarketer.com