Ripe for the picking

FOR companies looking into expanding in the Middle East, there are quick wins to be made. Three Middle East countries, Saudi Arabia, Qatar and the UAE present good opportunities for retailers according to the first annual RIPE Index1. Ranked 8th, 11th and 15th respectively, these countries rated high in infrastructure, supply-chain construction capability, project delivery, supporting legal framework, and business environment, making them conducive for companies looking to open outside of their home base.

“International expansion is the new battleground for retailers experiencing low growth in their domestic markets. Consumer appetite for Western brands in Asia makes these markets attractive, but not always easy to enter. Successful international expansion is about balancing the desirable with the doable. Much like a marriage, success is down to making a careful and committed choice, maintaining realistic expectations, and making plenty of adaptations along the way,” Colin Turner, head of Retail at EC Harris, said in a statement.

Couple this with the growing hospitality industry which, according to an Alpen Capital (ME) Limited report2, is expected to grow at 8.1% to USD 28.3 billion by 2016 (vs. USD 19.2 billion in 2011), the future looks bright indeed.

“The GCC hospitality sector is poised for a healthy growth owing to factors such as favourable economic conditions combined with infrastructure development, increased bids to host high profile global events and government support to the private sector. All these factors have contributed to the steady increase in tourist arrivals which in turn has facilitated the growth of the hospitality industry in the region,” said Sameena Ahmad, managing director at Alpen Capital.

Easy entry
The RIPE Index further emphasised the ease of entry for international companies through the presence of strong trading partners and franchise operators such as Majid Al-Futtaim, Al Tayer, the Landmark Group, Al Shaya and the Chaloub Group. These local partners enable international companies to move into the region with relatively low resource and capital requirements.

Al Shaya, for instance, is the largest single retailer in the Middle East with more than 2,400 outlets. In 2012, Alshaya expanded further with new partnerships that brought popular American brands to the UAE including The Cheesecake Factory (Dubai Mall), Texas Roadhouse (Dubai Mall) and IHOP Restaurant (Mall of the Emirates). For both The Cheesecake Factory and Texas Roadhouse, the Dubai openings are the first ventures in the international market; these were quickly followed by openings in Kuwait. IHOP Restaurant, meanwhile, is only the first in a 40-restaurant agreement between Alshaya and DineEquity, Inc., IHOP’s parent company, to open in Kuwait, Saudi Arabia, Jordan, Lebanon, Qatar, UAE, Oman, Bahrain and Egypt.

Mohammed Alshaya, executive chairman of M.H. Alshaya Co, said, “We are delighted to introduce these internationally acclaimed brands to new consumers in the Middle East and are very honoured to partner with each of the brand’s owners. We have launched some very special new brands into the region and it is fitting that they make their debut in what is now one of the Middle East’s largest and most exciting malls.”

Many UAE residents and tourists found that a visit to Dubai’s The Cheesecake Factory in August, just after its opening date, proved futile without reservations. “The Cheesecake Factory’s arrival in the Gulf has been overwhelmingly positive, reflecting our great potential in the region and affirming our decision to expand into the Middle East as part of our global expansion. Our reputation and brand aNike Air Max 98