#56- January 2017

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WWW.FINANCEMIDDLEEAST.NET ISSUE 56 I JANURY 2017

The past two years of studies suggest within the next four years, Sharjah will be the Middle East hub for start-ups.

–Sara Al Madani, Board Member, Sharjah Chamber of Commerce & Director, Rouge Couture

INSPIRATION IS EVERYWHERE

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ello and welcome to the first issue of 2017. We enter the new year featuring someone who knows all about fresh starts on our cover (Pg 20), Sara Al Madani, Board Member, Sharjah Chamber of Commerce & Director, Rouge Couture has been designing abayas since the age of 15. In 2013, through a poor business decision, she lost 11 years’ worth of work overnight and had to rebuild her business from the bottom up. As a board member of the Sharjah Chamber of Commerce and Industry, she is focused on creating a safe environment for SMEs to avoid making similar mistakes.

We take a look at the SME landscape from a wider perspective in our UAE country focus (Pg 24) which considers the country’s projected GDP growth and Government initiatives aimed at developing and supporting the sector in the short- and medium-term. Along this vein we take an in-depth look at the GCC VAT which will come into effect in a year and what this will mean for SMEs (Pg 32). For some smaller businesses registration for VAT will be voluntary, but contributing experts explain why they may want to consider doing it regardless.

While our country focus touches briefly on recruitment and job opportunities in the UAE in 2017, our third feature will look at how businesses can retain their top talent, given that business owners may not be able to offer pay raises in an effort to reduce spending (Pg 28).

One company that will not have to worry too much about its budget is this month’s case study, Deliveroo, which has recently raised over $500 million in funding (Pg 36). The British tech company came into Dubai a year ago and has firmly made its mark on the food delivery market. Anis Harb, General Manager, Deliveroo UAE talks about how a start-up can disrupt a mature market and thrive.

Another conversation regarding how SMEs and start-ups can compete against larger players took place for our Face time section (Pg 40). Abdulla Al Gurg, General Manager of the ESAG Group LLC said entrepreneurs have to create a product that adds value to consumers, in order to be successful. He discussed the larger role that VC firms and crowdfunding could play in financing start-ups since the UAE banks are unlikely to end their reluctance to lend to SMEs in the near future.

It would seem that the overall sentiment of 2017 is one of optimism, with plenty of opportunities for SMEs to grow, and long may it last!

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Jessica Combes Read my blog at: http://www.cpifinancial.net/blog/author/112/jessicacombes Follow us on Twitter: @FinanceMidEast and on Instagram: @finance_middle_east

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PUBLISHED BY

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24

COUNTRY FOCUS Here’s looking at UAE, kid

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FEATURE Wait, don’t go!

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FEATURE A taxing matter

Managing Editor GEORGINA ENZER georgina@cpifinancial.net Tel: +971 4 391 3728

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CASE STUDY Disrupted by Deliveroo

Chief Commercial Officer OMER HUSSAIN omer@cpifinancial.net Tel: +971 4 391 5419

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FACE TIME Treading water

OPINION Encouraging entrepreneurship

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FRANCHISE Covered in paint

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OPINION Connected coalition

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LEGAL FOCUS Estate planning for non-Muslim SME owners

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NEWS ANALYSIS SMEs receiver further support from UAE Government FAST FACTS Careem closes first tranche in $500 million funding round TOP TIPS Five tips for an organised new year OPINION The exit: a seller’s perspective

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CHALK TALK Mohammed Berro

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CEO CHAT Inspiration is everywhere

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Editors JESSICA COMBES jessica@cpifinancial.net Tel: +971 4 364 2024 SARAH OWERMOHLE sarah@cpifinancial.net Tel: +971 4 375 2527

START-UP Customise my crib TECH FOCUS Fuelling personalisation

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BEHIND THE SCENES Behind the scenes: Stevi Lowmass

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WILLIAM MULLALLY william@cpifinancial.net Tel: +971 4 391 3718 NABILAH ANNUAR nabilah.annuar@ cpifinancial.net Tel: +971 4 391 3726 London Bureau ISLA MACFARLANE isla@cpifinancial.net Tel: +44 7857 429476

LAST WORD Fighting fraud

Contract Publishing Editor SARAH SPENDIFF sarah.spendiff@ cpifinancial.net Tel: +971 4 391 3729

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JANUARY 2017

Senior Designer FLORANTE MAGSAKAY florante@cpifinancial.net

WWW.FINANCEMIDDLEEAST.NET ISSUE 56 I JANURY 2017

INSPIRATION IS EVERYWHERE

The past two years of studies suggest within the next four years, Sharjah will be the Middle East hub for start-ups.

–Sara Al Madani, Board Member, Sharjah Chamber of Commerce & Director, Rouge Couture

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NEWS ANALYSIS

SMEs receives further support from UAE Government Not long after the UAE’s bankruptcy law was passed, new legislation has been issued to further support the SME sector

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ntrepreneurs from the Gulf Cooperation Council countries will be treated the same as Emiratis, and will be licenced as members as per DSME terms and conditions, according to a new law that was put in place in mid-November 2016 by His Highness Sheikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai. Law No. 16 defines policies and strategic plans for SMEs in Dubai.

All government bodies, institutions and companies that are owned by the Dubai Government, or in which the Government’s stake exceeds 25 per cent, will be obliged to exempt DSMElicenced members from fees charged and add them to the aforementioned bodies’ suppliers list.

“The amendment is a further example of Dubai’s commitment to achieving greater diversification and investment in the UAE by supporting entrepreneurs and SMEs. Like the new Insolvency Law, it is a step toward making the UAE an even more attractive place to do business,” said Rebecca Copley, Head of Financial Services

Disputes and Investigations for the Middle East, Eversheds.

Dubai SME will also coordinate with banks and financial institutions to facilitate the availability of suitable financing options for Dubai SME members, as well as licencing members as per approved terms and conditions.

Licenced members will be expected to pay an annual fee of AED 1,000 during the first three years, and a AED 2,000 fee will apply during the fourth and fifth years of the licence.

“Recent amendments to the law on Dubai Small and Medium Enterprises (DSME) bears witness to how the UAE is moving swiftly to shield businesses in its SME sector from potential failure, as the region faces a financial downturn triggered by low oil prices,” said Saad Maniar, Managing Partner of Crowe Horwath UAE. Many companies have been left in financial distress, a problem exacerbated by late payments from dealers and suppliers.

These government bodies will also allocate 10 per cent of sales, as well as five per cent of commercial spaces in malls to DSME members, with selections

regarding these allocations being made as per criteria set by DSME. Finally, priority will also be given for bids or offers submitted by members if the value of the bid does not exceed five per cent of the value of the best tabled bid. Members will also receive a 20 per cent minimum discount on their tenancy contracts during the first three years.

All government bodies, institutions and companies that are owned by the Dubai Government, or in which the Government’s stake exceeds 25 per cent, will be obliged to exempt DSMElicenced members from fees charged and add them to the aforementioned bodies’ suppliers list.

New SMEs suffer from a high failure rate, with statistics showing that 99 per cent of start-ups fail in their first five years, and no doubt these decrees will offer the much needed protection, as the SME sector is an important vehicle to address the challenges of job creation, sustainable economic growth and the overall stimulation of economic development in the country, said David Cafferty, Director, Crowe Horwath.

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DUBAI SME AND AL TAMIMI & SHARJAH CHAMBER COMPANY SUPPORT START-UPS INITIATES STRATEGY TO SUPPORT ENTREPRENEURSHIP Dubai SME, the agency of the Department of Economic Development mandated to develop the Emirate’s small and medium enterprise (SME) sector, and Al Tamimi & Company, one of the largest law firms in the Middle East, have signed a memorandum of understanding (MoU) to support entrepreneurial innovations and patents.

The MoU reflects both parties’ commitment to achieving the UAE’s vision to improve the SME sector. The Hamdan Innovation Incubator (Hi2) will co-ordinate with Al Tamimi & Company to patent innovations of registered members and provide legal services to protect their intellectual property.

“Dubai SME’s Hamdan Innovation Incubator is focussed on enabling UAE youth to invest their efforts and creativity in innovative ventures, grooming a generation of successful entrepreneurs. This initiative is designed to protect intellectual property,” said Saeed Matar Al Marri, Deputy CEO, Dubai SME. Hi2 was launched in September 2014 under the patronage of His Highness Hamdan Bin Mohammed Bin Rashid Al Maktoum, Crown Prince and Chairman of the Executive Council of Dubai.

The Sharjah Chamber of Commerce and Industry (SCCI) organised two brainstorming sessions in midDecember 2016 aimed at supporting efforts to initiate a new strategy focusing on entrepreneurship and innovation, with the goal of boosting its performance and services.

The plan focuses on sustainable development, in line with the UAE Vision 2021, and the Sharjah Strategy, and come in response to the directives extended by His Highness Sheikh Dr Sultan bin Mohammed Al Qasimi, Member of the Supreme Council, Ruler of Sharjah, whose goal is to transform the Emirate into a hub for economic activity.

“The brainstorming sessions reflect the management’s commitment to developing a modern and comprehensive strategy for the coming years, with the goal of enhancing our role in supporting the business community and offering innovative solutions, as well as focusing on human resources development,” said HE Khaled bin Butti Al Hajri, Director General of SCCI. He added that the new strategy will focus on support for small and medium enterprises and entrepreneurship.

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FAST FACTS

CAREEM CLOSES FIRST TRANCHE IN $500 MILLION FUNDING ROUND Careem, a leading ride-hailing service in the MENA region, announced a first close in its $500 million funding round. The investment of $350 million is co-led by global internet services leader Rakuten, Inc., headquartered in Japan, and Saudi Telecom Company (STC), the largest telecom operator in the Middle East.

Rakuten executive and head of ridesharing and fintech investments, Oskar Mielczarek de la Miel, and an STC Group executive will also join Careem’s Board of Directors.

The fundraise, supported by Credit Suisse, is one of the largest for a technology company in the Middle East’s history, and the funds will scale up Careem’s transport services in existing and new markets, accelerate innovation across its platform of high-frequency transactions, and help Careem achieve its goal of creating one million jobs in the region by 2018.

“We are inspired and humbled to work with world class strategic partners like Rakuten and STC. They not only bring significant institutional backing for Careem’s new horizons, but also global technology leadership and deep local experience, bringing us closer to achieving our mission of improving the lives of everyone in the region,” said Mudassir Sheikha, co-founder and CEO of Careem.

The investment directly aligns with Rakuten’s vision for global innovation as Careem has demonstrated its ability to scale to one of the largest shared economy platforms in the region, and to accelerate the adoption of new transit solutions, said de la Miel.

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Expo 2020 Dubai, the first mega-event in the region, offers an opportunity for designers, manufacturers and retailers to reach a global audience of 25 million people in one place.

From the beginning of 2017, tenders will be accepted for over 5,000 licensed products, which will be sold at a dedicated 3,000 square-metre ‘Superstore of the Future’, the flagship outlet of a wider onsite retail network.

Additional Expo 2020 retail outlets will be opened across the UAE in the run up to the mega-event, along with a dedicated online store.

Organisers require around 70 official licensees, of which ideally one third will be SMEs, in line with Expo’s pledge to allocate more than 20 per cent of the mega-event’s total direct and indirect spend for SMEs. “Expo 2020 Dubai will welcome 25 million visitors. Each and every one of them want to take home a unique souvenir to remind them of their experience in Dubai. We are looking for designers, craftsmen, and artisans to work with us to create a unique range of licensed products for visitors to Dubai in the lead up to and during Expo 2020. It is a significant opportunity, and we want our visitors to be able to take something home as a memento of Expo 2020 Dubai, whether it’s a t-shirt, artisanal food products, or handcrafted traditional collectibles. We’re looking for an assortment of products that appeal to all visitors, at a range of price points,” said Gillian Hamburger, Vice President–Commercial at Expo 2020 Dubai.

YouTube announced a joint effort with Dubai Studio City to bring an incubator space giving YouTube creators the tools and guidance to enable them to innovate and experiment with content in 2017.

This collaboration, YouTube Space, will grant the MENA region’s most talented YouTube content creators free access to high-end audio, visual and editing equipment, in addition to training programs, workshops and courses.

Since the first Space was launched in 2012, over 150,000 people globally have attended over 19,000 hours of workshops and over 15,000 videos have been created; garnering over 165 million hours of viewing time. This space will enable YouTubers to make original videos, collaborate with other channels, share experiences, network, attend workshops/ events, and get invaluable handson experience with industry-leading production equipment and resources, according to Lance Podell, the Director and Global Head of YouTube Spaces.

“The MENA region has one of the world’s most vibrant YouTube communities. Talented creators are producing content for passionate audiences in a region that comes in second in the world after the U.S in terms of watch time. This collaboration with Dubai Studio City will help us support this incredible community of YouTube creators as well as continue to boost the growth of Arabic content on the web. We are happy to have our first Space in Dubai, a place of vibrant creativity from fashion, to media and advertising. YouTube is a home for all this content,” said Podell.

Malek Al Malek, CEO of TECOM Business Parks, added that the partnership reflects Dubai’s ability to attract the strongest content platforms to the UAE, and the aim is to leverage users’ shared experience in creating an enabling environment for the nurturing of a unique talent pool, and to empower them to generate inspiring and engaging content.

FAST FACTS

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EXPO 2020 DUBAI TO PARTNER WITH 70 OFFICIAL PRODUCT LICENSEES

YOUTUBE SPACE TO OPEN IN DUBAI STUDIO CITY

ENTS ENTH SID RIVERLE USIA E SS C ST E R UT D AR IC S UA ABO

58%

ARE ENTHUSIASTIC ABOUT SELF-DRIVING CARS

43%

BELIEVE THEY WILL REDUCE TRAFFIC CONGESTION

43%

BELIEVE THEY ARE SAFE IN COMPARISON TO STANDARD CARS

76%

CONSIDER IT IMPORTANT TO RETAIN MANUAL CONTROL IN THESE CARS

72%

WOULD PREFER TO HAVE SEPARATE ROADS OR LANES FOR SELF-DRIVING CARS Source: : YouGov’s online research panel who are residents of the UAE

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TOP TIPS

Five tips for an organised new year

Shelina Jokhiya, Managing Director, Decluttrme, gives tips on how to kick off a clutter-free 2017

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NOT WORt bKeiINnGg IS T A H W T U O E R year star 1. FIGU weeks in the

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3. GET RID OF

Just do it. Y THE EMPTY BOXES Movers will ou do not need them . bri when the ti ng packaging materia m l e c o m es an needs the iP hone or Ga d nobody laxy a few days of using th box after e phone.

4. GIVE YOURSELF TIME

Do not pressure yourself to do everything at once. It will not help you finish the tasks, especially if you are not feeling motivated.

Create to-do lists, noting which parts of the to-do list should be in your ‘next action’ list or ‘someday/maybe’ list. Work through the ‘next action’ list, one item at a time. Each time you finish a task tick it off. The feeling of finishing a task is great and will motivate you to move onto the next.

5. ORGANISE WHAT IS LEFT

Create systems for all your items so that you know where they are at all times. For example, the top drawer of your desk could include stationery that you use on a regular basis (hole puncher, stapler, post it notes, scissors). The in-tray can be separated for stuff that has come in, is pending, and needs filing.

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2016

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OPINION

The exit: a seller’s perspective Selling a business does not have to be difficult, provided the right steps are followed, advises Bobby Rhakit, CEO, Inside Consulting Partners

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he perfect storm is brewing and capital is becoming dangerously scarce for the UAE SME market.

Credit is drying up, businesses are ill-equipped for capital raising, and entrepreneurial expectations for an exit are unrealistic. This is no longer the world of extraordinary company valuations.

That said, the UAE is still a fantastic natural setting for start-up companies.

There are an estimated 300,000 SMEs that contribute to more than 60 per cent to the UAE’s GDP, providing more than 42 per cent of the jobs in the country. This is a result of great logistics, good access to growing markets, and reasonably priced intellectual capital.

In addition, there are a number of initiatives for the local population that foster entrepreneurship, such as the UAE’s Khalifa Fund for Enterprise Development.

In spite of these advantages, many of the historic SME success stories are starting to falter. The root causes can be attributed to inadequate funding from banks and private sources, stretched cash-flow management, complacency, lack of planning, and strategic partnerships that never cultivated. In addition, the recent geopolitical issues in the region are also starting to affect the growth in many of

the primary industries including oil and gas, consumer retail and hospitality.

The culmination of these events has created a number of opportunities for buyers in the market who either want to grow through acquisition or gain a strong foothold in the UAE. Conversely, for sellers this has created a difficult scenario where options for an exit become more limited and capital raising becomes close to impossible.

There do seem to be a number of opportunities for sellers. However, for the expat population finding these types of opportunities is not readily accessible. Sometimes these opportunities become further clouded when the business owners become short-sighted and complacent in their growth strategies. This is where intellectual resources and strategic thinking becomes imperative to foster the next stage in the growth cycle. All too often owners sell their companies for far less than what they’d hoped for because they hadn’t prepared for their exit.

There are currently two trends in the market: successful firms are seeking an exit because of the changing economic climate, and SMEs are seeking capital for both growth and survival.

There is a suggested framework for sellers to prepare themselves better in

this environment and become more resilient to external forces that are driving down company valuations. In the case of the first trend, exiting is a difficult process and time consuming for the owner, and there are usually two types of exits. In the first instance, a successful firm has built a fantastic reputation but has no succession or knowledge to take the company to the next growth stage, and the owners are seeking an exit at what they perceive is the company’s highest valuation point.

The second exit is usually due to the conditions of the firm’s environment radically changing. For those reasons, the effort to continue to grow becomes more difficult and the cost-to-exit opportunity becomes attractive. As such, business owners are advised to consider the following suggestions to ensure the highest valuation and to ease an exit by the owner. Often companies that have been in existence for a period of less than three years are at a significant disadvantage.

Documentation is critical and can be exhaustive, so preparation is essential. The following are some of the key documents that should be available: at least three years of audited financials; a non-disclosure confidentiality agreement; accounts payable and accounts receivables

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All too often owners sell their companies for far less than what they’d hoped for because they hadn’t prepared for their exit.”

–Bobby Rhakit, CEO, Inside Consulting Partners

ageing reports; inventory list with value detail; list of fixtures, furnishings and equipment with value detail; supplier and distributor contracts; client list and major client contracts; staffing list with hire dates and salaries, as well as employment agreements; business formation documents which include business licences, certifications and registrations; building or office lease; equipment leases and maintenance agreements; professional certificates; insurance policies; copies proving ownership of patents, trademarks and other intellectual property, outstanding loan agreements and description of liens; product/service descriptions and price lists; employment policy manual; and business procedures manual.

Be thoroughly transparent by including the vision of the company, and work with an advisor that understands the sector and has access to buy-side clients. The mandate should always be exclusive to prevent the ‘shopping of the deal’ phenomena which reduces the credibility of the potential transaction. The advisor should also provide a valuation range based on recent transactions in the sector. Disclosure is very important at this stage. Any lumpiness in the financial statements can scare buyers or lead to a low valuation.

A good lawyer is also a necessary party, especially during the negotiation process. In many circumstances lawyers and accountants try to provide a ‘one-stop solution.’ We recommend staying away from these types of organisations. Ask yourself if you would allow a GP doctor to operate on you. Each part of the transaction is specialised therefore needs the adequate attention.

Any transaction has number of key elements. Understanding the process is essential in the exit process can be broken down into six stages.

The first stage is to understand the ‘exit’ options and break down of potential buyers. Next, the business owner has to engage an advisor who has access to the buy-side. A good advisor will work with the business owner to understand the selling requirements, the range of valuation expectations, and strategic goals.

The mandate should be preferably exclusive to avoid the ‘shopping of the deal phenomena’.

The third stage is for preparation.

Sloppy preparation affects the buyer’s comfort level. At this stage documentation needs to be prepared and accessible in a professional format.

From there, the agent and business owner can shortlist buyers.

Business owners are advised to enter the negotiated process with only one highly-targeted buyer.

This strategy is high-risk but can expedient the transaction. At this point non-disclosure agreements (NDA) should be signed with the agent, and a summary of the operations presented to the buyer.

The principals should meet faceto-face at a neutral setting. The owner should also assess the seriousness of the buyer and a good advisor should be able to pre-qualify the potential acquirer. The selling price should also be determined at this stage.

Doing due diligence and creating the transaction structure is the next step. There are number of considerations that become apparent at the end of this process, such as earn-outs and employee preservation. At this point a lawyer is engaged and a letter of intent is established.

The final stage is closing the sale and starting the business transition. The purchase agreement is the definitive document outlining the terms of the sale. The transition period typically involves a period of cooperation during which the seller will assist the buyer in the transition.

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OPINION

Encouraging entrepreneurship Jarmo Kotilaine, Chief Economic Advisor, Bahrain Economic Development Board, discusses the economic potential of supporting SMEs in the GCC

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conomic diversification has long been recognised as a central priority by GCC governments, and the urgency of this task has been further underscored by the current oil cycle. With a young population and a steady influx of new labour market entrants, creating more quality jobs will have to be a central policy priority for years to come. The global experience has highlighted the critical role of entrepreneurship in meeting such aspirations. SMEs can not only offer careers for their founders but they can, in turn, also employ others. As small organisations, they tend to be more flexible and innovative at a time when technological progress is levelling the playing field and opening up new opportunities at an accelerating pace. In most advanced economies, SMEs are systematically significant, even dominant, as sources of GDP, employment, and innovation.

The good news is that the Gulf societies are increasingly receptive to the idea of entrepreneurship and

cognisant of its economic potential.

For example, a recent survey by Ernst & Young found that 70 per cent of young Bahrainis were interested in the idea of starting their own business, twice as many as anywhere else in the Gulf. More and more young people see entrepreneurship as an opportunity to take charge of their future and to unleash their creative potential. This is partly reflective of years of awareness building, including paying closer attention to the benefits of entrepreneurship in educational curricula. But, it is also a reality driven by a growing community of role models– successful entrepreneurs who have ‘made it’.

While a range of policy and institutional solutions have been, and are continuing to be devised for SMEs in the Gulf, the ecosystem remains very much a work in progress. In particular, regional entrepreneurs suffer from limited access to appropriate funding solutions in a highly bank-centric financial system.

The standard offering of conventional bank loans backed up by substantial collateral tends to be beyond the abilities of small start-ups to access.

Various government funds have been set up to ease the problem but there is a growing recognition that more attention is needed for alternative funding options. These include angel investors and venture capital banks, some of which have indeed begun to emerge. An important initiative in this space is the Bahrain Investment Market which is pioneered by Bahrain Bourse. This platform provides SMEs the opportunity to register their company in the stock exchange to access funding, which should in turn stimulate other funding solutions by creating a credible exit option for investors.

Regulation tends to be identified as another challenge facing new businesses even as all the GCC governments have made considerable strides toward improving the overall business environment over the last decade. Nonetheless, an even

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In most advanced economies, SMEs are systematically significant, even dominant, as sources of GDP, employment, and innovation.”

–Jarmo Kotilaine, Chief Economic Advisor, Bahrain Economic Development Board

greater focus is needed on the specific requirements of SMEs and especially genuinely innovative, growth-oriented start-ups. While the region offers an attractive fiscal environment, more can be done to ease company registration. Similarly, true risk-taking and entrepreneurship requires an insolvency framework that does not penalise failure and makes it easy to wind up corporate structures when necessary.

Innovative entrepreneurship in today’s world is unlikely to reach its full potential in isolation. New idea generation and development often happens in cluster facilities that house communities of innovators and offer attractive terms and resources for young companies.

While multinationals and large corporates tend to favour prime locations and long lease terms, startups are more likely to value flexibility and the ability to manage costs, which can be highly variable. Perhaps the best known examples of mature, successful entrepreneurship clusters

internationally include facilities in Silicon Valley or East London.

Important steps have been taken toward creating targeted business incubators around the Gulf region while inviting business accelerators to complement the emerging ecosystem. The development of a skilled local workforce is important for all private enterprise, including growth-oriented SMEs moving beyond their initial stages.

Success in driving the entrepreneurship agenda is not just important for job creation and diversification; it is also needed for a more fundamental overhaul of the region’s economic model. In recent decades, economic growth in the GCC has been primarily extensive in nature: based on increased inputs, rather than increased efficiency or productivity. However sustained growth in living standards will necessitate a great focus on productivity–the more efficient utilisation of inputs, whether through better organisation, management,

or innovation. This is imperative in the face of the new fiscal realities, but it is also a precondition of competitiveness in today’s world of technological change and rapidly evolving tastes. Therefore, finding effective ways to support SMEs and entrepreneurs, who globally serve as the key source and guarantor of nimbleness, will be very important to for the prospects of the GCC economies.

If the story of the rapid growth in the Gulf during recent decades has mainly been a story of a plentiful supply of labour, energy and capital supported by high commodity prices, the next few decades will be the story of efficient, innovative businesses and growth in productivity. Only through fully unleashing its entrepreneurial energy, can the region realise its full economic potential and its longstanding goal of private sector-led growth and global competitiveness. Its main asset in rising to this challenge will be its young population and inviting business environment.

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OPINION

Connected coalition CEO, Bebuzzd, Abdul Nazeer, asks how brand loyalty can increase consumer engagement in our rapidly-evolving digital world

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n the exclusive world of brand loyalty programmes, small and medium businesses work hard to keep their customers and their wallets secure under one roof. But as loyalty strategies continue to evolve, brand marketers need to rethink their customer engagement efforts based on brand loyalty. There is a growing trend among many SME businesses to adopt a ‘rising tide lifts all ships’ approach by becoming part of coalition loyalty programmes. Such tactics have shown success internationally and are rapidly being used in the mainstream, with brands starting to team up with like-minded businesses from a wide range of industries to provide a wider array of incentives and benefits to their customers.

The value proposition of coalition loyalty programmes is its flexibility, which is not commonly practiced in the brand loyalty world. Under the coalition programme, consumers who buy from one company receive rewards for those purchases and can redeem the earned points within the loyalty network. This leeway or freedom to

monetise within a range of brands may seem to counter the basic principle of loyalty where customers are traditionally rewarded only for money spent with one brand. This shift in loyalty is now changing, thanks to the growing adoption of a more holistic and inclusive approach that recognises strength in numbers and value in diversification.

Partnering with companies that complement their brand offerings to help broaden the scope and reach of a loyalty platform is nothing new. Coalition loyalty goes beyond simply trying to accommodate the different set of needs of audiences.

Participants in a coalition loyalty programme usually come from diverse industries that often have little customer overlap and include brands from many verticals. This kind of diversification solves a frequency problem for brands that do not see their customers often. In addition, it solves a brand affinity problem for companies and products that are seen as transactional, or elicit little emotional attachment.

Adidas, for example, is a company with one of the strongest brands in the world. It may not experience any issues with loyalty, but it may have trouble with frequency of purchases.

Realistically, most customers only make a purchase once or twice a year due to cost and necessity. On the other hand, a brand like Organic Press Juice might have the same customer visit to one of its shops dozens of times a year. If Adidas and Organic Press Juice were part of a coalition, the frequency with which customers would earn rewards for their purchases at Organic Press Juice would result in driving them to Adidas sooner than they might have otherwise. In return, Organic Press Juice would receive the associative bump by aligning with a leading global brand and encourage continued purchases to earn rewards to redeem at Adidas. Additionally, an online component that allows people to shop via the internet and would allow consumers to continue earning rewards.

While coalition programmes are revolutionary in how they frame

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SMEs that join coalition loyalty programmes may find that in the increasingly digital world, there are more valued-added activities and benefits that they can offer other than rewarding loyal consumers.”

– Abdul Nazeer, CEO, Bebuzzd

loyalty as a whole, they follow the same ‘points for purchases’ model as a reward scheme. There are many more benefits for companies that extend beyond purchases alone. SMEs that join coalition loyalty programmes may find that in the increasingly digital world, there are more valued-added activities and benefits that they can offer other than rewarding loyal consumers.

SMEs could see an increase social and online activity. Loyalty programme administrators can look into building up features which can incentivise users through relevant social media activities, web browsing, interaction with branded content, or providing options for product reviews and feedback, which could result in increased direct interaction with each brand.

SMEs could tie incentives to data by taking advantage of users’ information and their buying habits by tying incentives to geographically specific data or by personalising offers and rewards based on past purchases. This makes incentives

more relevant, timely, and valuable to audiences, pushing coalitions to provide a truly multichannel, holistic experience that improves customers' lives.

By sticking strictly with the traditional points-for-purchase model, brands are losing huge engagement opportunities. Coalition programmes that integrate new points-for-action strategies are a step ahead of other loyalty programmes.

Participating brands should expand to the present-day multichannel approach of reward system where consumers are continuously engaged to maximise their effectiveness and reach.

Consumers are moving at pace with the rapid evolution in digital technologies. Thus, it pays for SME businesses looking to capitalise the benefits of coalition loyalty programmes to look for these value propositions when partnering with other brands to ensure their presence is constantly visible to target consumers.

CUSTOMER BEHAVIOUR IN THE UAE 100% would recommend a brand they are devoted to.

79% would buy more if they were better rewarded.

73% would buy more if retailers used their data to understand their customers’ needs better.

71% would buy more if retailers treated them with more respect.

62% would buy more if they had greater trust in the brands.

68% would buy more if brands communicated with them better.

Source: International Customer Loyalty Programmes Ltd (ICLP)

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LEGAL FOCUS

Estate planning for non-Muslim SME owners Sean Hird, Director, DIFC Wills & Probate Registry, discusses how foreign-owned SME business owners in Dubai can secure the future of their businesses

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ucking the trend of weak oil prices and the relatively volatile economic environment, more than 22,000 small and medium-sized businesses (SME) were established in Dubai in 2015. According to Dubai SME, part of the Department of Economic Development, this is approximately 18 per cent more than compared to the number of SMEs registered in 2014.

The SME sector accounts for a major share of the net economic output of Dubai with mid-sized businesses contributing to about 17 per cent of the total value added to the economy of Dubai. Small enterprises make up about 14 per cent and micro-enterprises approximately eight per cent. In the trade sector alone, SMEs account for 47 per cent of the total value added while the respective share in the service sector is 41 per cent and 13 per cent in the manufacturing sector.

Over the past few years, the Dubai government has put in a considerable amount of effort into supporting and encouraging the development of SMEs which are seen as the key to sustainable economic development. By supporting the establishment of the DIFC Wills & Probate Registry (W&PR) to offer a

service to help secure the assets of non-Muslim expats investing in Dubai, the Government is sending out a clear message to foreign-owned SMEs that in the event of a death, appropriate estate planning is as important as the investment itself.

THE CHALLENGE

While many praise the development of SMEs in Dubai as a great opportunity for expats, there is still a low level of awareness about some of the challenges faced by the families, and indeed shareholders and employees of non-Muslim expat business owners in case of their demise.

If you own a business in Dubai, or if you own shares in a business in Dubai, did you ever ask yourself what will happen to your business if you pass away? Or who inherits your shares and how will the business continue when you are no longer here to take care of it?

And there are also more immediate problems with potentially ruinous consequences. Upon the death of a shareholder, the company bank accounts could be frozen immediately, even if they are in a jointly held business, ultimately affecting the company’s authorisation matrix and

potentially causing significant delays to employees receiving their salaries.

Many expats assume that the law of their home country would automatically apply to all their assets, including their business in the UAE, in the event of their death. However, in the absence of a will registered with the DIFC W&PR, it is Shari’ah law with its fixed beneficial entitlement provisions that is likely to govern the distribution of the deceased’s assets.

Even if an individual creates a will in accordance with their home country law, and has this translated into Arabic and stamped by a UAE Notary Public, it may still prove challenging for the Dubai Courts of First Instance to process and approve its provisions.

In such cases, the matter is referred to a higher Court which can lead to considerable delays–potentially years–and additional costs. During that period of uncertainty the business could be severely affected.

A major concern of any business owner in Dubai is that in not having a registered will, the default provisions of Shari'ah law would prevent the business and its assets from going to the intended beneficiaries, and/or in the intended proportions. As with any business, an unintended fragmentation

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Many expats assume that the law of their home country would automatically apply to all their assets, including their business in the UAE, in the event of their death.”

–Sean Hird, Director, DIFC Wills & Probate Registry

of a major block of shares could be detrimental, particularly as it could create new dynamics and tensions at both the board and shareholder level.

SAFEGUARDING BUSINESS

Part of the investment consideration for anyone thinking about starting their own business should be about where the investment goes if they pass away. If a business is a major part of a long-term investment portfolio then there is a real need to think about succession planning and securing the legacy of that business and its operational continuity.

Once someone has registered their will with DIFC W&PR they can rest assured that their wishes will be respected and upheld. They can take comfort that their relatives and beneficiaries will not be drawn into the expensive, complexity and drawn-out process of enforcing a foreign will in the Dubai Courts. By opting for a DIFC W&PR compliant will they have, by doing so, exercised their right under UAE law to choose their home country inheritance arrangements in preference to the application of Shari'ah law, an election that will give reassurance to not only to the chosen beneficiaries but also to business partners and the deceased’s employees.

The Registry has a set of simple and standardised rules to guide lawyers in drafting registrable wills and a clear set of procedures for their registration. The rules and procedures were designed with a view of not only making the whole process fast and efficient but also to reduce the potential for future disputes and challenges. Registration appointments are usually completed in one hour during which time the provisions of the will are reviewed by a Registration Officer who is also there to answer questions about the rules and procedures.

Should a person subsequently wish to modify their will, they are required to return to the DIFC W&PR where the updated will would be re-registered.

This is to avoid a problem frequently seen in other jurisdictions where the intentions of the deceased are scattered across numerous documents which are intended to link and dovetail together. In our system, there is only ever one, definitive copy of a will that is encrypted and stored on our secure server, avoiding the risk of a crucial document being mislaid or tampered with.

When someone does pass away, DIFC W&PR collates the relevant

paperwork, such as the death certificate and powers of attorney, and passes this over to the DIFC Courts where a case file is opened. Once the paperwork is reviewed and found to be in good order the next step is for the DIFC courts to issue a Probate Order.

The Probate Order then empowers the executor named in the will to fulfil the wishes of the deceased.

To ease the burden of will registration fees, DIFC W&PR has partnered with leading national and international banks to offer easy, zero per cent, payment plans to customers for periods of up to 12 months. We recognised that some people would want to spread the cost of their registration fees over a period of time and we responded to that. These banking partnerships are further evidence of the support that we are getting within Dubai for our service.

DIFC W&PR currently processes around 30 wills per week with more than 1,700 registered as of November 2016. As the non-Muslim population of Dubai continues to grow, and business owners are being made more aware of the complexities involved in estate planning, we will be kept very busy securing the legacy of our country’s SMEs.

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CHALK TALK

MOHAMMED BERRO The Partner at Peppers & Rogers Group says banks need to transform their customer experiences in order to stay relevant

I

was French, educated in Beirut, and after high school I was selected to study in the US on a scholarship.

When I went to the US I did not know much English. When I arrived in the US I studied English with a group of students at the language institute at the University of North Texas. Two semesters later I entered college in 1984 and I did not know what I wanted to study.

I always thought a computer was this big machine, from a movie or cartoon. I decided to study computer science for my Bachelor’s degree and the same for my Master’s degree.

When I graduated, I had an opportunity to work in the Middle East with Arthur Anderson–one of the big four consultancy firms at the time.

They had a very big presence in Kuwait. I came with them as a

consultant during the time that Kuwait was liberated. They had a project to run the finance department in a Kuwaiti oil company. There were about 120 people from Arthur Anderson offices around the world.

Although I was good at working with computers, I’m more of a people person. I like innovations and I started feeling that is where my passion was. My managers realised I have an ability to

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think conceptually. Once the oil project finished, we had another project for the National Bank of Kuwait. That is when I took my first step into banking and to financial services.

We were overhauling and re-engineering the credit process in National Bank of Kuwait. We were streamlining the process to make it more efficient and less costly, and to reduce the time for application approval from 60 days to 45 days.

We used technology to automate the work flow.

I was invited to join the National Bank of Kuwait. I had to build the business process engineering department to start re-engineering the bank. I always wanted to look beyond how typical business is done; I tried to make change happen. I also had the opportunity of practicing and excelling and helping people change. With a small budget and some time, you can change any system you want.

In 2003 Arab Bank approached me to help set up their global retail banking, making me responsible for all the retail operations. However, Arab Bank is a very conservative bank, so it was a challenge to update the brand, the public’s perception, our product and services, the way the branches looked, as well as the operating model. Imagine trying to change all of that in this very old bank across all these areas, with people who are happy to continue the way have been operating.

I was able to change the logo and colours of the bank from green to blue. It is not only about changing a logo; I had to change their mindset as well. I was asked if I would change the flag of my country, because the logo is the equivalent of the flag of the bank.

This is where I discovered what I call the “Ripening Theory”. Sometimes you have to wait for things to ripen. I wasn’t the CEO and I wasn’t on the board, and

I was not the decision maker, so I had to work vertically, horizontally, diagonally to get that change across. So now every time I see the blue logo, I think ‘That was me.’

I received a call from someone who said they were opening a new bank in the UAE and I was invited for a meeting. The opportunity was interesting from two perspectives; it was to establish a new bank from scratch, and it was a huge step for someone like me to become a CEO of a bank.

I arrived in the UAE in February 2008. I sat in a meeting room with about 20 people. The logo and the colour had been selected and we needed to open Al Hilal Bank by June of that year. We had 95 working days to open the bank. That included hiring the staff, writing up and implementing policies, ordering stationery, and all the forms for the bank. That was the easy part.

The hard part was hiring people from within the banking community.

In every meeting imagine everyone saying that when they were at bank X, they used to do things a certain way. If you have 50 people with about 20 backgrounds, the challenge is to create that one culture of the company, which I managed and it is something I am very proud of.

People like to be heard and appreciated; this is a reality. We would have a weekly meeting with 12 people in the bank, selected at random, from a teller to an executive.

I would just sit with them in a meeting room and I would hear feedback from them about their work or challenges.

In turn, I would tell them where the bank is heading. This made them feel appreciated and that they were part of the bank.

In the beginning, when the bank was in a smaller building, I used to walk around it every day to talk to the staff. It was not only helpful to

me as the CEO to understand what’s happening, but it was also helpful for them because they felt appreciated.

The staff would comment how they had been with another bank for 15 years and did not even know what the CEO looks like.

The staff came to love Al Hilal.

Everybody understood where we were going and they became proud of what we were building. I used to tell them we can build the iPhone of the banks.

No one can argue that the iPhone has redefined how communication is done.

We wanted to redefine how banking could be done. It is an Islamic bank and there was also this perception that Islamic banks are dull. We were able to create a bank that was fresh and modern. The colour is orange and we even had our own citrus fragrance created for our branches. Consumers liked it and they recognised it. These little innovations made our staff proud to work there.

I left mid-July 2015 to join Peppers & Rogers Group, where I can bring this passion to our team.

There is a new breed of consumers coming. These are people raised in a digital era, wanting things quickly and being able to do anything any time.

To survive the future, banks have to adapt to this new breed of consumer.

This is an opportunity for Pepper & Rogers to help banks transform themselves to align with the changes that are happening. Competition will be cutthroat; it will become tougher on the banking sector. The only way banks will be able to compete is by differentiating themselves and their customer experience. It is like choosing a restaurant. We do not only choose a restaurant because of the good food. There are so many restaurants with great food, but we do not go there because they do not offer the experience. Banking is the same.

This is where PRG can help to redefine these experiences with banks.

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CEO CHAT

INSPIRATION IS EVERYWHERE Sara Al Madani has rebuilt her brand from scratch, become the youngest board member of the Sharjah Chamber of Commerce and Industry, and is working towards helping start-ups avoid her business mistakes

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We’re creating an ecosystem where everybody can do business, whether they have a start-up, small, medium, or large business – Sara Al Madani, Board Member, Sharjah Chamber of Commerce & Director, Rouge Couture

I

n 2002, when Sara Al Madani was 15 years old, she wanted to be financially independent from her parents. She found a store in an industrial area in Ajman that the owner was looking to vacate, the shop had an annual rent of AED 10,000. She sold her laptop and other electronic items, and worked side jobs, without her parents’ knowledge, to raise AED 30,000, which she paid the store owner up front.

The store owner employed a tailor, who Al Madani took on. His salary was affordable and any time she needed more money, she would pick up another job. In her first year, she sat in the store, staring at the tailor, not too sure what to do. But she did have one idea and her Rouge Couture fashion label was born.

“I disliked the way women wore the abaya, because they were just covering themselves. Tradition dictates that women wear the abaya, and religion tells women to be covered. But it doesn’t specify where and what has to be covered. I wanted to modernise it to enable Arab women to feel like they were part of the fashion industry, using traditional wear,” she said.

She added that when a designer is dealing with a traditional garment, it has a message and a presence. She has seen too many designers destroy the image of the abaya by making it look like a dress. She added that she comes up with new designs every month, because her customers wear the garment every day, therefore she cannot only release a collection each season.

Despite the limitations imposed by staying true to the essence of the garment, Al Madani said inspiration can be found anywhere, if you look for it. One collection was inspired by the movie Gladiator, where each abaya was given Roman-influenced panels because she wanted women to look like strong protectors.

“Once I was sitting down outdoors, drinking coffee, and a leaf fell onto my table and it was beautiful; the transition of green to brown was there.

I created a whole collection based on these colours, influenced by leaves and nature. Recently I was at the American Embassy in Abu Dhabi and I got inspired by something there for my current collection,” she said.

By the time she was 18, she opened her second store in Sharjah, under the guidance of Her Highness Sheikha Jawaher bint Mohammed Al Qasimi.

Sheikha Jawaher, who runs a number of women empowerment programmes, handpicked eight people from about 50 to mentor, of which Al Madani was one. She was given full assistance in finding the location for her store in Sharjah, as well administrative assistance in the business set up.

Two years later, at 20 years old, Al Madani opened her first store in Dubai, without any government assistance because she wanted to take on the challenge of moving from Sharjah to Dubai by herself to see if she could do it successfully. In 2013, owing to some misguided business decisions, she lost the entire business overnight.

“When you work with someone you know it’s easy to think it isn’t necessary to sign certain documents or involve a lawyer. I had to start over from scratch because my documents were not safe with my partners, and I did not protect my rights,” she said.

She said it was her favourite mistake, because it showed her that cont. overleaf

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CEO CHAT Sara Al Madani thinks it is important for startups to have a safe environment to learn from their mistakes during their early stages. cont. from pg. 21

she could rebuild her business from the bottom up, and it forced her to rethink her business strategy. She closed all her branches except the Sharjah branch, retained her factory in Ajman, and decided to operate her business online. This allowed her rebuild her business without excessive overheads,

and she said if it did not succeed, then she would not lose anything.

ENTERING THE BOARDROOM One month after losing her business, she found out she was appointed as a board member of the Sharjah Chamber of Commerce via Instagram.

She follows H.H. Sheikh Dr. Sultan bin Muhammad Al Qasimi, Ruler of Sharjah, and she saw the names of the board members for the upcoming cycle on his feed; then she saw her name. Apart from one other woman in Dubai, to her knowledge she is the only Sara Al Madani.

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“Congratulatory phone calls started coming and I was being tagged in posts and this was the best thank you I could receive, since I was recognised because of my work. Usually we think when we work hard, nobody notices what we do, but people do notice. It takes time but it is worth it,” she said.

At 30 years old she is the youngest board member, and only one of two women in a team of about 19.

However, she said she is treated like an equal, with both women’s thoughts and opinions taken into account. The board makes financial and strategic decisions for the city, with the priority being the development of Sharjah.

Board members can put forward a campaign, and decisions are made by a vote.

The initiative closest to Al Madani’s heart is Sharjah Scene, an initiative designed to promote life and business in Sharjah under three initiatives: activate, incubate, and award.

‘Activate’ promotes the lifestyle, culture and economy of Sharjah for anyone wanting to live or open a business there. It is a community initiative with activities that anyone can join.

‘Incubate’ is an incubator developed by the Chamber after two years of researching similar enterprises from all over the world, and has been created to cater to the Middle East, particularly with regards to terms and conditions that have to be met and processes that need to be in place to set up a business.

“Usually a government incubator caters to locals only, but this one caters to expats as well. No money is paid from the start-up’s side; everything is sponsored by the Chamber. Nothing like this has previously existed in the Chamber, and now we have a full wing dedicated to it,” said Al Madani.

Finally, the award programme is the Chamber’s way of acknowledging and thanking the people who have contributed to the economy and

growth of Sharjah. She added that it is an award that has existed for about 21 years in the Chamber, but it has been modernised. The first Sharjah Scene awards ceremony took place on 21 January 2017.

“We’re creating an ecosystem where everybody can do business, whether they have a start-up, small, medium, or large business. Our motto is ‘One city, lots of soul’ because we believe that humans make things happen, and we want to show people that they matter to us,” she said.

These initiatives are especially important to her, given her own mistakes in business making her start over. Had she not made them, she estimated she could have completed her business journey in six years, not 15.

SUSTAINING START-UPS Al Madani said her experience makes her want to use her position in the Chamber to create a safe environment for start-ups, and give people the playground to make mistakes through the trial and error phase. That way, with the right support, people can cut so many years off the process of growing their business.

“The advice we give businesses on sustainability is based on research done by independent consultants. The past two years of studies suggest within the next four years, Sharjah will be the Middle East hub for start-ups,” she said.

Having opened her business in Dubai and Sharjah, and from the perspective of being a Chamber board member, Al Madani said that opening a business in Sharjah offers some important benefits over Dubai. As an untapped and unsaturated market, and being quite new to the start-up environment, she said Sharjah is more affordable and more convenient.

With regards to imports and exports, Sharjah has two ports in prime locations offering easy access to target markets. For anyone living outside

of Sharjah, they are always going against the traffic which is useful, said Al Madani.

The Chamber is currently in the process of zoning Sharjah in terms of sustaining start-ups. Any business owner who wants to set up a business within a specific sector can approach the Chamber and be advised on the best location for it.

Al Fisht Road is a popular location for start-ups and there is a rule that similar businesses cannot operate in the same location, which Al Madani said, keeps competition regulated and healthy.

HOW TO FIND THE RIGHT BUSINESS PARTNER 1. Please do not do business with people you meet online or via social media. I have heard of too many people doing that, and then the deal goes sour and they wonder why.

2. Investors have proper channels.

Those channels are displayed publicly. Not using them is at your own risk.

3. Meet your potential partners in person. They should be referred to you by a government body or another business person.

4. Make sure you have lawyers and consultants go through your financials and draft your contracts.

5. Make sure the lawyer you use is a business lawyer. I know people who say they are friends with a lawyer who will draft the contract. Just because it’s a free contract doesn’t mean you have to take it! Pay the fee for a proper business lawyer, because it will save you a lot of money in the future.

Source: Sara Al Madani, Board Member, Sharjah Chamber of Commerce & Director, Rouge Couture

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COUNTRY FOCUS

HERE’S LOOKIN’ AT UAE, KID The UAE is expected to show steady growth in 2017 due to the Government’s continued efforts to develop its non-hydrocarbon economy and support the private sector

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he UAE is on track to emerge as the best-performing economy in the MENA region in 2017 and 2018, according to the latest outlook by macroeconomic research firm, Capital Economics. Though the average growth in the region is likely to weaken to 1.5 per cent in 2017, the UAE is expected embark on a gradual recovery in the coming quarters and is likely to be the best-performing economy in the Gulf in 2017 and 2018.

All six GCC economies were expected to experience a sharp slowdown over 2016, according to London-based BMI Research, a Fitch Group company. From 2017 there is expected to be a notable divergence in growth across GCC states, led by the UAE and Qatar. The BMI report added that the UAE is likely to see GDP growth of 2.8 per cent in 2017, up from 2016’s 2.2 per cent. This is attributed in part to the country having a more diversified economy than its peers. Panellists from analysis firm FocusEconomics expect the UAE GDP to rise to 2.6 per cent, while the International Monetary Fund

(IMF) and International Institute of Finance have predicted the UAE can expect growth of up to three per cent.

The IMF said in a recent statement that the growth of UAE's non-oil sector is expected to increase above four per cent in the medium term, thanks to a number of factors, including a slight recovery in oil price, pick-up in private investment in the run-up to the Expo 2020 Dubai.

At the end of December 2016, it was announced that an innovationoriented budget of AED 47.3 billion has been allocated for 2017, which will see the creation of approximately 3,500 jobs. Thirty-four per cent of the budget has also allocated to the social development sector, which includes health, education, housing and community development, while 17 per cent will be spent on improving infrastructure as the country continues to prepare for Expo 2020 Dubai.

The availability of new jobs across all industries in the UAE remained scarce in November 2016, according

to data by job tracker, The Monster Employment Index, which provides a monthly analysis of online job demand in the Middle East, conducted by Monster.com. Vacancies posted online by UAE employers dropped by 35 per cent in November compared to the same period in 2015, but it is estimated that 2017 will be a better year for those hunting for new employment opportunities in UAE. According to global recruitment agency, Hays, 55 per cent of workers in the UAE anticipate changing employers in 2017 because they feel there is no scope to progress within their current organisation.

Sanjay Modi, Managing Director at Monster.com, Asia Pacific and Middle East said the cautious approach by UAE businesses to growing their workforce would probably change confidence is restored with more stable market conditions. “While online hiring activity in the UAE currently remains very low, the movement of employees and employee talent gaps will create more opportunities, but higher competition

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SHUTTERSTOCK.COM/MARIIA SAVOSKULA

The UAE can expect an improvement in GDP growth in 2017.

for jobseekers, making it important for [candidates] to find ways to stand out,” he said.

INSOLVENCY REGULATIONS In 2016 the UAE Government put structures in place to regulate and restructure debt incurred by SME owners. By the end of 2015, a number of business owners fled the UAE to avoid prosecution for bounced cheques, leaving behind an accrued debt of approximately AED 5 billion.

In September last year the UAE Banks Federation announced that its restructuring initiative, dubbed ‘Modus Operandi’, which it started in March, had helped to reorganise approximately AED 7 billion in debt owed by more than 1,700 companies.

Abdul Aziz Al Ghurair, the UBF chairman and chief executive of Dubai-based Mashreq Bank said the potential fallout from rising levels of SME bad debt had been contained.

This support by the Government was underpinned by the announcement of the implementation date of the UAE’s

bankruptcy law as the end of December 2016, following cabinet approval in September. The law decriminalises bounced cheques and allows for debtors to restructure their repayments with creditors. On a greater scale, this legislation makes the UAE a more attractive location to do business and is likely to attract foreign direct investment by encouraging international business to set up offices.

SMEs received a further boost by a number of Memoranda of Understanding (MoU) signed by Dubai SME, an agency of the Department of Economic Development, mandated to develop and support the Small and Medium Enterprises sector in Dubai, and varying partners, including large Dubaibased companies, the Al Habtoor Group and law firm, Al Tamimi & Company.

In January this year, in an agreement between the Hamdan Innovation Incubator (Hi2), the United Trademark & Patent Services (UTPS), and law firm AL Tamimi & Company was signed to support innovation among Hi2 members.

Al Tamimi & Company will extend its legal knowledge and technical expertise in the fields of innovation and intellectual property, including patent protection, to local entrepreneurs.

The agreement is designed to protect the prototypes and patents of local SMEs and will develop solutions and programmes for SMEs, with the support of the UTPS team of lawyers and administrators specialising in all aspects relating to intellectual property, including patents, industrial designs, trademarks and copyright.

"The partnership with UTPS will add to the support we provide to SMEs, as we would be able to provide consultancy and technical expertise on entrepreneurial innovations,” said Saeed Al Marri, deputy CEO of Dubai SME. Omar Obeidat, Partner and Head of the Intellectual Property Department, at Al Tamimi & Company added that the company looks forward to working with entrepreneurs and SMEs in the UAE, to assist in the development, cont. overleaf

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COUNTRY FOCUS

Dubai is the land of opportunity; it offers many advantages to support entrepreneurs in the journey to success.”

– Khalaf Ahmad Al Habtoor, founding chairman of Al Habtoor Group

cont. from pg. 25

protection and commercialisation of their innovations.

The Al Habtoor Group signed an MoU with Dubai SME at the end of December 2016, and has committed to grant priority business contract to members of Dubai SME over a oneyear period. “We are happy to support members of the Dubai SME, to help enable their companies to grow. Dubai is the land of opportunity; it offers many advantages to support entrepreneurs in the journey to success,” said Khalaf Ahmad Al Habtoor, founding chairman of Al Habtoor Group.

The UAE Government has also focused on its Emiratisation drive to see its citizens employed in an efficient manner within the private and public sectors. It was announced at the beginning of January this year that the Ministry of Human Resources and Emiratisation (MoHRE) would begin monitoring decrees set out by Saqr Ghobash, MoHRE Minister.

Ministerial Decree No. 710 of 2016 mandated companies with more than 1,000 workers have at least two positions filled by Emirati employees.

Ministerial Decree No. 711 concerns health and safety officers within both industrial and construction sectors. It states that companies in these sectors, that employ over 500 workers, will not

receive work permits unless at least one Emirati health and safety officer is employed. Both decrees came into effect on 1 January 2017.

According to the Abu Dhabi Government website, the vast majority of UAE national jobseekers in Abu Dhabi, despite being well-educated, face a number of challenges in securing employment, making Emiratisation a priority for any of the Government’s present or future economic plans. The number of Emirati jobseekers ranges between 12,000 and 13,000 annually, of which 80 per cent are female, many of whom hold high qualifications, according to Human Resources Authorities.

SMES IN THE MEDIUM TERM Expo 2020 Dubai has committed to allocating 20 per cent of the Expo’s total direct and indirect spend, worth approximately AED 5 billion in contracts, to local and international small and medium enterprises (SMEs).

The announcement is the latest in a series of SME-focused operational and legacy driven initiatives that aligned with the UAE Vision 2021 to transition to a knowledge-based economy that fosters creativity and innovation.

“SMEs play a central role in the UAE’s drive towards cultivating a thriving

private sector and diversified economy, which makes SME empowerment a strategic priority for the Government,” said Sultan bin Saeed Al Mansoori, Minister of Economy and chairman of the UAE SME Council. He added that the UAE’s local and federal authorities are working closely to strengthen the local SME sector. SMEs represent almost 94 per cent of the total number of companies operating in the UAE, with 400,000 SMEs contributing 60 per cent to the nation’s GDP, a figure that is expected to increase to 70 per cent by 2021.

Expo 2020 Dubai, Dubai SME and procurement company Tejari, signed an MoU that allows SMEs registered with Dubai SME to bid for tender opportunities for the mega-event. This agreement forms part of an ongoing initiative to encouraging participation

by SMEs in the delivery of Expo Dubai 2020. Hosting Expo 2020 Dubai is expected to generate a gross value add of AED 71 billion.

GCC VAT

The GCC-wide VAT implementation date is set for 1 January 2018. Please see our feature on page 32 for more detail about how this will impact SMEs and what they can do to prepare for it.

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Some bonds are too strong to break.

As one of the most stable corporate banks in the UAE, Bank of Sharjah has built relationships with some of the region’s largest businesses, striving to offer the most solid, dependable and long-run banking solutions.

HEAD OFFICE: SHARJAH • BRANCHES: GARHOUD - DUBAI MEDIA CITY - ABU DHABI - AL AIN

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PRIVATE BANKING WEALTH MANAGEMENT: DUBAI MOTOR CITY

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1/24/17 11:07 AM

SHUTTERSTOCK.COM/PALTO

RETAINING TALENT

Employers can train their staff in lieu of offering higher salaries in a bid to keep their best people from leaving.

WAIT, DON’T GO! With 58 per cent of survey respondents stating an intention to look for other employment in the next 12 months, managers need to assess their staff retention strategies

I

n light of the drop of the oil price, recruitment has slowed across the GCC as businesses tighten their spending. The average pay rise in 2015 dropped to 5.7 per cent from 6.7 per cent in 2014, with 2016’s average pay rise forecast to average only 5.2 per cent, according to the Employment and Salary Trends in The Gulf 2016 report by job site, Gulf Talent. This would be lowest average increase since the annual survey was first launched in 2005. While the decrease in pay rise is moderate, it could still hurt employees as the cost of living rises.

According to the Middle East and North Africa Salary Survey 2016 by UAE job site Bayt.com, 46 per cent of respondents did not receive a pay raise at all in 2015, 64 per cent feel their

salaries are lower than the industry average and only about 50 per cent expected a pay raise in 2016. The 2016 Salary & Employment Report by recruitment agency, Hays, predicts employee turnover rates in the UAE will rise to 23.4 per cent by 2018, up from 20.6 per cent in 2012. The report showed 31 per cent of employees changed employers in 2015 and 57 per cent intended to do so in 2016, making it more crucial than before for Human Resource (HR) managers to approach and engage with staff in an effort to retain them, and keep morale up.

Salary is the main factor that can affect an employee’s motivation and will make them think about whether or not to stay with their company, according to Jon Richards, CEO

of financial comparison website, Compareit4me.com. Business owners need to take into account the cost of living, particularly in a place such as the UAE, where the cost of living is reasonably high. The Bayt.com report saw 80 per cent of the respondents witnessing an increase in their rent, 57 per cent have seen an increase in the cost of food and beverages, and 55 per cent said they have seen an increase in their utilities costs. The costs of education have also risen, according to 35 per cent of the respondents. The latest data supplied by cost of living database, Numbeo.com, saw Dubai ranked as the seventh most expensive city in the world.

“Poor salaries and late wage payments will also badly affect morale.

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If you don’t keep up your end of the implicit employeremployee deal, you’re unlikely to keep staff on for long.

– Jon Richards, CEO of financial comparison website, Compareit4me.com

If your employees are worrying about whether they’ll have enough in their account for their next rent cheques, you will have issues with their performance, so it is imperative to get the salary part of the business right,” Richards said.

He added that business owners should consider having good office space in a reasonably central location, with good amenities such as easy parking or good access to the Metro, which can get expensive, but it does have a good impact on morale.

However, it doesn’t automatically hold true that a smaller office in an area more difficult to access will negatively impact morale; business owners can compensate for that with other benefits such as flexible working hours or a good company culture.

“Aside from the operational aspects, creating a fun, welcoming environment in the office is hugely important–you want your staff to want to come to work. Business leaders often talk about creating a company culture and there’s a lot in that; you all have to be driven in the same direction and to be able to have a good time while working on your goals,” he said.

Recognising a staff member for their contributions to the company is important for talent retention. If staff members feel they are adding value to the organisation, then they will be more productive, which leads to a better working environment, said Omaira Farooq AlOlama, Managing Director of ALF Administration, a training centre that focusses on improving UAE nationals’ employability

by facilitating training and mentoring programmes.

While a salary is the main driver for employees remaining at their current employment, 32 per cent of the respondents of the Bayt.com survey said their loyalty to the company did not hinge on the salary they received; 40 per cent said long-term career advancement opportunities were important factors as well.

“From what I know about my people is that the Emirati nation as a whole is very loyal and very dedicated to watching their country grow. To be able to be part of that initiative in any way, shape or form supersedes a high salary. That doesn't mean they do not deserve to get paid according to their market value, it means that if a clear, concise career path was available, with development programmes and goals in mind, then most Emiratis will never turn it down,” said AlOlama.

Career progression is something management teams should keep in mind, regardless of the size of the organisation. McDonald’s UAE’s approach to employee retention focuses on development and fostering longer term career progression. Without this framework, employees can become quickly disengaged and unsatisfied.

Some key development techniques that can prevent employees from developing a negative attitude include offering workshops, training, classes and seminars for all job levels from the crew to higher level directors, according to Walid Fakih, General Manager, McDonald’s UAE.

Fakih said that based in a country such as the UAE where 84 per cent of the workforce is made up of expats, it is to be expected that a large portion of the workforce will resign for personal and family reasons such as relocating to their home country.

Ninety-nine per cent of McDonald’s UAE employees are expat workers, so the most common resignation reasons are in line with this trend and include leaving to take care of their immediate family or start a new family, pursuing higher education, or accepting a better career opportunity locally or internationally.

Richards added that a common reason for resignations includes staff members finding a new opportunity that is important for their career growth, which will allow them to take another step towards their goals. If a company is not going to nurture their staff and give them real growth paths, then naturally they will look for those opportunities elsewhere.

He cited an example of someone who left his previous company because management gave him all the responsibilities of a manager, but refused to give him either the title or the pay raise to go with it.

“If you don’t keep up your end of the implicit employer-employee deal, you’re unlikely to keep staff on for long. Issues such as making sure salary payments are regularly on time, promptly sorting out decent health insurance, and being conscious of workloads all contribute to a person’s motivation for staying.” Richards said. cont. overleaf

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RETAINING TALENT

cont. from pg. 29

COST-EFFECTIVE INCENTIVES According to the Bayt.com report, approximately 21 per cent of workers receive overtime pay and 43 per cent receive a company bonus or incentive plan. Of those who receive a bonus, 67 per cent receive an annual yearend bonus and 35 per cent receive bonuses that are incentive-based.

In the event that a company cannot extend its budget to offer a new employee a competitive salary package or current employees a raise, there are other ways to incentivise and reward staff, such as flexible working hours, increased paid holiday days, and greater autonomy in lieu of a bigger salary, said Richards. “Those sorts of benefits are worth the pay cut to some people. And, if you can, invest more time rather than money in your employees. If you have a mid-level staff member keen to learn more about management, you could offer to train them up really well rather than offering a bigger salary package,” he said.

AlOlama added that the issue of retaining staff in light of financial restrictions can be addressed through having a clear-cut development plan, particularly when employing UAE nationals.

“There are three golden rules to follow when it comes to Emiratis.

First, one job does not fit all.

Everyone has different strengths and weaknesses and these should be addressed on an individual basis.

Second, do not hire Emiratis for jobs that do not exist, just to meet a quota. How can a career plan and development path be developed if there is no job to speak of in the first place? Third, do not expect an Emirati to give you 100 per cent unless you develop and train them, and then show them the end goals. If there was a promise of a promotion or something in a year or two then honour it,” she said.

It is important that an employer invests in listening to their employees to get a gauge on their satisfaction levels, said Fakih. Having an ‘open door’ policy where employees can feel comfortable sharing their thoughts or complaints with higher management, if required, is also key to retaining employees.

Richard added that if an employee has made his or her mind up about leaving, all management can do to prolong the amount of time before an employee reaches that point is to provide a supportive, dynamic and fun working environment. Offer praise when they do a good job and guidance when mistakes have been made–basic principles, but applying them can encourage staff to stay for longer. In recent years, there has been a movement to increase focus on wellness in the workplace which has pushed employers, including McDonald’s UAE, to put activities and processes in place to encourage a better work-life balance for their employees.

“As 70 per cent of our employees are under 30, some of the activities we have found successful are yearly events such as ‘Crew of the Month’, crew and manager outings twice a year, and a ceremony where we acknowledge and reward the highest performers in the company. We also do quarterly sports tournaments alternating between football, basketball, volleyball and cricket competitions. It is also very important to have an adequate staffing system in place so employees are not overstretched at work,” said Fakih.

Overloading employees is something management needs to consider carefully, particularly in the case of smaller businesses. Richards said that often the case with SMEs is getting a group of extremely enthusiastic people willing to put in all hours to make sure the business is successful. “As a business owner,

it’s easy to allow this to go on and to take advantage of it because it benefits you. Unfortunately, it could lead to problems from the work-life balance point of view, so make sure your people aren’t working all hours, and bring them up on it if they are,” he said.

Richards added that leaving aside potential financial limitations, there are advantages to working for, and staying with, an SME. Employees will be exposed to a breadth of experience that they would not have in larger companies. The multitude of jobs employees will be required to do at a start-up makes for invaluable work and life experience. Working at a startup allows employees to see how a business is built and run, whereas at a larger company, they’re more likely to be slotted into a department, given their KPIs, and that’ll be the size of it.

At a start-up almost every employee is essential for the day-to-day running of the company, and everyone knows exactly what everyone else is doing, and why, and everyone will be able to pitch in wherever needed.

FUTURE PLANS OF UAE RESIDENTS

58% plan to find a better job in the next 12 months.

73% plan to look for a better job in a new industry.

12% plan to relocate to another country in the Middle East in search of a better job.

31% expect salaries to slightly increase.

9% expect salaries to slightly decrease.

Source: Middle East and North Africa Salary Survey 2016 by Bayt.com

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SHUTTERSTOCK.COM/BILLION PHOTOS

VAT Preparing for VAT now by taking proper steps to be compliant can save businesses time and money in the long run.

A TAXING MATTER With the implementation of the GCC VAT set to take place on 1 January 2018, experts advise businesses, and SMEs, how to prepare

I

n an effort to diversify their economies away from hydrocarbons, Gulf Cooperation Council (GCC) countries will introduce a value added tax (VAT) on 1 January 2018.

VAT is a consumption tax and the rate is likely to be five per cent across most products, though certain basic food items will be exempt.

The UAE expects to generate between AED 10 and 12 billion in revenue in the first year of implementing value added tax (VAT), according to the UAE’s Minister of Finance, Younis Al Khouri.

Al Khouri said in June 2016 that GCC countries are yet to finalise their implementation policies, but the UAE

has outlined details about the first phase of the system. Under phase one, companies with an annual turnover of over AED 3.75 million will be obliged to register under the system and will be taxed accordingly. Companies earning between AED 1.87 million and AED 3.75 million will be given the option to register.

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The standard rate of five per cent is relatively low when compared to other countries, considering some European countries have a 25 per cent VAT rate, according to Claire McColl, KPMG Partner, VAT. “The low GCC rate should ease the impact of VAT on UAE firms and is unlikely to discourage foreign direct investment, given the overall benefits which include its infrastructure, political and economic stability, and geographical location,” she said.

Although the proposed implementation date of 1 January 2018 is a year away, SMEs that will have to register for VAT need to start preparing now, said Neil Stewart, Head of Corporate Solutions at financial planning firm, Guardian Wealth Management. Accounting practices and software will have to be updated with SMEs adopting VAT calculations and utilising the TAX function for sales and purchases.

“Cash flow management is a key area, with sales under the new regime needing an added monetary value. It is recommended that SMEs set up an additional bank account to collect VAT monies which will enable transparency on all levels. SMEs will need to keep accurate records to demonstrate that the VAT rules have been carried out to the letter,” said Stewart.

Broadly speaking, each business will need to evaluate each transaction type it enters into to determine the impact VAT will have on its cash flow, supply chain, IT systems, and internal resourcing, according to Ghanzanfar Jaffri, Business Development Manager at MAZ Chartered Accountants.

He added that the most effective way of doing this is to consult with external professionals who can guide the company through the VAT

implementation process. This may cost a bit more in the short term, but will outweigh the potential costs of non-compliance.

VAT BENEFITTING SMES One of the major benefits to registering for VAT is improved cash flow in the first quarter following the introduction of VAT legislation.

Client payments containing a VAT component may be received earlier than the VAT payment due-date to the Government, which is likely to be quarterly, pending Ministry of Finance announcements, said Sam Emery, Finance Director and facilities management provider, Emrill Services LLC. “If cash flow planning is carried out effectively, this could be more advantageous for the company’s current account situation. However, companies offering extended payment terms, especially longer than 90 days, may need to review or shorten their customer payment terms in order to ensure their payment cycle aligns with Government VAT due dates,” said Emery.

McColl added that if SMEs have registered for VAT, they must correctly charge and account for VAT but can obtain credit for the VAT incurred on their costs. SMEs that cannot register for VAT are unlikely to benefit from VAT credits and their business costs are likely to increase. From a wider, macroeconomic perspective, introducing VAT to diversify sources of government revenue should help increase prosperity, not least through the creation of new jobs in tax and accountancy functions.

Ensuring the availability of sufficient working capital will prove another challenge for SMEs because

those companies that lack the necessary VAT systems or in-house capabilities will either need to invest in setting thse up, or they will have to ource these functions to an external bookkeeper or accountancy practice, both of which will incur an additional cost. “These extra business costs should be planned now to avoid interfering with the company’s future financial forecasts or business plan in the future. Advanced palnning will lead to success when dealing with statutory accounting requirements,” said Emery.

In the case of non-registration, SMEs may find themselves at a disadvantage on two fronts, according to Jeanine Daou, Partner and Indirect Taxes and Fiscal Policy Leader at PwC, Middle East. In the first instance, VAT laws prohibit non-VAT registered traders from recovering any input VAT incurred on their purchases. This irrecoverable VAT will be an additional cost to the business and will therefore impact the profit margins of these nonregistered SMEs. As a result, nonVAT registered SMEs may potentially increase their prices to maintain profitability, potentially impacting their competitiveness in the market.

“VAT, if not well managed, may lead to cash flow problems. SMEs that sell their products on cash terms and buy on credit terms will be better off than those who sell on credit and make cash purchases. These SMEs may need to critically consider reviewing such arrangements, as well as payment terms offered to customers and with suppliers,” said Daou.

The costs associated with the administration of VAT will have to be incurred by the business; some businesses will be in a position to cont. overleaf

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VAT

VAT, if not well managed, may lead to cash flow problems.”

– Jeanine DAOU, PwC Middle East Partner and Middle East Indirect Taxes and Fiscal Policy Leader

cont. from pg. 33

absorb these costs within their existing infrastructure, but for many this will be an ongoing, extra cost for them, added Jaffri.

COMPLIANCE According to the UAE Ministry of Finance’s website registration for VAT is expected to open to businesses that meet the eligibility criteria three months before the launch of VAT, and this can be done online an eServices portal. It is expected that the default period for filing VAT returns will be three months for the majority of businesses, which can also be done online. Until then, business owners have been advised to start preparing for VAT implementation, in order to avoid any fines or penalties for non-compliance.

The first consideration, according to Emery, is the education and training of staff, since VAT and tax in general may be a new concept to many finance department staff members. It is crucial that at least one member of the finance team fully understands the VAT regulations and requirements, and is able to implement the correct procedures throughout the business. VAT will affect other departments of the business, for example, the VAT number may have to appear on all receipts, as is the case overseas, so the point-of-sale software may have to be upgraded to print receipts accordingly.

Furthermore, business owners also need to review their current financial systems to determine how they can accommodate the necessary VAT administration into their business structure. They need to ask whether the system allows for different tax rates automatically or if they need to be selected manually. “The internal financial administration system will be the key driver to calculating the correct amount of VAT payable. Without this, incorrect VAT returns may be submitted which could lead to overpayment of VAT, negatively affecting the company’s cash flow and financial position. Or, if and when VAT and tax audits are conducted by the Government, any errors or underpayments could result in severe penalties, which could include interest on underpayments from the due date,” said Emery.

Daou added that VAT registered SMEs will be required to issue a valid tax invoice upon the supply of taxable goods and services, and that the GCC VAT system is expected to issue standard requirements for invoicing.

“Where a registered person reduces, or increases, the value of supply after the issuance of an invoice, they must issue a credit, or debit, note within a prescribed period for the relevant amount.”

Finally, penalties can be avoided by maintaining up to date records to substantiate all VAT liabilities and entitlements in the event of an audit

by the relevant tax authorities, as well as submitting correct VAT returns in a timely manner.

HOW TO PREPARE FOR VAT • START NOW: The proposed implementation date is 1 January 2018, so there is not a lot of time.

• GET EDUCATED: Develop an understanding of VAT regulations.

• DOCUMENT CONTROL: Review filing methodology and seek professional advice from an accountant if necessary.

• CONTRACTUAL ARRANGEMENTS: Identify which contractual arrangements with suppliers and customers need to be in place before VAT goes live.

• IMPLEMENTATION TEAM: Establish an internal group of experienced and competent staff to oversee and manage the VAT process.

• MAP BUSINESS TRANSACTIONS: Identify and assign a VAT classification code to all your business transactions, including any intra-GCC and intercompany transactions.

• CONSIDER CASH FLOW: Businesses will be required to pay VAT to the Government, most likely on a quarterly basis, and there will likely be fines if payments are made late or not at all. Make sure there is sufficient capital in case these penalties have to be paid.

Source: Clare McColl, KPMG, VAT; Sam Emery, Finance Director, Emrill Services LLC; Jeanine DAOU, PwC Middle East Partner and Middle East Indirect Taxes and Fiscal Policy Leader

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CASE STUDY

DISRUPTED BY DELIVEROO Deliveroo epitomises how a start-up can identify a market gap, address it, and grow consistently, outpacing its competitiors

D

eliveroo, a technology company that focusses on logistics, was first launched in London in 2013

by Founder William Shu to solve the problem of an unreliable delivery food service. The company which started with three Chelsea-based restaurants signed up now employs over 300 staff and operates a fleet of over 5,000 delivery drivers in more than 60 cities across Europe and Asia.

“Our partner restaurants have a tablet and our customers and drivers have the Deliveroo app. When a customer places an order on the app the restaurant receives the order on the tablet. Once the food is prepared the restaurant will notify the driver via the app and they will be dispatched to collect the food for delivery,” said Anis Harb, General Manager, Deliveroo UAE.

The service is fully-integrated via technology; there is no need to use cash or pick up the phone and the customer and restaurant can track the progress of the delivery of the food at all times. The restaurant pays a commission and the customer pays the delivery fee, making Deliveroo the market place that connects the two.

Shu chose the name before starting the company because in his view, a kangaroo protects its joey in its pouch, and the Deliveroo drivers take care to deliver the customer’s food safely.

After playing around with the words, the name was chosen.

Deliveroo’s growth has been quick.

Shu underwent his first round of fundraising in 2014, around seven or eight months after the company’s launch. He then raised $25 million in January 2015, followed by $70 million in July 2015.

It was then that the business was expanded across the rest of the UK and Ireland. In November 2015 the company was able to launch in Singapore, Australia, Hong Kong and Dubai. The business has shown 25 per cent growth, globally, monthon-month since its launch. In Dubai alone Deliveroo currently has over 600 restaurant partners and over 350 drivers.

The company allocates its funds based on what is needed to grow and where the opportunities to do so are, so there was no need to raise capital locally and multiple rounds of funding have enabled it to continue to grow by launching internationally.

COMING TO DUBAI The food and beverage sector in Dubai is competitive, with a number

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Deliveroo provides complete transparency by allowing customers to track their delivery.

of restaurants operating an online delivery service. The sector is expected to reach revenues of around $13.2 billion in 2018, up from 2016’s $12.2 billion, according to estimates by The 2016 Food and Beverage Report by global auditing firm KPMG. The Deliveroo team spent a lot of time studying the Dubai food delivery market and it was apparent that there were three fundamental issues with it, according to Harb.

First, the average food delivery time was anywhere between 50 and 60 minutes. Second, the delivery was not reliable, meaning delivery time could be around 55 minutes to an hour and 15 minutes. Finally, there was no transparency; once the order was placed the customer had no way of knowing where their food was.

Even if they called the restaurant,

the restaurant had no idea where the food was once they dispatched their own drivers.

Even though Dubai has a relatively mature market for delivery, the Deliveroo team knew their technology would address all three issues. “We are able to limit the radius that a driver can travel, reducing delivery time to an average of 32 minutes. Second, we know where all the drivers are at any given time, so we are able to follow up on anybody holding up the process. Our technology allows for complete transparency; the customer and restaurant can track the delivery, so all parties know what is happening with the food. Most importantly, the customer knows exactly when to expect their food,” said Harb.

Harb arrived in Dubai on 1 September 2015 with his core team

and Deliveroo was able to launch by mid-November 2015. “We were able to set up the business within ten weeks, which is testament to the market here and how conducive it is to setting up a business in general, particularly in the free zones. We are constantly working to improve and create a better customer experience.

The infrastructure in Dubai is quite different to European cities, so we had to spend some time figuring out how to optimise our logistic platform within Dubai’s infrastructure,” said Harb.

Deliveroo UAE uses local payment gateway, checkout.com, and even though this gateway is not used in other markets, there were no problems integrating the platform.

Harb added that what allowed Deliveroo to be so well received in the cont. overleaf

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CASE STUDY

cont. from pg. 37

region is what sets the company apart from its competitors. “The traditional delivery website assists restaurants to list online and they help bring those restaurants customers. But once the customer places their order, the restaurant will fulfil the delivery with their own drivers, which makes the site more of a middle man which cannot manage the customer experience.

We were able to grow so quickly in a relatively mature market because we were able to offer that last step,” he said.

At first Dubai restaurants were sceptical about using the Deliveroo platform because many of them have their own drivers. Restaurant owners wanted to know the value in paying a slightly higher commission when they already had a delivery infrastructure in place.

“Deliveroo provides a full delivery solution, from the customer ordering their food to the customer receiving their food, and that includes the drivers doing the delivery. Restaurants are not asked to take on any more staff, and though they pay a commission, Deliveroo provides an incremental revenue stream for restaurants,” said Harb.

Aside from restaurant partnerships, Deliveroo works with local suppliers for driver uniforms and with local agencies to hire their drivers. “We take the hiring process very seriously, because to do what we do we have to have the best drivers possible on the road. We look for applicants that are able to use technology, and who take their safety seriously. They have to obey RTA rules and stay aware on the roads in Dubai,” said Harb.

The Deliveroo team grew the brand by focusing on digital channels, rather than advertising on billboards or handing out flyers. “We also focussed on a number of member programmes. If a customer placed an order using a certain code, both the

customer and restaurant received AED 50, so that actually helped us gain a lot of new users through word of mouth. Awareness is also created by our branded bikes around the city,” said Harb.

EXPANSION AND INNOVATION The Deliveroo team is currently exploring the markets throughout the GCC, although there are no immediate plans to expand. The management team is currently focussed on rolling out delivery services in more neighbourhoods in Dubai.

The service was recently launched in Mirdiff, Deira, and Ibn Battuta. In December 2016, the service expanded to Abu Dhabi.

Deliveroo has begun investing in its own kitchen space, as a means to help solve the problem of lack of supply and to expand their offering. RooBox, a mobile kitchen initiative that is bringing restaurant brands to areas of Dubai, such as Jumeirah Village Circle, that have a large residential population but are currently underserved in terms of available restaurants or delivery options. By working with RooBoxes

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DELIVERING EXCELLENCE THE PROBLEM

The Deliveroo app tackled three issues faced by Dubai’s food delivery industry, namely: • The average food delivery time was anywhere between 50 and 60 minutes.

• Delivery times were not reliable, and could take any time from 55 minutes to around an hour and 15 minutes.

• There was no transparency.

Once the order was placed by the customer, there was no way of tracking its delivery.

THE SOLUTION

The company relied less on offline advertising and more on digital channels and easily identifiable drivers to build the brand.

a restaurant will be able to offer a delivery-only service to these areas, without having to set up an entirely new establishment, said Harb.

“There are currently about nine RooBoxes in London and we plan to expand to over 100 in 2017, and there are plans to do the same in Dubai, and we are very keen to take that next step because it will allow us to work with key partners to offer a wider selection of delivery options to areas that have been underserved,” said Harb.

For any aspiring entrepreneurs, Harb said it is very important to remain focused

on their key drivers. They should pick an industry that is very big and ripe for disruption. “By disruption, there needs to be a big market where you can identify things that are visibly wrong, the way Deliveroo addressed the transparency issue. Once that market and the issue are identified, pick the two or three growth drivers that you want to build on and that will actually disrupt the industry, and then focus on them relentlessly,” he said. He added that many companies either tackle small markets or they lose focus and try to do too many things for the customer.

• The Deliveroo team limited the areas covered by each driver, dropping the delivery time to 32 minutes.

• The location of each driver is known at all times, so delays can be monitored and addressed.

• The customer can track their delivery to know when to expect their food.

THE RESULT

Deliveroo has been wellreceived by restaurants and consumers, shown in the company’s steady, consistent growth. The company has, to date, raised almost $500 million and its valuation is estimated to be around $1 billion, giving it unicorn status, which has become the benchmark of a technology start-up’s success.

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FACETIME

TREADING WATER While GCC countries have had to reduce spending and diversify their revenue streams, SMEs need to stay competitive in the current economic climate

T

he biggest challenge for the development of SMEs in the UAE is the availability of finance. Banks are reluctant to provide funds to new businesses in light of the number of business owners who fled the UAE at the end of 2015, leaving approximately AED 5 billion in debt. In September last year, an initiative among local banks to bail out small and medium sized enterprises (SMEs) has helped to restructure some AED 7 billion of debt owed by more than 1,700 companies in 2016, according to a statement by the UAE Banks Federation (UBF).

SMEs make up 95 per cent of all establishments in Dubai and account for 42 per cent of the workforce and contribute around 40 per cent to the total value add generated in Dubai’s economy, according to The State of Small & medium Enterprises (SMEs) in Dubai by Dubai SME, an agency of the Department of Economic Development (DED) that focuses on supporting and improving the SME sector.

“It’s quite difficult because SMEs are the true spirit of the economy here in Dubai, although they are underestimated. Dubai would not be Dubai without the small traders and the small companies that are start-ups. They add flavour and

create diversity,” said Abdulla Al Gurg, General Manager of ESAG Group LLC, a multidivisional conglomerate.

He added that the only way SMEs can compete in the current economic climate is through efficiency and product development. By studying the market, entrepreneurs need to create a product or a service within a niche segment, but with an added value, citing Careem as an example. “It is a home-grown SME, and is in direct competition to Uber, which is a global company. It came from nothing, and yet it seems people are interested in using the local product more than the international one. Home-grown brands are created to cater to a need within a certain country, and there is a loyalty factor that SMEs need to focus on,” said Al Gurg.

BANKS AND SMES Al Gurg added that it is unlikely the banks are going to change their perception of SMEs, nor their aversion to providing funding, in the short-to-medium term because the track record of SMEs globally makes them high risk, with no guarantee of success.

Previously Al Gurg worked for the Mohammed Bin Rashid Establishment for Young Business Leaders when His Highness Sheikh Mohammed bin

Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai announced his AED 700 million fund for SMEs in Dubai.

His first task was to study SME business plans and present them to the committee.

“I presented 15 and they financed around seven or eight of them, and 90 per cent of them failed. After going through that whole cycle, I realised that the probability of SMEs succeeding is actually quite low. The success comes from the dynamics of the individuals themselves. What could happen is a lot more private equity firms will come in as more dominant players in the field and crowdfunding will play a bigger role in funding start-ups,” said Al Gurg.

At the end of December 2016, the Al Habtoor Group, a Dubai-based UAE corporation with diversified businesses in several sectors, signed a memorandum of understanding (MoU) with Mohammed Bin Rashid Establishment for SME Development (Dubai SME) to support local businesses. The agreement period is for one year, whereby the Al Habtoor Group will give priority business to members of Dubai SME, proving they can supply a competitive service.

Al Gurg said these types of agreements, as well as the

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Dubai would not be Dubai without the small traders and the small companies that are start-ups.”

– Abdulla Al Gurg, General Manager of ESAG Group LLC

In order for SMEs to remain competitive in the current economic climate, they need to develop products that add value to the market.

Government Procurement Programme which mandated that five per cent of purchases be made from SMEs, could eventually lead to a change in perspective by UAE banks, but he said there is a distinction between SMEs and local companies.

The Al Habtoor Group and the ESAG Group are both local, multidivisional companies, and it could be argued that the smaller businesses within the group would fall under the same umbrella as SMEs. “But the periphery SMEs under larger companies are more likely to be supported by the banks because they have the backing of the parent company,” said Al Gurg. But there are also sectors in which SMEs can come up with support from large local

companies, such as ESAG or Al Habtoor, by creating value within the chain.

Al Gurg used ESAG’s tyre division as an example of how larger companies could indirectly support SMEs–an entrepreneur could start a garage to fill a market gap. “I think Banks should consider viewing SMEs from that perspective, rather than simply seeing the business as a brand new start-up,” he said.

Al Gurg said it is possible that a contributing factor to the rate of failure in the SME sector is a lack of due diligence and patience on the part of the entrepreneur, adding that before starting a business it essential for people to get a few years’ worth of work experience.

He added that learning patience is an imperative skill, and aspiring business owners need to learn to pace themselves.

“They need to absorb more information from the market and try to learn a bit more before jumping in with both feet. They need to do research and test an idea on a smaller scale, and know what they really want. Mostly, youngsters in particular do not really know what they want. There are people who want to start a company every two weeks, and they constantly come up with new ideas. It doesn’t work that way,” he said. Entrepreneurs should be dedicated to seeing their idea all the way through, and not change their minds all the time. Otherwise there would be no successful companies.

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SHUTTERSTOCK.COM/BILLION PHOTOS

FRANCHISE

Axalta Coatings Systems has evolved its product line from coatings for horse-drawn carriages to heavy-duty machinery.

COVERED IN PAINT

Axalta Coating Systems has been supplying coating products for 150 years and opened its flagship location in JAFZA in 2016

A

xalta Coating Systems, as it is known today, is a global coatings company that was established in 1886, during the Industrial Revolution. Its first product, Standox, was used as a finish coating for horse-drawn carriages across Europe. With the emergence of motorised vehicles, the products evolved to cater to new markets,

providing coating for cars, trucks, and other commercial vehicles, according to Charles Shaver, Chairman and CEO. Standox remains one of the leading automotive coating products, globally. The range of products and services include paint and powder, colour matching tools, application technologies, customer training, as well as support.

Having serviced the refinish and collision repair market within the Middle East since 1983, Axalta Coating Systems opened its flagship outlet in Jebel Ali Free Zone (JAFZA) in October, 2016. “Because of Dubai and the Middle Eastern region’s growth, it made sound business sense to expand our own footprint. One of the chief factors for the decision to establish

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our Middle East office in Dubai is its emergence as a leading trade hub within the GCC. This is supported by its strong economic growth, private sector activity, low interest rates, and widespread government spending.

JAFZA was selected because we felt it was the best location to meet our facility requirements,” said Shaver.

According to Emirates NBD’s 2016 Automotive Industry Report, the UAE is the second largest automotive market, which includes cars, commercial vehicles, parts, accessories, and tractors, in the GCC after Saudi Arabia. For new car and light commercial vehicle sales, the UAE accounted for 22.5 per cent of the GCC’s total, up by approximately four per cent from 2015.

Virtually the entire supply of the UAE’s cars and commercial vehicles are imported and apart from a few units assembling truck and bus components, there is no significant production or manufacturing activity, according to the report and Shaver said this gap allows Axalta to build on its experience in the region.

The number of passenger cars in use in the GCC region is expected to grow at five per cent annually from an estimated 10.3 million in 2015 to 13.2 million in 2020, according to a report

by Alpen Capital. Annual new car sales are projected to be approximately 1.4 million in 2020, up from 1.2 million in 2015. Although new sales declined in 2016 and will be under pressure in 2017, the Alpen report stated sales are expected to see steady growth starting in 2018 as the economic environment stabilises and creates demand.

Apart from being a primary global supplier in the refinish segment supporting body shops and the vehicle repair industry, Axalta is also a leading supplier of light vehicle original equipment manufacturers (OEM) and coatings supplier to heavy-duty truck and bus manufacturers. Shaver added that Axalta is the second-highest supplier in the electrical insulation, the industrial undercoat, and industrial powder.

The company, which operates in more than 130 countries, works in partnership with importers and agents to distribute its products to its customers. It works with more than 35 local importers to supply more than 4,000 body shops in the Middle East. “These partnerships have been established over time and we are very careful about who we work with to ensure that we continue to deliver the same quality and reliability that the brand is known for,” said Shaver.

STANDING OUT In 2015, Axalta Coatings invested over $160 million in research

and development (R&D) to keep improving the product line. Latest developments include coatings that are water-based and are therefore more environmentally-friendly and do not require expensive, hightemperature, energy-consuming ovens to be cured or dried. Furthermore the waterborne base coat products require approximately half the previous number of layers used by traditional coating products, without compromising the quality of the finish. Shaver added that products are developed to meet the demands of the climates where they are used, by adapting formulae where necessary to perform to spec.

150 YEARS OF COATINGS IN BRIEF In 1866 Herberts, the original producer of Standox paint products was founded, followed by the Spies Hecker coatings company in 1880. In the 1920s Duco paints, manufactured by DuPont in the US and Permaloid paints, manufactured

by Spies Hecker in Germany, were introduced as sprayable paints. In the 1950s Standox paints launched its premium line and by the 1980s the company introduced its first waterborne OEM coatings in North America. DuPont acquired Herberts coating businesses in the 1990s. On 1 February 2013 DuPont sold the company to the Carlyle Group, one of the world’s largest equity firms and the name Axalta Coating Systems was adopted. On 12 November 2014, the company underwent an IPO and it became a publicly traded company on the New York Stock Exchange. In July 2015, the Carlyle Group sold the remainder of its shares and the company is now 100 per cent publicly owned.

Source: Charles Shaver, Chairman and CEO, Axalta Coating Systems and http:// www.axaltacs.com/

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START-UP

CUSTOMISE MY CRIB Dala Farouki Kakos created MISK Nursery in order to offer mothers-to-be beautiful furniture that can become family heirlooms

Dala Farouki Kakos

M

ISK Nursery, an online store supplying cots, cribs and bedding, launched officially in September 2016. Founder and Managing Director Dr. Dala Farouki Kakos had the idea when she could only find basic cribs about six years ago, when she had her first child.

“I searched for something different, but the most I could find was a grey crib in the US, unembellished. While I liked the simplicity of the crib and did not want anything too complicated, I knew that the design and aesthetics in the nursery deserved more,” she said.

She decided to make MISK a reality last year, when it came time to prepare her second child’s nursery.

With an education in engineering, Kakos designed the cribs with simple lines, using organic materials and mother of pearl embellishments.

She takes inspiration from locations she has travelled such as Lake Como and Mykonos.

The cribs follow US safety standards and are continuously tested for strength, durability, and finish.

Kakos added that safety features that have to be considered include: the spaces between the railings, the space between the railing and the mattress, the strength of the base of the crib, the weight the crib can withstand, accessory materials such as the screws used, as well as the quality and source of the paint.

Among the challenges she faced was balancing her time, as a working mother of two while working to complete her Doctorate in Education, as well as working as the Chief Education and Strategy Officer for a venture capital firm. A problem she circumnavigated by negotiating flexible working hours.

FINDING SUPPLIERS

Kakos had to find suppliers that believed in the company enough to do smaller quantities and still work hard on them to the point of delivering superior quality, even if it was only one or two cribs at a time.

“The company specialises in custom touches; mass production

may never be an option. Even if it was, the hand craftsmanship and focus on quality materials and work means cutting expenses through mass quantities and cheaper overseas production are not in alignment with our goals for providing quality cribs for babies. Not being able to order larger numbers means paying more per piece, which means more expenses with less return,” said Kakos.

The cribs are manufactured in Lebanon by a second-generation Armenian artisan, the organic cotton sheets are manufactured in the UK and Portugal, and the coconut-fibre mattresses are manufactured in the UK. MISK also offers orthopaedic mattresses.

Finally, Kakos had to price the products carefully while convincing potential customers to be open to spending a little bit more on a crib. “A crib lasts more than three-and-a-half years and is a modern heirloom with a semiprecious feature, so we priced the product as fairly as possible while offering something safe, beautiful and long-lasting,” she said.

The brand has been received well and 2017 will see Kakos adding new items to complement the company’s existing product range, such as changing tables, night stands, armchairs and rocking chairs, as well as limited edition bedding.

Kakos plans to expand the brand through the GCC region via selected store placements.

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BME P

T H E

Q U E S T

F O R

E X C E L L E N C E

BME PRODUCT AWARDS 2017

Nominations will be open shortly for the Banker Middle East Product Awards 2017 UAE. What has your institution done this year that makes you feel proud? Celebrate your achievements in financial product design, development and marketing by nominating your products in the most prestigious product recognition programme in the MENA region’s financial services sector.

VOTING OPENS

23 JANUARY

VOTING CLOSES

16 FEBRUARY

NCED

WINNERS ANNOU

19 FEBRUARY to feature in March BME

For more information, contact: events@cpifinancial.net Tel: +971 (0)4 391 4682 Fax: +971 (0)4 390 9576 CPI Financial FZ LLC, 1209 Shatha Tower, Dubai Media City, Dubai, United Arab Emirates

www.cpifinancial.net

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SHUTTERSTOCK.COM/VALENTINT

TECH FOCUS

FUELLING PERSONALISATION SMEs can use the technology of personalisation engines to leverage their business, according to Profusion’s Guy Marson

D

riving around the streets of Dubai, it is hard not to notice the many Ferraris, Maseratis and Lamborghinis that pass my way.

Indeed, many businessmen may aspire to own one, or even a fleet, of these vehicles. To get there, however, you may find yourself in need of a different kind of engine.

Personalisation engines may not have crossed your path before, but it is a type of technology that many big businesses are taking advantage of, including Souq, BasharaCare, Amazon and eBay. But personalisation engines are not just available to large businesses.

Given the right amount of data; small businesses can take advantage of the technology as well.

Those advantages can be great, being able to know exactly what your customers are likely to buy now, as well as in the future, can help you in promoting, pricing and even placing your products. A personalisation engine is a series of different algorithms that uses the data you give it to come up with insights on a customer’s current and future purchase patterns.

Every moment your customers interact with your business they are creating data. From their online browsing, to their purchases, loyalty card and social media data, every engagement with your business can be fed into a personalisation engine to help you recommend products to your customers.

This level of personalisation is the kind of thing business leaders dream about. It may be possible to remember and build a relationship with a couple of regular customers, but if you’ve got hundreds of them, knowing their tastes, wants and needs is next to impossible.

A personalisation engine helps you with this. It allows you to give the kind of recommendations to a customer that they would expect from a well-informed friend. A personalisation engine makes your customers see you as less of a peddler and more of a peer.

The true power with personalisation engines doesn’t come when they recommend common sense items to customers. It’s easy to say that a gentleman buying a new pair of shoes

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A personalisation engine is a series of different algorithms that uses the data you give it to come up with insights on a customer’s current and future purchase patterns.”

– Guy Marson, Co-Founder and Managing Director, Profusion may also be interested in polish. What would set your business apart is realising that gentlemen with similar interests to this particular individual, often buy some new gloves to go with the shoes. These insights add value to the customer’s interaction with you, and are not immediately obvious to even the most seasoned businessperson.

Making some slightly left-field recommendations to a customer could end up paying dividends. These recommendations help diversify your product and service offering, making the customer aware of other items they can purchase from your company. Likewise, providing this level of personalisation and recommendations a customer finds useful greatly strengthens your relationship with that individual.

Before you look at bringing personalisation engine technology into your business, it’s worth understanding how it all works. There are three different types of personalisation engine available; each works in slightly different ways and the way you pick one is to first look at your business needs.

The first type of engine works through a technique known as collaborative filtering. To use this engine, you first need to collect a large amount of data on your customers’ interactions with your business. This includes their purchase history and when they bought items from you, along with whether they purchased online or offline and any other engagements they’ve had with your company. This data is compiled and then used to predict what your customers are likely to buy based on others with similar demographics and behaviour.

The second engine works through content-based filtering and this relies on keywords that are used to describe individual products. Profiles are built around each customer that then indicates what products they may be interested in, according to the keywords used. So if I bought a shirt from a clothing retailer and the keywords used to describe that shirt were ‘floral’, ‘office’ and ‘Dolce & Gabbana’, the personalisation engine may then recommend me suits or other floral shirts from Dolce & Gabbana and other high end brands. Recommendations using this method can also be made through the ratings a customer gives on other products.

The third engine is a combination of the first and second. In some cases, this approach can be the most effective, taking the best of both methods and helping to cancel out the weaknesses in each. That said, the approach you choose is very dependent on your individual business aims and circumstances.

On the subject of weaknesses, there are a couple of issues to consider when implementing personalisation engine technology. The largest of these is known as the cold-start problem. Just like how a car engine requires fuel, a personalisation needs data to get going.

If it doesn’t have enough data to crunch, it cannot recommend items accurately.

The cold-start problem can partly be mitigated by choosing the contentbased filtering approach–if items are classified well. Potential customers will then have to list their preferences when they first engage with your business, say, when they are setting up an account, and the engine will match

these up with the products’ keywords.

The same customers could then review the recommendations they receive in a simple feedback process that will help the engine learn from its successes and failures.

Incidentally, it is this form of feedback, where the personalisation engine is constantly being refined through knowing whether a customer liked its recommendations or not, that is one of the main selling points for the engine. Once you plug it in, the engine will continue to learn and build itself up to pinpoint accuracy, specifically for your customers.

Another issue could arise if a personalisation engine isn’t set up correctly. Just like a car engine, you’ll need specialists in the beginning to help you build your personalisation engine. If it isn’t set up with the right data from the beginning, then it could give recommendations that aren’t right for your customers, or that are blindingly obvious. Suggesting a phone case to someone who has just bought a smartphone wouldn’t necessarily be useful, but suggesting they buy Bluetooth headphones because other smartphone users have also purchased them, may be something they hadn’t considered before and they ultimately end up purchasing.

Many businesses are yet to uncover the opportunities offered through using personalisation engines, and many are put off by the idea that only large companies can use a personalisation engine. However, with the right method and data, all businesses can benefit from personalisation engines and the customer satisfaction and loyalty they deliver.

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BEHIND THE SCENES

Stevi Lowmass Founder, The Camel Soap Company

Stevi Lowmass began making camel milk soaps in her kitchen as a hobby. After making and selling about 70 bars of soap at a school fair five years ago, she knew she could turn her pastime into a business. She registered the business formally in 2013, and has seen consistent year-on-year growth since then.

Stevi Lowmass

The company has just launched a lip balm and a camel milk cream, which was developed

by Shirley Conlon, of Shirley Conlon Organics. She works with The Camel Soap Company, under its licence.

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"I used to buy milk from Spinney’s and Carrefour because I was only buying about half a dozen or a dozen at a time; as we got a bit bigger it was apparent that I needed to buy more. Union Co-Op in Al Barsha Mall gets their milk delivered on a Sunday morning. I would go them and buy around 40 bottles. Eventually I phoned the supplier, The Emirates Industry for Camel Milk Processing, directly, and they’ve become a key part of our supply chain. They deliver milk to us from the farm once a week; we are on the same delivery route as the Co-Op. We buy approximately 200 litres a week and that number has been steadily climbing. The facility, on Al Ain road, is beautiful and clean, and the company also supplies the royal house hold.”

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The original range was made only from olive oil and camel milk and essential oils. Those soaps use good quality essential oils. That is the recommended range for consumers with skin conditions. There are now eight in that range– one unscented and seven are scented.

“I cannot pay massive salaries, so I try to compensate by having a really nice working environment. I try to find people who share my values–they work hard, they really care about what they do, and they care about the sustainability model we are trying to achieve. We use very little electricity and water, and we create no waste because we recycle everything. Now I have the most wonderful team, who all work independently, and hopefully they will grow with the company.”

s been oaps haren. s d e t n e d of unscecially for chil A range esp

" The first counterfeit product surfaced about two years ago. A friend of mine sent me a photo of it and I noticed something odd. I zoomed into the photo as much as I could; the bag just did not look like the bags I use. I went to the Department of Economic Development (DED) and as luck would have it, a new gentleman had started on the job that day, so he was quite eager to assist me; he said they would conduct a raid the next day, and they did."

created

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LAST WORD

Fighting fraud

ENSURING ROBUST SOLUTIONS ARE AVAILABLE TO FINANCIAL INSTITUTIONS IS ALL IN A DAY’S WORK FOR IANA VOROTILO, REGIONAL SALES DIRECTOR, BPC BANKING TECHNOLOGIES huge interest in our solutions, which supports scalable nation-wide transaction flows and makes them transparent. Our loyalty programmes and card management solutions have also become popular with our clients.

What plans do you have for the business over the next 12 months?

We will place heavy focus on expansion by concentrating on growing our business footprint within industries such as telecoms and transportation.

What is your favourite book?

What does BPC do and what does your day-to-day job involve?

BPC Banking Technologies is a global leader in payment solutions. We are the developers and vendors of end-to-end payment solutions suite SmartVista, which is used by over 160 companies across the globe.

It is more than just a platform for processing; it covers varying aspects of all types of e-payments and data transactions. It serves the interests of organisations operating within the financial, retail, government, transport, microfinance and telco sectors.

In a nutshell, my day-today job involves liaising with various stakeholders within financial institutions, building and maintaining relationships with key personnel, understanding how BPC can meet their needs, and ensuring we meet their expectations and project deadlines.

What is the most challenging aspect of what you do?

We operate within a pretty complex industry. It is fast-paced and we need to stay ahead of our competitors by being innovative. But we also have to respond to the specific needs of the banks we work with. That’s what makes this job challenging.

What is the GCC market place like currently for solutions such as yours?

The market had been slow in the past, but banks have now started to realise they cannot continue serving their customers using old technology, because it’s becoming costly for them to do so and slows them down when responding to current market trends.

The rise in fraud, especially in the GCC region, has forced banks to look at modern, robust solutions.

The renewal of national switch and payment systems has also caused a

Shantaram by Gregory David Roberts.

Who do you consider a mentor and why?

Tony Robbins.

He motivates me.

What is your favourite holiday destination?

Anywhere with a beach.

What are your hobbies?

Yoga, kitesurfing and travelling.

Have you found the right work/life balance?

Not yet, but I’m working on it.

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CPI Mag Multip.BB W21cmXH27cm.pdf

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