SME Advisor Middle East | May 2013 by SME Advisor Middle East

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Beyond value

Where to next?

Getting staff whose values are the same as yours

The role of a Business Growth Audit

Art for art’s sake Why Shub Qureshi is backing top fashion talent

Don’t play dirty Your SME can’t afford to be a polluter

Spoilt for choice RoundMenu are setting the standard for online reservations

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We forget the basics at our peril...

ecently checking through my e-mails, I came across an announcement from a North American university here in Dubai, talking about a new entrepreneurship award and initiative. I realised that this was the fifth entrepreneurship feature I’d seen in the last week, and it made an interesting (and rather worrying) thought occur to me. Isn’t the GCC becoming rather obsessed with the role of the entrepreneur? Is this the result of an ‘entrepreneur as hero’ culture where students who would otherwise be young trainees believe that they can all become the next Richard Branson? Now, I’d be the first to say that a meritocracy is no bad thing - and good luck to those who can seize the prizes. I’m also all in favour of terrific, keynote events such as the du Entrepreneur’s Forum. The problem resides instead with colleges who cynically see that the appeal of ‘entrepreneurship’ and believe there’s rich territory to be milked here – because there’s an immense danger with creating a management culture where everyone wants to be a maverick business genius. Firstly, we’re in danger of forgetting the role of good old-fashioned management, which Peter Drucker described as ‘the most important function in all business” (and as the figure who re-built post-war Japan and created one of the world’s economic miracles, he knew a thing or two about the subject). Management isn’t about a swift path to the top: it’s about those at the top knowing how to manage you and I and getting the best results from the people on the ‘shop floor’. It’s about forging systems and processes that run like a Swiss watch month on month, year on year. Gung-ho and exciting? Not really. Fantastically important? Yes. Yet where are all the nitty-gritty management courses? The courses for logistics professionals, call centre managers, sales directors and international marketeers? These are the style of courses that will be of real, practical value to the ‘unseen’ economy, growing the all-important middle-class and cementing a really solid service sector. Interestingly, in this issue we feature the MBA programmes of one of the world’s leading business schools - and these lessons are not lost on them. Indeed, the role of practical business instruction is infused across every line of their messaging, just as it should be. In glorifying the role of the entrepreneur at the cost of the humble manager or ‘doer’, we forget what happened to the greatest of all entrepreneurs, Steve Jobs, when the 80s board of Apple said he couldn’t manage: he was fired.

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May 2013

Issue 90

May 2013

CONTENTS

GET EDUCATED

We speak to Hult International Business School’s Dean, Dr. Amanda Nimon Peters and Executive Director Robert Chater about the virtues of an MBA.

Editor’s note 03 Paul Godfrey on why we’re in danger of confusing the roles of leader and manager. SHOPTALK 10 News and developments impacting SMEs in the region. FINANCE FOCUS 14 The latest financing opportunities for SMEs and allied financial services. SME ABOUT TOWN 18

Key events attended by SME owners and managers.

BANKING FOR BUSINESS 22

An army of two: how SMEs can benefit from the market opportunities of a strategic alliance.

Movers & Shakers 24 Why Shub Qureshi’s cARTel is the best place for a young fashion designer to be.

28 May 2013

CONTENTS

Abed Bibi and Husain Makiya explain the motivation behind their ultimate online gifting platform, Yougotagift.com.

Managing Risk 32

Transacting business overseas: knowing the insurance basics.

It doesn’t pay to play dirty: make sure your SME stays on the right side of the region’s comprehensive anti-pollution laws.

Growth & Development 40

Simon Hodges, CEO of the Alchemy Network on the values of a Business Growth Audit.

Come to the edge… And fly! We speak to Hult International Business School’s Dean, Dr. Amanda Nimon Peters and Executive Director Robert Chater about the virtues of an MBA.

Workspace 48

Do you value Values? biz-group’s Rob Haden on how to recruit people who match the company’s core values.

Doing business 52 The China Sourcing Fair is a key forum for everyone wanting to source goods from the world’s new economic powerhouse. Marketing 54 Sam Katiela, Managing & Creative Director at Mamemo Productions, explains why events are king when to comes to building market profile. 56

The Social Media and Mobile marketing for Insurance Conference - and why it’s rich with lessons for SMEs.

Legal 58

The fast track to filing international patents, from leading law firm Al Tamimi.

Industry watch 62 The travel and tourism industry snapshot, from Booz and Company. 63

Why digital marketing is vital for SMEs.

The Dubai real estate market recovers.

Consumer optimism on the rise in the UAE.

Why Emirati graduates prefer government jobs.

Women in the UAE feel less opportunity for advancement than men.

TECHNOLOGY FOR BUSINESS 70 IT trends and tools that are reshaping business in the region. The next level… 76 When convenience (and the customer!) is king. We speak to Zaid Jawad and Ali Sinaei about the startling success of RoundMenu.

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SHOPTALK

UAE

Azerbaijan round table expands trade with Dubai

During the roundtable

roundtable discussion, Expanding trade between Dubai and Azerbaijan, was recently organised by the Dubai Chamber of Commerce and Industry’s International Representative Office in Azerbaijan. The attendees of the roundtable included Hassan Al Hashemi,

Director, External Relations, Dubai Chamber, Sanan Nasibli, Head of Dubai Chamber Representative Office in Azerbaijan, leading Azerbaijani importers and exporters, and representatives of logistics companies, Dubai franchisees, the UAE Embassy, the Ministry of Economic Development of Azerbaijan, and the

Azerbaijan Export and Investment Promotion Agency (AzPromo). Al Hashemi, in his welcome address, reiterated Dubai’s solid position as a world-class trade hub for the CIS, GCC, and Africa. He further stressed the significance of Azerbaijan as a strategic location for trade and business. He also expressed gratitude to the Ministry of Economic Development and AzPromo for partnership and support. Al Hashemi revealed Dubai Chamber’s plans to expand its international presence with 15-20 offices until 2016 in the CIS, Africa, and Asia mentioning that Africa and the CIS are very promising markets; and Dubai continues to be an excellent hub for crosscontinent trade to these regions. He highlighted the ease with which foreign investors can do business in Dubai with the provision of unconditional government support, businessfriendly laws, world-class

infrastructure, financial services and a high return business environment. Meanwhile, Rufat Mammadov, Acting President of AzPromo, commented that Azerbaijan has gone through a period of significant development and growth with overall trade up nine times and the non-oil trade up five times in the last 10 years. A presentation by Dubai Chamber showed that consumer electronics, IT and communications equipment have been the biggest export articles to Azerbaijan, whereas gold and aluminium, and lately oil and gas products have been import leads. An attendee highlighted the need to educate Azerbaijani importers of Dubai’s world-class manufacturing facilities as he said that the emirate is incorrectly perceived as a re-export hub and expressed his company’s intention to expand exports of Dubaimanufactured products to Azerbaijan.

UAE-Finland Business Forum explores investment

The UAE-Finland Business Forum

His Excellency Jyrki Katainen, Prime Minister of the Republic of Finland, lauded the strong bilateral partnership enjoyed by his country and the UAE, stating that both the economies are export driven and dependent on

foreign trade, enjoy strategic locations in their respective regions and can learn a lot from each other to further develop their common ideas on investments. “Both our countries are young nations and the remarkable development seen around in the UAE shows all the hard work that is gone in to making the country one of the most advanced economies in the world,” said HE Katainen. The Finnish Prime Minister was speaking at the UAE-Finland Business Forum organised by Dubai Chamber of Commerce and Industry in partnership with the Embassy of Finland in the UAE and FinPro, the

national trade, internationalisation and investment development organisation of Finland, at the Chamber’s headquarters. HE Katainen called for strengthening cooperation between the two countries stating that reexports accounted for 45 per cent of the country’s economy and called upon investors from the UAE and Finland to work together and to benefit from their respective strategic locations as Finland with its East meets West location provides an ideal gateway to many European Union countries including Sweden, Denmark, Germany, Poland, as well as Russia.

New initiatives for Emirati entrepreneurs

During the discussion

UAE

Shurooq welcomes Spanish delegation in Sharjah

Spanish delegation was received by the Sharjah Investment and Development Authority (Shurooq) with the goal of encouraging Spanish investment in Sharjah. During the meeting, Spanish representatives were introduced to Shurooq and the services offered by the Authority. Furthermore, they got a chance to familiarise themselves with the multitude of investment opportunities available in the four key investment sectors identified in Sharjah which are healthcare, travel and leisure, logistics and transportation, and the environment. The delegation was met by Shurooq CEO, His Excellency Marwan bin Jassim Al Sarkal, Shurooq COO Ahmed Obaid Al Qaseer, Director of Business Development at Shurooq, Elie Armaly, and Head of Investment Promotion at Shurooq, Mohamed Juma Al Musharrkh. Al Sarkal emphasised the distinguished relationship between the UAE and Spain; the UAE is among Spain’s major trading partners in the Gulf region, with their trade exchange growing 0.9 per cent from USD 1119.3 million in 2009 to USD 1129.1 million in 2011.

Encouraging more Spanish companies to invest in Sharjah, Shurooq’s CEO stressed on Sharjah’s dynamic business environment, the emirate’s market oriented economy in combination with the many government incentives to industrial and business activities making Sharjah an ideal destination for Spanish investors. “Maintaining and expanding trade relations has always been one of our key priorities, and we were very pleased to receive our Spanish friends to discuss and explore means of cooperation,” he said. “Non-oil trade between the UAE and Spain grew 21 per cent to more than USD 1.4 billion (AED 5.14 billion) in 2011, and we believe that despite the current economic turmoil in Europe there is great potential for further strengthening our relationship.” Established in 2009, Shurooq aims to achieve social, cultural, environmental and economic development on the basis of Sharjah’s distinct Arab and Islamic identity, and to encourage investment by adopting the best international standards in providing quality services that help attract investors from the region and the world.

In a recent initiative to empower new businesses and SMEs, the Mohammed Bin Rashid Fund (MBRF) in Dubai SME, the agency of the Department of Economic Development (DED) mandated to develop the small and medium enterprise (SME) sector, launched two programmes for Emirati entrepreneurs; a Seed fund for early stage businesses and a Credit Guarantee Scheme (CGS) for growth-oriented SMEs. MBRF has opened two funding windows to achieve the mandate of His Highness Sheikh Mohammed Bin Rashid Al Maktoum, UAE Vice President and Prime Minister and Ruler of Dubai to provide early stage seed capital interest free loans up to AED 250,000 to entrepreneurs implementing businesses resident in the business incubator on achievement of business milestones, and business loans and financial guarantees for projects in partnership with banks. These funding windows are designed based on the various entrepreneurial stages and needs. The Seed fund aims to convert ideas into businesses by testing them in the marketplace. MBRF looks to form partnerships with banks to provide due diligence based on business plans as part of the Credit Guarantee Scheme. Abdul Baset Al Janahi, Chief Executive Officer of Dubai SME, commented: “The Mohammed Bin Rashid Fund will lead to a sea change in the UAE’s SME domain. It will inspire more Emiratis to take the entrepreneurial route and help SMEs learn how to evolve into reliable and sustainable enterprises. The end result will be a new perception on SMEs and more SME success stories.” “MBRF is a perfect fit in the evolving SME ecosystem Dubai SME has been developing since its inception. It is also founded on the same principle of stimulating business ideas and integrating best practices within the SME community to facilitate access to capital and markets, which forms the cornerstone of our initiatives such as Dubai SME100 ranking,” added Al Janahi. The fund will prove to be a catalyst to the mandate of Dubai SME; provide financial support to develop entrepreneurship among the nationals by encouraging them to by establish and manage businesses, encouraging nationals to be selfemployed by entering the private enterprise sector. The MBRF will also provide financial support to existing businesses of nationals helping the businesses grow.

May 2013

SHOPTALK

UAE

du to bolster entrepreneurship

During the ceremony

he Entrepreneur Plan will now be offered by du to new business licence applicants. This comes following du’s new strategic marketing agreement with On Time Group. The agreement was signed by Farid Faraidooni, Chief Commercial Officer, du, and Waleid Abdulkareim Mohammed, CEO of On Time Group, in the presence of Abdul Baset Al Janahi, CEO of Dubai SME. As part of the agreement, On Time will offer du’s Entrepreneur Plan to all customers registering for new business licences, in addition to promoting the

telecom’s mobile and fixed services across the UAE. Abdul Baset Al Janahi said: “This is a significant development for the small and medium enterprise community. I am confident that it will have a positive effect on UAE’s entrepreneurial ecosystem. Convenience is a priority to new business owners because time is one of their most precious commodities. This partnership sees the coming together of two convenience-enhancing services that will truly benefit all new business licence applicants.” Faraidooni added: “Having a strong communication solution is essential in order to progress as a company in today’s socially-driven environment, which is why we have chosen to partner with On Time. There is a strong synergy between our common approaches to aid entrepreneurs and businesses in the UAE by providing them with the tools they

KSA

Apex-Brasil explores export prospects in KSA A Focus Market seminar in São Paulo, Brazil, provided a platform to discuss opportunities for Brazilian exporters to expand their market presence in the Kingdom of Saudi Arabia. The Brazilian Trade and Investment Promotion Agency (Apex-Brasil), in collaboration with the National Confederation of Industries (CNI), the Federation of Industries of the State of São Paulo (Fiesp) and the Arab Brazilian Chamber of Commerce (ABCC), concluded the seminar.

The seminar was organised with the main aim to offer strategic support to Brazilian exporters who are looking for new business prospects in the Kingdom of Saudi Arabia. Valuable information about local market dynamics, the preferred ways of dealing with clients, forms for promotion and cultural sensitivities to be observed was also provided. The Brazilian Ministry of Development, Industry and Foreign Trade, valued Brazilian exports to KSA at USD three billion in the year 2012, further underlining

need, at a higher level of convenience and with more value. Our services offer value for money and peace of mind, making this the ideal partnership to benefit the UAE’s business community.” Waleid Abdulkareim Mohammed stated that the On Time family is delighted to extend their partnership with du. “We, at On Time, aim to save our business owners with both time and money. We aspire to provide our clients with utmost convenience. Each of our offices in 18 different locations across Dubai provide more than 250 government services, all under one roof, ably supported by over 200 employees. Today, our customers can also benefit from the value-added proposition that is du’s Entrepreneur Plan.” The Entrepreneur Plan was launched by du in October 2012, as a communications solution tailored specifically to meet the needs of small and medium enterprise (SME) customers. It combines fixed, mobile and cloud-based services to the benefit of UAE SMEs, offering mobile voice and data, online presence, and collaboration for startups all in one convenient package.

the strong trade relations between the two countries. Furthermore, a current figure of about 585 companies export various products, including chicken, sugar, maize, iron ore and soy among other items, to KSA. Mauricio Borges, President of Apex-Brasil, commented: “Saudi Arabia has been a major destination of Brazilian products and we are seeing more opportunities to further expand trade activities between the two countries, particularly in the areas of food, beverages, agribusiness, fashion, housing and civil construction. A growing number of exporters from Brazil are therefore taking advantage of the strong demand for Brazilian products as well as the robust trade relations to establish their presence within the

KSA market. This seminar underlines the strategic importance of Apex-Brasil in promoting the sustained growth of trade activities between Brazil and Saudi Arabia.” The speakers at the seminar included Michel Alaby, General Secretary and CEO of Arab Brazilian Chamber of Commerce; Juarez Leal, Market Strategy Unit at Apex-Brasil; Marcos Lélis, Commercial Intelligence Unit at Apex; Sidney Alves Costa, Manager of the Apex Business Centre in the Middle East; Alain Wehbe, Account Manager at Chocolates Garoto in the Middle East, Africa and Asia; Brazilian entrepreneur Omar Hamaoui; and Edward James, Director of Meed Insight, MEED’s media and market intelligence area.

KSA

Training initiatives for KSA graduates

recent Memorandum of Understanding (MoU) signed between Saudia and SAP revealed plans to establish a unique Competency Centre at King Abdullah Economic City. The joint initiative will endeavour to prepare Saudi graduates for the job market through teaching essential business, IT and leadership skills. Training will encompass everything from negotiation and communication to conflict management and design thinking. Moreover, the initiative will offer SAP certifications on core business and industry solutions. Expert guidance will be provided by SAP, a business

Khaled Daou, Project Manager of Saudi Energy at Riyadh Exhibitions Company

software company, during the centre’s IT hardware and software set up. This will include the Marawed initiative whereby promising graduates across the MENA

Women entrepreneurs in Saudi Arabia? A new research by the Women’s Entrepreneurship Initiative, a nonprofit company that supports women in business, in collaboration with the Ashridge Business School, revealed that a small but growing number of women in Saudi Arabia are actively challenging the status quo. Regulatory, educational and socio-cultural changes are required urgently to promote women’s entrepreneurship. Although Saudi women are more economically active than often perceived internationally and opportunities for economic participation are increasing, the report ‘Giving voice to women entrepreneurs in Saudi Arabia’ confirms women remain vastly under-represented in the vital entrepreneurial sector. Kelly Lavelle, Founding Director, Women’s Entrepreneurship Initiative, and report co-author, said: “One of the distinctive features of this work is its positive impact on many of the women who participated. The strength of their responses has been the driver to establish the Women’s Entrepreneurship Initiative (WEI) across the Middle East and North Africa region to learn, serve and enable change. Now, more than ever, the world needs to unleash women’s entrepreneurship to further strengthen economies and societies.”

region will be assisted to gain SAP certifications through both viral and hands-on project experience. Cutting edge facilities, strategic position between the East and the West, and peerless ability to interact with the region’s largest economy are the prime reasons that make King Abdullah Economic City an ideal locale for the Competency Centre. It is predicted that the city will be the size of Washington DC when finished in 2025. The USD 100 billion project will prove to be a catalyst in the growth of the Kingdom’s tourism, logistics, energy, transportation and manufacturing sectors. Saudia has already committed to moving 1000 employees to its Smart Technology Hub in King Abdullah Economic City. “Saudi Arabia needs to continue strengthening its ability to create sustainable high-tech jobs, and Saudia is determined to do everything

it can to support this process,” said His Excellency Eng. Khalid Abdullah Almolhem, DirectorGeneral, Saudia. “By training the best and brightest in vital business and IT skills, we are laying the groundwork for jobs that can not only benefit individuals but also entire industries and the economy.” Government statistics prove that this move to empower young graduates by SAP and Saudia comes at a valuable time for the Kingdom with more than two-thirds of Saudis being under 30, and nearly threequarters of all unemployed Saudis being in their 20s. The MoU will also entail SAP sharing aviation industryspecific best practice to help Saudia support its operations across the board. In addition, the MoU will explore how both Saudia and the Kingdom can benefit from the potential creation of a Saudi Arabian arm of SAP’s Training and Development Institute.

The research suggests women entrepreneurs lack essential competencies and capacities for successful entrepreneurship, including: Self-confidence - Saudi women entrepreneurs can present themselves as confident but often suffer from an underlying lack of self-belief evidenced by hesitation in decision making, avoidance of commitment and a strong fear of judgment and failure. Risk-taking - Female entrepreneurs show courage in following their chosen career path, but are however averse to assuming tangible risks e.g. leaving the security and status of government jobs or seeking external funding for their businesses. Autonomy - A lack of self-reliance, self-sufficiency and personal initiative, often resulting from social restrictions imposed upon women. This can be internalised to such an extent that they become complacent, if not complicit, in their situation. Self-esteem: The women interviewed experienced powerful emotional reactions to the gender-specific challenges they face. They express feelings of frustration, outrage, helplessness and/or self-blame at their lack of autonomy. They also have a powerful fear of judgment and failure. The Saudi Arabian government has committed to ambitious targets to enhance the economic activity of women and the opportunity for women to play a more prominent role in the Saudi economy has never been greater, with a comprehensive policy addressing women’s participation in the entrepreneurship sector pending.

May 2013

FINANCE FOCUS

New financing solutions for SMEs

former Goldman Sachs investment banking executive for MENA, Brandon Short, is all set to form World Business Partners UAE (WBP). World Business Partners UAE will offer a Shariah-compliant financing solution ranging from AED 35,000 to AED 1.5 million for small businesses seeking working capital. WBP’s ijara asset sale-leaseback programme allows SMEs to use the cash equity of their existing assets to fund their businesses’ growth and expansion. The small business finance company, based in Dubai, will be a joint partnership with Short and his two partners. The other co-founders of WBP are Doug Naidus, former Managing Director and Global Head of the Residential Lending Division of Deutsche Bank, and former Chairman and CEO of MortgageIT, and Alex Gemici, former Managing Director and Head of MENA Residential Finance for Deutsche Bank. Short will be WBP’s President while Naidus will take on the position of Chairman at WBP.

Gemici, on the other hand, will be the Managing Partner of WBP. In order to expedite the launch of its programme, WBP has secured a services agreement with World Business Lenders whereby World Business Lenders will provide substantial operational support to WBP. “I am excited to join a partnership with a proven and accomplished management team,” said Brandon Short, President of WBP. “The SME market is under-served and, as such, has substantial demand for financing. We have already identified over 200,000 SMEs in the UAE alone that could participate in our programme. Our client’s business is the focal point for our funding decisions. Instead of focusing on personal assets or the business owner’s credit rating, we look at the history and financial performance of the business.” Under the programme, WBP will purchase assets from the SME for an upfront payment and then lease back these assets to the business on a rent-to-own basis over what is usually a six-month term. During that time, the business maintains possession and has full use of the assets. At the end of the lease, ownership of the assets transfers back to the business. “SMEs control 99% of the business sector worldwide and account for 50% of the world’s GDP. Today, access to capital and credit remains to be one of

the most significant issues facing small businesses globally,” said Doug Naidus, Chairman of WBP. “We would like to address this problem internationally – starting with the GCC due to its growing economic importance. I am very pleased to be collaborating with Brandon Short as he leads this effort with his local Dubai presence, and adds his depth of experience and knowledge.” Unlike banks, WBP will not require business plans or financial statements. To qualify, businesses need to provide information on the assets that WBP will buy and lease back, as well as business bank statements for the past 12 months. WBP will base its decisions primarily on the cash flow of the business. “The GCC has over one million SMEs and a substantial demand for financing,” said Alex Gemici, Managing Partner of WBP. “In these challenging times for small business financing, our programme allows SMEs to tap into the inherent cash value of their assets.” WBP’s asset sale-leaseback programme is ideal for retailers, such as grocery stores, dry cleaners, gas stations and electronics stores, as well as bakeries, delis and fast food restaurants. WBP also will work with a variety of service companies, including Web developers, accounting and legal practices, medical offices, private schools, auto repair shops and information technology providers.

Capital markets in the region

Phil Gandier, MENA Head of Transaction Advisory Services, Ernst and Young

Ernst and Young’s 2013 Q1 MENA IPO update reported that regional capital markets recorded a twentyfold increase in capital raised

and a 25% decrease in deal volume in Q1’13 (3 IPOs, raising approximately USD 1.6 billion in proceeds), compared to Q1’12 (4 IPOs, raising USD 82.8 million in proceeds). The three regional IPOs in Q1’13 represented a 374.3% increase from the USD 339.8 million raised in the previous quarter, Q4’12. Phil Gandier, MENA Head of Transaction Advisory Services, Ernst & Young, says: “Q1’13 posted the strongest results for the first quarter of the year since 2008. However, the majority of the

value is attributed to a large ticket telecommunications IPO in Iraq. This sector is traditionally associated with large value transactions and the high Q1 performance will be sustainable if we start to see similar large value transactions on a regular basis which would bolster the regions capital markets.” Two IPOs came to market in Saudi Arabia while one was reported in Iraq. The largest issuance was in Iraq, with Asiacell Communications raising USD 1.3 billion, followed by

Northern Region Cement Company in Saudi Arabia that raised USD 240 million and National Medical Care Company in Saudi Arabia that raised USD 97.2 million. “Over 40% of investors in the Middle East and Africa stated a preference to invest overseas, as evidenced in Ernst and Young’s recent institutional investor study. Therefore, the challenge remains whereby more domestic deal activity would be a key driver for stronger IPO activity and growth in the MENA region,” concluded Phil.

Capital investment in construction escalates

otal capital investment in construction and infrastructure is expected to increase dramatically. According to research by Business Monitor

International (BMI), total capital investment in construction and infrastructure in the UAE is set to reach AED 480.7 billion (USD 131.7 billion) by 2016, a near doubling

Economic snapshot 2013 A macro-economic briefing session, Transforming, Rebalancing, and Outperforming, was recently held by Standard Chartered in Dubai. Exclusive to Standard Chartered clients, the session had a cohesive programme that provided an in-depth insight and analysis on the global, regional, and local economic outlook as well as the financial picture for the year ahead. At the session, Marios Maratheftis, Head of Macro Research, Standard Chartered Bank, and Samiran Chakraborty, Head of Research, India, Standard Chartered Bank discussed the implications of the transformation that the world is going through on the business environment in the MENAP region. This transformation is partially driven by the deleveraging of the West and the increasing reliance of Asia on its regional drivers of growth, making the old models of growth obsolete. As China and Asia are looking to rebalance their economies, there are risks, especially when it comes to politics and policy. However,

from the AED 284.4 billion (USD 77.4 billion) invested in 2011. By 2016, the sector is expected to form 24.4% of the country’s GDP, underlining the importance in the overall development of the economy.* The growing level of investment and interest in the rapidly expanding infrastructure sector is expected to impact favourably on the demand for fresh supplies of hardware, tools, building material and machinery, according to Epoc Messe Frankfurt, organiser of Hardware+Tools Middle East, a trade fair for tools, material and machinery. “The creation of new infrastructure is vital for a country to meet the requirements of a growing economy and to cater to anticipated future needs,”

the world economy will continue to grow, and growth in 2013 will probably exceed last year’s figures. Sami Mahfouz, Head of Global Markets and Co-Head of Wholesale Banking Standard Chartered UAE, said: “In light of economic, political and fiscal uncertainties, it is vital for businesses today to make informed decisions based on information from trusted advisors that have strong global and local understanding of business and economic dynamics. This briefing session forms an ideal platform for our clients to closely interact with our economists and senior bank representatives to get specific insights into the latest developments affecting their business, and opportunities present in the regional and global markets and outlook on the global and regional economy.” MENA Economic highlights: • MENA growth dynamics are diverging. Oil exporters are benefiting from strong oil prices, which will underpin spending plans for 2013. Non-oil exporters face a more challenging fiscal reality this year. Inflation is selectively picking up. Interregional fiscal co-operation is growing.

said Ahmed Pauwels, CEO of Epoc Messe Frankfurt. “By showcasing a range of the latest offerings in tools, building supplies and machinery from international manufacturers right here in the UAE, and highlighting the latest industry trends, Hardware+Tools Middle East continues to play its part in the development of the regional industry,” he added. Apart from the ongoing creation of a vast new transport infrastructure of roads, railway and new airport terminals, additional plans are already in the pipeline for the construction of at least 12,500 houses as part of a massive government housing project according to the Business Monitor International Report. * UAE Infrastructure Report, Q1 2013, Business Monitor International

• Saudi Arabia’s strong spending trends show no signs of abating; planned spending is up again in 2013, underpinned by high oil prices and a record surplus for 2012. A mortgage law is likely this year; this is positive in the medium term, though it might drive a near-term housing crunch. Energy efficiency is a policy priority this year. • Abu Dhabi is investing in its own economy once again. Dubai’s non-oil economy is outperforming, underpinned by regional trade flows and its safe-haven status. Credit growth should begin to improve following more than four years of very tight conditions. • In Qatar, projects related to FIFA 2022 are beginning. Inflation may be a concern, especially as spending outlays materialise this year. The LNG sector is back in focus, with policy makers addressing long-term challenges. • In Egypt, progress on necessary subsidy reform is slow amid an uncertain political environment and prolonged discussions with the IMF. A balance of payments deficit, falling reserves and a consequently weaker currency heighten the need to secure IMF funding.

May 2013

FINANCE FOCUS

Need of the hour: Green energy investments

nvestments in green energy are crucial for GCC states to continue being positioned as the leading energy bloc particularly in the event of oil and gas price reversal, according to Giel-Jan Van der Tol, General Manager – Wholesale Banking, Emirates NBD. Van der Tol, stressed the importance of ‘being ahead of the curve in green energy investments,’ during his presentation at the Dubai Global Energy Forum. Organised by the Dubai Supreme Council of Energy, the Dubai Global Energy Forum 2013 aimed to provide a

platform for energy leaders and experts to exchange views on emerging regional and global issues related to energy policies, programmes, technologies and investment opportunities. Van der Tol also called for strong governmental support to building green opportunities in the Gulf, through various joint initiatives like establishing grid connectivity, sovereign support schemes and sovereign supported Green Fund, which would assist in promoting investments in Green Energy projects. “Renewable energy sources are crucial for developing sustainable economies, and they can be extremely helpful as practical alternatives to damaging carbon-intensive fuels,” said Van der Tol. “The UAE, without doubt, is taking great strides towards the creation of infrastructure for sustainable development, and as the leading financial services provider, Emirates NBD is committed to supporting the country’s global role in finding practical solutions to the world’s energy challenges.” Providing finance for investments in the green energy sector is a strategic component of Emirates NBD Wholesale Bank’s strategy

Ministry of Finance introduces new services

During the signing

The Ministry of Finance (MoF) has signed an agreement with Dubai eGovernment Department for the eDirham G2 services to be adopted as a tool for collection of government entity fees in Dubai. The agreement was signed by His Excellency Younis Haji Al Khouri, Under-Secretary of Ministry of Finance, and His Excellency

Ahmad Bin Humaidan, Director General of Dubai eGovernment at the Ministry of Finance headquarters in implementation of its strategic plan to expand the network of federal and local government entities using the eDirham system. Now, a total of three electronic payment methods are provided by Dubai

to grow its loan book and become the banking powerhouse in the region. Outlining the important drivers for renewable energy investments in the Middle East, Van der Tol said that the region’s geographical presence holds strong potential opportunities from climatic perspective for both solar and wind energy. “Not only do such alternate energy investments promote greener regional environment and share in reduction of global warming, they could also provide significant employment opportunities while widening the economic base.” Identifying some of the challenges to regional investment in green energy such as the cost competitiveness of green energy versus conventional energy, the financing challenges and the need for green energy incentives, Van der Tol emphasised the significance of governmental support. Underlining that implicit fuel subsidies keep GCC energy prices significantly lower to fuel at market prices, he explained that investors often shy away from the green energy sector because of the high capital investment and operations and maintenance costs.

Government to people in the public and private sectors. The other two methods are credit cards and direct debit from customer’s account. These can be used for payment towards: Dubai Electricity and Water Authority’s bills, licence renewal fees, medical fitness certificate fees, healthcare facility licence renewal fees from Dubai Healthcare Authority, Dubai Police fines, recharging Salik or Nol and making a donation to Dubai Cares. HE Ahmad Bin Humaidan, Director General of Dubai eGovernment, said: “Dubai eGovernment always seeks to offer innovative methods to make it easy for the public, both individuals and businesses, to complete their transactions and pay for their government services in such a manner that saves their time and efforts in line with our

main objective of ‘customer first’. While this agreement with the Ministry of Finance is a quantum leap in this connection, the fact that the eDirham is linked with other global payment networks and offers new and diverse online payment methods and channels that suit all sections and categories of people has led the standard of service provided to the public to be upgraded through an integrated online payment system in the UAE.” Bin Humaidan added: “Signing this agreement with the Ministry of Finance is an example of our co-operation with the federal entities in the implementation of the directives of His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, to change the UAE into an eCountry.”

May 2013

SME ABOUT TOWN

DBWC holds cross networking event

During the event

ubai Business Women Council (DBWC), in association with Women In Network (WIN) by the French Business Council (FBC) in Dubai and Northern Emirates, organised a special cross networking event that brought together members from both groups, and presented a platform for them to discuss and share their views about various aspects related to entrepreneurship in the UAE. The event provided an excellent opportunity for participants to gain a better

insight of the services, objectives and achievements of WIN and DBWC. Raja Al Gurg, President of DBWC, spoke about the event, “Women In Network by the French Business Council and DBWC share a common goal of empowering business women through an array of well-structured and high-impact initiatives held throughout the year. Therefore, this cross networking event presented the perfect setting for two likeminded organisations to come

SMEs benefit from the Business Factory expo Heels and Deals held the Business Factory, a business expo for entrepreneurs, aspiring entrepreneurs and business owners. The event aimed to provide support to all SME businesses and new ventures across the UAE. The event was supported by more than sixty professional businesses from a range of industries in the UAE that offered help, guidance and support in key areas of business startup, development and growth. Furthermore, the event included; topical and inspirational workshops with key businesses, networking and one-to-one mentoring sessions with seasoned professionals. Stevi Lowmass, Managing Director of Heels & Deals Dubai and Founder of the UAE Business Factory, commented: “We’ve never had anything like this before, and I’m proud to bring the event to the UAE. Two questions that I’m frequently asked are ‘Where do I go to do this?’ and ‘Who can I use to do that?’ and this event was conceived to solve these problems. It is a one-stop-shop where entrepreneurs,

together and familiarise their members with the mission, services and accomplishments of the two entities. It also enabled the attendees to discuss emerging challenges and opportunities for women entrepreneurs in the country, while also helping them gain insights from the inspiring talks during the event.” One of the speakers at the event, Julie Leblan, Founder and President of WIN, shared her experiences with the audience. Leblan is also a solicitor who has practiced in Paris. “We are pleased to collaborate with the Dubai Business Women Council for this cross networking event, which complements the range of activities that WIN regularly organises in Dubai, right from networking events and lectures from business experts to highly focussed training sessions for our members. We look forward to

working together with DBWC on similar initiatives in the future with the underlining goal of empowering women entrepreneurs in the country. The event also gave me an opportunity to share my experience as an entrepreneur after making a switch from a career as a solicitor, and I hope the participants at the event found it insightful and inspiring,” said Leblan. Isabelle Leroy, Managing Director of the French Business Council, said, “Creating invaluable networking opportunities remains at the core of FBC’s objectives. We organise more than 60 events a year, ranging from conferences and trade missions to workshops and social gatherings, all with the primary goal of facilitating useful networking avenues for our members. This partnership with Dubai Business Women Council to organise a joint event has certainly proved extremely productive for the members of DBWC and WIN, which is an integral facet of FBC.”

would-be entrepreneurs and small business owners could come to and speak to a selection of companies who have been recommended as the best in their field.” The diverse range of exhibitors at the Business Factory covered the full business life cycle, from banking, money, and advice on free zones and visas, to virtual assistants, office space, branding, social media, web, coaching, investment and health. Krysta Fox, Director of the JLT Free Zone, DMCC, says: “There are over 6,300 companies operating at the JLT Free Zone today with 200 registering with us each month. A significant number of our members are from the SME or startup sector, and as a Government of Dubai Authority, we are constantly looking at new products, services and initiatives to assist them with establishing and growing their business. We are pleased to support the Business Factory and to share our expertise with SMEs so that they can develop in this region and beyond.” Ayman Al Awadhi, CBS Co-Founder and Managing Director says: “CBS, an Emirati firm in business setup and company formation solutions, is proud to be participating in the Business Factory event, where business owners and startups come together to find out what’s out there in terms of solutions that will help their business operations to grow and sustain.”

UAE businesswomen receive praise

Nazek Al Sabbagh, Founder of the UAE brand Zari O’ Breesam

he Arab Women in the Global Economy Forum 2013, held in London with the support of

Arab British Chamber of Commerce and the cooperation of Council of Arab Economic Unity, saw the participation of Nazek Al Sabbagh, Founder of the UAE brand Zari O’ Breesam. The forum highlighted the rapidly growing role of UAE businesswomen in launching brands and was attended by international audiences including ministers, diplomats, public policy leaders, business executives, heads of NGOs, academics and journalists. Furthermore, it showcased the achievements of Gulf women and UAE women particularly, with the strategic drive of the UAE government in accelerating the pace towards knowledge economy and encouraging the private sector to take a leading role in the economy by providing an ideal working environment, backed

Tamakkan seminar motivates entrepreneurs Tamakkan, a social initiative aimed at nurturing entrepreneurship, leadership and innovation, organised a seminar urging entrepreneurs to break their routine habits and embrace a sense of adventure in their business style. The seminar featured thought leaders, entrepreneurs and poets. Julie Lewis, Founder of Mountain High, thriller novelist Seumas Gallacher, entrepreneur Younis al Sulaimi, and a posse of local and international poets, led by award winning slam poet Paul D’ Rogers were seen attending the event. Inspirational speaker, Lewis, spoke about her recent expedition to Antarctica with women breast cancer survivors and the impact such a

journey could have on one’s perspective of life. “Climbing a mountain is much like a business, you have to set your goals and open up your thinking to new experiences.” She advised entrepreneurs to be more courageous and to continually readjust their mental markers to explore new ways of thinking. She also showed a short film of the women’s expedition aimed at raising awareness about breast cancer. Thriller novelist Seumas Gallacher spoke about his experiences in selfpublishing. He explained how he wrote his books, distributed them and continues to market them through local bookstores, in addition to, Amazon’s online bookstore. “I believe in two kinds of days; good days and better days. As an

by world-class infrastructure and communications network. Founder of the Zari O’ Breesam brand, Al Sabbagh has, in a very short period of time, established her brand as a strong retail fashion brand in the UAE; and is now looking at expanding its footprint towards Europe. “I was pleased to take part in this forum that highlighted the role of UAE women and created a communications bridge with European women,” expressed Al Sabbagh. Addressing the conference, she said that UAE’s unique working environment and the integration of the local retail sector with global players would play a pivotal role in several UAE brands going global within a few years. She credited the success of the UAE brands to the robust nature of the UAE retail sector which is registering remarkable annual growth. Al Sabbagh also hailed the role of the UAE embassy in the UK in driving this event.

entrepreneur, you should – try, make mistakes, and try again. Giving up is not an option.” Sana Bagersh, Founder, Tamakkan, stressed the need for entrepreneurs to continue learning and growing, by exploring all sources of information and inspiration. “At Tamakkan we see the growth of the entrepreneurial spirit as something that extends well beyond business, and extending into the realms of spiritual enrichment and creative exploration.” Younis al Sulaimi, an Emirati entrepreneur whose 3D printing business is supported by the UAE’s Khalifa Fund, offered an insightful view into the challenges and opportunities associated with setting up a technological venture. “It has been a rewarding experience and the entire team is very enthusiastic about the future of 3D printing. Being a

forerunner in a new business area comes with a lot of difficulties, and the main one is that you can’t start marketing the usual way, you first have to educate people, and that is something that takes a lot of time.” Tamakkan, which also promotes innovation and artistic creativity, included slam poetry sessions by three up and coming poets in the programme: Arab-American Sara Al Souqi, Canadian-Arab Haitham Haze and American Matthew “Cuban” Hernandez. Al Souqi presented a touching poem that she dedicated to a former basketball coach in the US who advised her not to play the game because of her ‘hijab’. She implored him through her words to see beyond her headdress to recognise her talent. Hernandez, through his poem, spoke about race relations and poverty, while Haze spoke about the power of words to unite people.

May 2013

SME ABOUT TOWN

Bolstering innovation and creative ideas

L-R: Feryal Tawakul, Chairperson, Ideas.Arabia Subgroup of DQG 2) Dr. Yousef Al Akraf, Chairman of DQG 3) Badriya Al Tamimi, Managing Director of DQG

nder the patronage of His Highness Sheikh Ahmed bin Saeed Al Maktoum, Dubai Quality Group (DQG) hosted the eigth Ideas.Arabia International Conference 2013 in Dubai under the theme Innovation – Key to sustainability.

The Idea of the Year award, one of the highlights of Ideas.Arabia, recognises employees and organisations for outstanding ideas that ultimately improve business performance and quality of services.

Dr. Yousef Al Akraf, Chairman of DQG, said: “The Ideas.Arabia initiative continues to gain momentum as a catalyst for sustainable business growth and a rallying point for responsible business practices in society. This is strongly confirmed by the unprecedented number of entries we have received for the Idea of the Year competition as well as the large number of confirmed conference participants. The Ideas.Arabia International Conference has certainly emerged as one of the most prestigious and much awaited annual programmes of Dubai Quality Group and we are deeply grateful for the unconditional support that we have received from our sponsors, strategic partners and the entire business community.” Badriya Al Tamimi, Managing Director of DQG, commented: “The

KSA’s SME sector in the spotlight The Izdehar SME Exhibition and Summits in Jeddah will provide a great platform for Saudi SMEs, entrepreneurs, government officials, investors and other stakeholders to network and collaborate. The event held from May 19 to 21, 2013 aims to drive the growt h of the Saudi SME sector and support aspiring entrepreneurs. The Saudi SME sector consists of 92 percent of businesses and employs more than 80 percent of the Kingdom’s workforce. However, it is interesting to note that this sector contributes only 33 percent of the GDP and the average age of a Saudi SME is seven years. These factors present both challenges and opportunities that will be addressed at the Izdehar SME Exhibition Summit, which is supported by the Kafalah, the National Entrepreneurship

Institute (Riyadh), INJAZ Saudi and Bab Rizq Jameel. Through the event, attendees will get a chance to meet, network, share ideas, learn from and do business with local, regional and international solution providers, leading businessmen, government agencies and regulators. Osama Bin Abdul Rahman Al Mobarak, Acting Head of the Kafalah Programme said, “We are participating in Izdehar SME as we realise that the challenges

conference provides an exclusive opportunity for decision makers to gain invaluable insights about innovative best practices that have empowered leading business and public sector organisations to succeed in today’s highly dynamic and competitive environment. Taking advantage of DQG’s strong relations with key governmental and private sector entities, we are leaving no stone unturned to ensure that this year’s edition of Ideas.Arabia will once again inspire and stimulate creativity and innovation within society through a more collaborative approach.” The Idea of the Year competition offered awards in seven categories: Idea of the Year (overall), Technology, Productivity, Customer Services, Environmental, Health and Safety, and Financial.

found in the Saudi SME sector need to be addressed in a systematic manner. Izdehar provides the right platform for this. The Saudi SME sector’s contribution to the country’s GDP can be raised if we address the five main challenges, which are; lack of financing, arcane administrative and procedural problems, the non-reliability and/or lack of statistical information, the lack of technical, managerial and marketing support, as well as lack of proper business planning and execution by those starting out in the SME sector.” The Kafalah Programme, founded and supported by the Ministry of Finance, acts as a guarantor for Saudi SMEs, assisting them to obtain loans in order to support the kingdom’s economic and social development. In addition to the exhibition, there are two summits - SME and Entrepreneurship Summit and Inspiring Women Summit. Apart from this, the event will also feature training seminars and the Pitch for Investment competition.

During the seminar

Google Engage to support SMEs

n a partnership with Potential.com, Google launched an outreach initiative aimed at supporting

SMEs with online marketing called Google Engage. The event attracted more than 100 executives and entrepreneurs who were keen to gain insights on mastering the art of marketing. Google Engage is designed to support agencies with improving the effectiveness of their AdWords campaigns. It has improved the overall experience of thousands

of agencies specialising in online advertising, around the world, and their clients. “Small and Medium sized enterprises can benefit most from online marketing campaigns; by hosting this workshop we are helping them expand their reach in the marketplace in the most effective and targeted way,” expressed Tarek Abdulla, Head of Marketing, Gulf and Levant, Google. According to Google speakers at the seminar, the Google Engage initiative was designed to provide users, who sign in to the programme for free, with a dedicated AdWords phone support, training both in-person and online, sales tools, incentives, and more. “We believe the Google Engage programme addresses an important gap in the market by empowering

Servcorp’s new initiative to boost entrepreneurial growth

During the launch

Servcorp, in collaboration with the Higher Colleges of Technology, launched the Mashrooi initiative under the patronage of His Highness Sheikh Nahyan Bin Mubarak Al Nahyan, Minister of Culture, Youth and Community Development in the UAE, and in the presence of His Excellency Pablo Kang, Ambassador

of Australia to the UAE and Qatar. In partnership with Khalifa Fund for Enterprise Development, Abu Dhabi Commercial Bank – the official bank sponsor, Etihad Airways, and i-Style, the initiative aims to foster the birth of national champions by providing a starting platform for local Emirati entrepreneurs to explore their potential. Mashrooi is an entrepreneurship package that equips young Emiratis with the essential elements to start their business at an economical cost. The Mashrooi package provides

SME ad agencies to better support the SME community and help provide a better return on their marketing investments,” said Shadi Banna, Managing Partner for Potential.com. As an international business catalyst, Potential.com is committed to support the development of startups, SME’s and established organisations; to better accelerate their growth through innovative and interactive programmes. The company has revamped its SME Evolution Programme, which helps SMEs to increase the competitiveness of businesses and expand to become global companies. The Google Engage programme is a great step in that journey towards a more efficient and globally competitive local SME ecosystem.

applicants with a dedicated phone number and receptionist to handle their calls, a premium business address in the prestigious Al Mamoura building, free internet usage as well as access to a global network of meeting rooms, offices and executive business lounges. A roadshow will be organised across six of the HCT campuses to present the competition and provide the students with the necessary information. The candidates will then be granted a period of one month from the date of the roadshow to prepare and submit their business plans to Servcorp. A designated panel of experts will then evaluate the business plans and select the top ten applicants which will move to the final stage of live operations. The finalists will receive a Servcorp Mashrooi package which allows them to benefit from Servcorp’s business solutions and work in a professional environment. This initiative will conclude with an award ceremony which will take place in October 2013.

May 2013

Banking for business

An army of two A strategic alliance with another business can be a powerful catalyst for breaking fresh markets, enhancing customer perception and supercharging margins. So can your company re-imagine its potential and work in a partnership that challenges preconceptions and makes a critical difference to business performance?

here are few certainties in life as an SME but one of them is that it pays to study the behaviour of successful organisations. One of the characteristics of the world’s leading corporations is that it’s relatively usual for them to partner with one another to access mutual customer bases and unleash fresh competitive advantage. Let’s look at two prime examples. If ever there was proof of the value of strategic alliances, consider this. Just over a decade ago there were two wellknown but ailing car manufacturers: sales had begun spiraling downward and individually, neither could compete in a premier league led by Toyota, Ford and the burgeoning South Korean marques. Yet today, Renault-Nissan produce more than 1 in 10 of every car sold and are the world’s fourth-largest vehicle manufacturer. The dramatic turnaround happened because both parties were able to see that they each had something the other wanted. Renault had the technology, innovation and flair that the Japanese brand sorely needed, but their market was a limited pool that couldn’t generate sufficient

income. Whereas Nissan had a huge range of international outlets, global distribution and access to the potentially massive markets of South and South East Asia. Yet squeezed margins meant the firm had fallen behind in the technology race and lacked the spark to capture young, affluent customers. There’s another significant factor about this example: no formal acquisition or merger has ever taken place between the two organisations. There’s an exchange of shareholding, but the contractual bonds are kept as simple as possible. While the Renault-Nissan alliance involves a particularly dramatic turnaround, other strategic alliances are based around businesses which are already top-quartile performers, but whose service offer is a perfectly complementary fit. ADCB and Etihad One example close to home is that of ADCB and the Etihad Business Connect Alliance. In this unique partnership (announced as recently as April 21, 2013), the alliance creates a completely fresh value chain for all its stakeholders. It supports local SMEs by reducing their travel costs - every time a company’s staff fly with Etihad, the

company is itself rewarded with Etihad Guest Miles, which can then be used for free staff flights and upgrades. What’s more, there’s a true ‘push/pull’ effect, with employees getting their own set of direct benefits too: staff who are travelling can earn miles for their own Etihad Guest account, Etihad’s frequent flyer programme. So rather than being simply a way of redeeming premium air miles, it directly addresses the needs of SMEs through reducing the impact of one of their core costs. (Companies can often take advantage of the benefits from Day One of registration, for example). This is an example of a strategic alliance that is in fact a four-way win-win: ADCB business banking products and services become more attractive with the added benefit of Etihad Guest Miles, while simultaneously giving its SME customers an added-value bonus and underlining the bank’s commitment to the sector. Meanwhile, Etihad Airways has an additional opportunity to be able to connect with ADCB’s SME customer base. From the point of view of the user, both the SME and its staff can save money - and indeed, both parties can make exponential savings the more they fly.

A template for SMEs While the above examples relate to large organisations, they show - at a ‘macro’ level - the kind of leverage that a strategic alliance can deliver. They also show that a right sort of alliance can actually convert 1+1 to 11 instead of following the convention! But for any alliance to be successful, it has to meet three critical requirements. These are: • Both partners must add value to each other’s business either by opening up new sectors, increasing the total volume of customers or allowing new, more innovative products to be sold. • For partnerships to be effective, both partners need to be looking for similar outputs and must be highly transparent with one another. • The alliance should deliver a tangible financial benefit to both parties to keep them engaged effectively. Examples of local SME alliances Emirates Petroleum runs each of its petrol stations as separate business units, with every one encouraged to ‘customise’ its offer to different geographical locations and levels of business. In this way, rather than being representatives of a large business, every garage becomes in effect an SME (the same would apply to the various showrooms of the Al Nabooda Group, for example). Each garage receives a range of retail and merchandising options that are best-suited for realising the potential of the market in its location. Certain individual outlets are designated as official partners of 3M Gulf Ltd., a business offering premium heat cooling and tinting film. Car owners are offered three different grades of tinting film, and a choice of metallic and ceramic film types. A sales executive - generally an employee of Emirates Petroleum who has been trained by 3M - will approach drivers while their cars are being refilled, showing a tinting palette and reviewing prices. The driver is encouraged to make a date for the fitting, which is done indoors in a dedicated fitting unit adjacent to the garage forecourt. So a valuable car accessory/ upgrade is provided in a car-based setting, maximizing customer convenience and, for 3M, offering a high flow-through of prospects. The garage can then benefit from commission on sales of tint film, with a good chance of making further fuel sales before or after fitting. Peter Coverdale, 3M Customer Relation Manager (Gulf) commented that: “The

Smarter businesses f ly for free The Business Pass from ADCB – an opportunity for businesses to receive free flights and upgrades with Etihad Airways For many businesses, the growing cost of travel is becoming a concern. Now, through a unique partnership between ADCB and Etihad Airways, every time your staff travel with Etihad Airways, your company will be rewarded with Etihad Guest Miles that can be used for free flights and upgrades.

To make a smart business decision, call 800 763 800 or SMS ‘TBP’ to 2626

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There are few certainties in life as an SME but one of them is that it pays to study the behaviour of successful organisations. garage setting gives us a symbiotic relationship with Emirates Petroleum, offering a premium tinting service to their valued customers. It is also important that tint film is fitted indoors, avoiding extremes of temperature when it is first sized and trimmed. The Emirates Petroleum stations give us this scope and allow customers to wait in an air conditioned environment.” Boosting capabilities Perhaps the most common incentive for strategic alliances is the opportunity to increase the service proposition, bolting on capabilities that simply aren’t possible otherwise. An example is the recent move by Dubai-based social media marketing specialist 74by2 (creators of the web-based TV show SME Biz TV) to partner with the leading Indonesian hosting provider, Mimir. The objective was to – • Increase business sales • Enhance lead generation • Achieve stronger customer engagement

Another major factor was the ‘territorial fit’ - with 74by2 being extremely strong in MENA, and Mimir having similar predominance in South East Asia. This effectively gives both companies the ability to double their catchment zones and bring entirely new, fresh businesses into their respective core markets. Choosing performance over pride The management guru Tom Peters once remarked that “there is nothing you cannot do if you are prepared to work as part of a team”. Yet there is no doubt that a good many businesses hold back from potentiallv valuable strategic alliances because they fear being sublimated into a larger unit that has no set corporate status or because they want to be seen as the ‘sole provider’ of a specialist service. The reality is that a strategic alliance can – • Make a dramatic cost saving: you don’t have to invest in product development or marketing - the capability is there already. • Transform your sales footprint. • Invigorate cashflow. • Bring strong technical innovations that put your business at the forefront of the industry wave. • Enable you to break new (and previously unobtainable) markets. • Save specialist staffing and recruitment costs. So, will your business forge ahead via a strong, appropriate corporate alliance - or waste precious time and resources ‘reinventing the wheel’?

May 2013

Movers and Shakers

An artistic approach The cARTel comes as a breath of fresh air for budding fashion entrepreneurs in the region. In an exclusive interview with Founder, Shub Qureshi, we uncover this creative path to success.

ith a background in media, publishing, advertising and production, one thing that Shub Qureshi naturally exhibits is her flair for creativity. She has served several creative roles throughout her career and is also the Co-Founder of Desert Fish magazine. However, easily one of the most interesting aspects of Shub’s vocational path is the cARTel – an avant garde showroom and boutique in Al Quoz. The cARTel is a unique concept which provides a platform for selected designers to showcase their designs under one roof. Located in Al Serkal Avenue, the showroom flaunts exclusive wearable designs presented by over 30 artists and fashion designers. The wearable art gallery has been conceptualised by Peter Richweisz, veteran photographer and filmmaker. “With the cARTel, we are catering to the large demographic of the UAE’s stylish crowd and fashion lovers who

want to uniquely express themselves with one-of-a-kind pieces. They will be treated with endless possibilities to choose from including women’s wear, men’s wear, bags, shoes and accessories – all of which speak a statement of art and express a lofty level of craft and detail whilst providing a unique shopping experience,” said

This type of showroom was much needed here. Our products have already been well-seen and appreciated. It is wonderful to have designers all over the world approach us and organise fashion exhibitions with us.

May Barber, Managing Partner of the cARTel. The need for such a concept is evident from the great response the cARTel has received since its inception. Within a short space of time, several uber-exclusive fashion designers from all across the globe have approached the gallery and have expressed interest in a collaboration. “This type of showroom was much needed here. Our products have already been well-seen and appreciated. It is wonderful to have

designers all over the world approach us and organise fashion exhibitions with us,” said Shub. Inspiration behind starting the cARTel “We realised that out of the many young fashion designers, very few make it to the top. However, a lot of them are doing creative work and lack a platform to display their talent. One of the reasons for this is that there are little or no resources available to them such as capital investment, PR,

marketing, and so on. This was our way to help young designers and start a creative movement,” explained Shub. Furthermore, she highlighted the fact that the cARTel is different from any other fashion boutique in the region’ aiming to display avant garde fashion and statement pieces. The region has a lot of safe options in terms of fashion and it is important to offer something fresh. This is where the cARTel steps in. “Our business model is essentially not mass production; we are more like an artisan workshop, much more

of a showroom than a retailer. The UAE is internationally recognised as one of the top consumer markets in the world, particularly when it comes to fashion. The cARTel will bring to the UAE cutting edge designers from around the world. We believe there is a gap in the market between high street and high end, to cater to the avant garde individualists. There is a lack of alternative concept-based shopping experiences, where style connoisseurs try to find their way off the beaten path of retail. These collections are far from

May 2013

Movers and Shakers

the mass-produced and cookie-cutter designs currently available in the market.”

Hence, I advise all fashion entrepreneurs to try and have a few pieces that are very statement.”

Showcasing your designs at the cARTel Keeping their collection unique and one of its kind is not an easy task. Amongst many talented designers in the region, a few hand-picked designers are given the opportunity to showcase their artistic pieces at the cARTel. Shub described the criteria to be a part of cARTel, “What we look for in a potential designer are three things – a strong concept in their fashion line,

Why be at the cARTel? Aspiring designers and fashion entrepreneurs may be wondering – what makes the cARTel the right choice for you? Shub answers this question and talks about the fantastic exposure they offer. “We promote our designers through our social media arm and include them in our conceptual Desert Fish magazine. However, most importantly, we display their pieces

a progressive vision in the collection and of course the designer shouldn’t be very safe with patterns. If your designs are something that can be found in other shops and malls across the region, we are definitely not that interested.” “However, designers don’t have to be well established in the region. They can be new and upcoming. In fact, some of our designers have their very first collection with us. We have several designers that are extremely talented but aren’t that well known.” Shub further added: “Every designer has his or her own design and vision. Whenever there is some attention put into a piece, it really shows and people notice the difference.

in our showroom. In this way, they are exposed to buyers, retailers, and other boutiques from across the region and around the world. We essentially act as a facilitator.” “Being a part of our showroom gives them a presence while, at the same time, they have very low overheads. This is something significant for any new fashion designer. They are in the right context and through us they get some great feedback. We serve as their first stepping stone as they enter the industry.” Farah Nasri, Founder of HKD, has been one of the designers working with the cARTel. She describes her experience: “The cARTel’s curatorial type of gallery space in the midst of

Dubai’s art hub – Al Serkal Avenue – seemed like the perfect fit for my HKD rings. Their focus is on the art and conceptual as well as avant garde architectural 3D printing processes. She continued: “The line itself sprouts from my architectural background and love of art history so it was just the right audience to

We realised that out of the many young fashion designers, very few make it to the top. However, a lot of them are doing creative work and lack a platform to display their talent. One of the few reasons for this are little or no resources available to them such as capital investment, PR, marketing, and so on. This was our way to help young designers and start a creative movement. target through the cARTel. I think it’s important for a new designer to carefully choose that one boutique that targets the right audience for their line.” Future prospects Off to a good start, the cARTel has a lot of exciting plans for the future. “We hope to build more cARTels around the world to discover designers and encourage entrepreneurship in the fashion world. We hope to extend to the States, possibly Los Angeles and Shanghai. Also, we hope to introduce a new fashion outlook in the region. We want people to know that there many other innovative pieces available apart from the normal fashion in malls.”

May 2013

Movers and Shakers

It’s a gift Speaking to the ‘dynamic duo’ behind the online gifting portal, Yougotagift.com, we unravel the fundamental steps in building any successful online startup.

he business idea

Abed Bibi and Husain Makiya have two very different stories about where the idea of an online gifting portal actually started. While Abed was inspired by the concept of a wedding registry, Husain discovered the need for such a website after his many futile attempts to purchase a gift card online. However – what they have in common is – zeal and passion for their brand, Yougotagift.com. Both Abed and Husain are partners in Honeybee Tech Ventures, the umbrella group for the online venture Yougotagift.com. They are part of the same team that built Laimoon.com, Zawya.com and Roundmenu.com. Understand key market trends Having developed a great business idea, the next step – within any industry – is to have a strong grasp of regional trends and how they will keep or hinder a startup. Abed and Husain proved to be a good example having a strong outlook on the e-commerce trends in the region. Abed says, “Internet users are on the rise in the region and people are becoming increasingly confident with online purchasing.

E-commerce is something that is constantly growing and there is no looking back. Today, it is common to find a young child with an IPad. Keeping this in mind, a few years from now, e-commerce will be everything.” Adding to this, Husain explains, “We realised that e-commerce is a rapidly growing space, especially within this region. There has been a lot of opportunity in this region and everyone is scratching their heads on how to embrace it.” Embed value features A crucial step in the process is – inculcating a value proposition into the brand. An online platform needs to have certain defining features that make the browsing experience memorable for the user. Such features can be seen on Yougotagift.com, explain Abed and Husain. “Our key values are reflected in the design of our website. It is simple and fresh. It is very consumer focussed with an appealing young, optimistic and happy feel to it,” says Abed. “We tried to translate complex technology into a fun experience for the users. For instance, while selecting the colour of the Yougotagift.com brand, we went with purple which we believe is an emotional and grand colour. It would appeal to both men and

women alike. So, our thought process is reflected in each element of our brand.” Convenience, variety and immediacy are some of the chief features of Yougotagift.com adds Husain. He further describes the efforts of his team in building the online portal, “We wanted to use technology in a clever way to deliver an experience. We had the aim of humanising technology so that feels real. We don’t have scientists living in our incubator, but we do have some really smart people!”

The content is important in order to differentiate from others. Your website needs to have rich and comprehensive content. In fact, some of it could be exclusive too. With an emerging pools of websites, it becomes important to differentiate your brand. “The important task is to keep the process innovative. It shouldn’t feel like the person behind the screen is a tech guy,” explains Abed about their strategy to keep things different. “One key factor that makes a website stand out from the rest is the content. We have 24 different brands on our website that prove to be valuable for our customers.” Husain adds: “The content is important in order to differentiate from others. Your website needs to have rich and comprehensive content. In fact, some of it could be exclusive too.” Create the right mix of brands Alongside a user friendly online experience, it is also pivotal for the website to provide value to its customer base through products or services it is offering. In terms of Yougotagift.com, this means developing a strong portfolio of merchants for the customers to choose from when purchasing a gift card from their website. This step in the process could prove to be difficult for startups,

May 2013

Movers and Shakers

Don’t lose hope Throughout the journey, entrepreneurs and small businesses are definitely faced with a lot of uncertainty and challenges. According to Abed, the key, however, is to not lose hope. He advises, “Today you might lose but tomorrow you might gain. Every peak has a pitfall and you cannot take things personally. Another important aspect is to be financially careful and choose the right investors. They give you credibility and take you forward.”

The team of Yougotagift.com led by Abed Bibi and Husain Makiya

primarily because top brands will be hesitant to partner with a new online initiative due to lack of trust. Inversely, without the participation of good brands, the website might not be able to attract the right kind of audience or satisfy its visitors. “The most challenging part is to sign up these leading merchants on the website. Some people really underestimate this challenge. They need to trust working with our brand and you definitely need some kind of track record. In this case, the backing of our parent company, Honeybee Tech ventures has helped a lot,” explains Husain. “You need to do your research and homework really well. It is also important to start building credibility and trust when working with major brands,” he suggests. Speaking of Yougotagift.com’s merchant base, he adds: “We are working with big brands but of course it is still work in progress. We hope to introduce new stores and create a brand association which is very important. We aren’t just adding any brands, we select some of the best brands in the region.” Evaluate customer response Since their launch in April, the website has enjoyed over 100 transactions without any marketing spend (i.e. no digital marketing, ATL or BTL - only a press launch and word of mouth). Additionally, the website has

24 stores offering a wide variety of gift cards to its visitors. “We have enjoyed some really good response. Close to 60% of our stores online have had at least one purchase which also shows that our choice of stores has been well-advised,” says Husain. Expressing pride in what the brand has achieved so far, Abed adds: “We have the best content and a human friendly interface. We’re proud of where we’ve reached. We have major brands with us. It’s a start.” Set goals for the future Goals often give businesses a direction in which to move forward. It can be helpful to have a picture of where you want to be in a few years from now. On his plans for Yougotagift.com, Abed says, “I hope to expand into KSA, Lebanon, and across other parts of the GCC region. We want to tap markets where there are a lot of Internet users. Possibly, somewhere international as well. Gift cards are something that work across borders. We also hope to create strong relationships with popular brands through the journey.” “There’s obviously a huge window of opportunities for opening doors to advertisers, stores can push their new products, access a database of consumers, galleries and we can offer banners online and do events as well,” he continues. While his partner, Husain adds: “We hope to become the leading gift card company in the region; we are already the first.”

Snapshot of Yougotagift.com

Total number of transactions: crossed 100 transactions without any marketing spend (i.e. no digital marketing, ATL or BTL only a press launch and word of mouth)

35%

monthly growth

Average price of gift card

AED

500

24 Total number of

merchants so far Husain, on the other hand, says: “Many people start prematurely. It is crucial to think everything through before you start. You should have the guts to do it. Having said that, once you start the journey, be true to yourself and stay the course.” “It would be foolish to think you would become an entrepreneur overnight. It requires effort and you need to have the stomach for it,” he concludes.

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MANAGING RISK

Transacting business overseas By its very nature, transacting business overseas poses an extra dimension of logistical and financial challenge - in other words, risk - which is best tackled with the help of specialist insurance products designed to bridge ‘the culture gap’. Always ensure that your business is covered against the dangers of distance, language and fluctuating exchange rates: it simply doesn’t pay to take a chance. Paul Godfrey explains the options… 32

W • • • •

hether your business is an import/ export specialist, or has a sprinkling of overseas clients, there is a good deal that insurance can do to make life easier. For example, it can Hedge against fluctuating exchange rates Protect you against late payments and unpaid debts Safeguard goods in transit or held in overseas depots Protect you against third party litigation if deliveries are late

Going the distance: cargo, freight and ‘goods in transit’ insurance One of the potential hazards of doing business overseas is that if you’re involved in managing any kind of delivery, the longer journey time means that there’s more risk of theft or damage due to natural disaster or other unpredictable accidents. Traditionally, these risks are handled by freight or cargo insurance - often as part of a marine or aviation insurance policy. Freight insurance gives the extra coverage against the unpredictable and the unpreventable damages that

The longer journey time means that there’s more risk of theft or damage due to natural disaster or other unpredictable accidents. might occur when freight moves from point A to point B. If you import/export goods, the insurance cost of a freight or cargo policy is usually calculated by the total commercial value of the goods. Note that if you are physically selling the goods, rather than simply transporting them, the sales contract may require that you provide insurance to protect the buyer’s interest or its bank’s interest. So it goes without saying that noncompliance with the contract can result in legal problems if the goods in transit are lost or damaged. Moreover, even if you are not legally obligated to provide insurance, you may want to purchase insurance to protect your business if it has a financial interest in the goods. Cargo and freight policies will typically cover: • Loss of damage to cargo during transit • Transport expenses and overhead charges • Expected profit from sale of goods at place of destination • Financial losses attributed to delay in start-up (for project cargo insurance) caused by loss or nondelivery of insured cargo

Recently, more sophisticated versions of freight and cargo cover have become available. One example is ‘goods in transit’ (GIT) cover, which is specifically designed to protect you if you carry goods for someone else. This will cover claims relating to loss or damage to those goods while in your care. Having access to a well written, comprehensive GIT policy will often be a standard requirement if your business is pitching for new freight contracts. Goods in transit insurance covers inventory or other merchandise shipped by the seller, but not yet received and accepted by the purchaser. It is intended to protect buyers and sellers who are exposed to financial loss if this property is lost, damaged, or destroyed while off premises and in transit. Typically a goods-in-transit policy will insure: • Your legal liability as a carrier for the physical loss or damage to goods that you’re responsible for • Your legal liability for loss or damage to containers that aren’t yours • Financial liability arising from damage, delay, accidental mis-delivery • Legal costs ‘Open cover’ policies A further development of the traditional freight and cargo formula is an ‘Open Cover’ policy. This is designed to provide complete, end-to-end protection. For example, it will cover shipments by any conveyance, ie, by sea, by air, by truck, by rail. Coverage will also typically be worldwide. (It’s important to note, however, that shipments to, from or within countries under UN and/or US sanctions are usually excluded). A great advantage of this type of policy is that it can provide cover for the whole period of transportation ‘from warehouse to warehouse’, including overloading, trans-shipments and intermediate storage. This means that you will be indemnified against any danger of loss or theft in warehousing facilities, and against delays incurred by any element in the delivery chain. Policies of this kind can also be customised (at extra cost) to meet your exact, bespoke requirements – for example, you may be using an express-transfer provider to switch goods from sea to land in a singlebond port, or need extra protection against potential damage to fragile or heat-sensitive goods. Choosing the value of the cover Deciding on the amount of insurance is an important first step. Generally, the policy limit should reflect the maximum value being shipped in any one conveyance. When choosing the amount, keep the following in mind: • Cargo policies typically value goods at the invoice cost, plus freight charges, plus an advance of between

May 2013

MANAGING RISK

10 and 20 percent to cover expenses incurred during shipping that are unknown at the time of shipping. • If you are an exporter, your profit is generally already included in the invoice cost. An importer may want to select an advance valuation that includes a profit margin, and may also want to include coverage for duty and taxes. Some importers and exporters may want to insure their goods based on sale price. The ‘duty of care’ clause Just about every style of freight or goods-in-transit policy will include a ‘duty of care’ section that lays out a list of reasons why an insurer might reject your claim. Typically these will require that your company: • Employs only competent drivers and agents (you may have to complete a risk checklist to verify this). • Takes all ‘reasonable’ measures to secure the load. • Keeps the load under surveillance 24/7. • Keeps the fleet maintained properly (again, this may need verification). • Has ISM Endorsement for shipments on Ro-Ro passenger ferries. Protection against currency risk One of the most important uses of insurance in international trade is to create a ‘buffer’ against the loss of profits if you’re adversely affected by a changing exchange rate. Every business involved in international trade faces the risks of fluctuation in the exchange rate eroding profits and operating margins. This can have severe consequences if it isn’t managed properly. For example, exchange rates may move by up to 10 per cent within any single year, which can significantly affect a firm’s cash flows, meaning a 10 per cent decline in the value of a receivable or a 10 per cent rise in the value of a payable. This can mean that export profits are negated entirely or import costs could rise substantially.[6] There are generally three main types of foreign exchange risk. These are – • Transaction exposure • Economic exposure • Translation exposure

Each of the above can be mitigated and managed through correctlyplaced insurance, but it’s important to understand exactly how your business may be impacted by these different types of event. Transaction exposure A business has transaction exposure whenever it has contractual cash flows (receivables and payables) whose values are subject to unexpected, unpredictable changes in exchange rates, due to a contract being denominated in a foreign currency. At some point, the company must

Every business involved in international trade faces the risks of fluctuation in the exchange rate.

exchange foreign currency for domestic currency - and risks facing volatile, disadvantageous changes in the exchange rate. Businesses will inevitably become exposed as a direct result of activities such as importing and exporting or borrowing and investing. Economic exposure Economic exposure (sometimes called operating exposure) is when a business’ market value is influenced by unexpected exchange rate fluctuations. Adjustments of this kind can severely affect the firm’s competitiveness, its present and future cash flow, and ultimately its value. For example, there may be a shift in exchange rates in one of the business’ key operating markets, which dramatically influences (either for good or bad) the demand for a particular product in that country. If your business produces or exports that product, it’s subject to all the economic exposure that a rise or fall in demand can leverage.

Translation exposure Translation exposure is when the business’ financial reporting is affected by exchange rate movements. Inevitably, your business will prepare consolidated financial statements for reporting purposes, and the consolidation process means translating foreign assets and liabilities from foreign to domestic currency. While translation exposure may not affect an SME’s cash flows, it could have a significant impact on a firm’s reported earnings - and therefore its stock price if its publicly listed.] Managing the risks: traditional strategies and the role of insurance There are basically two different ways of protecting against currency exchange risk: • Insurance. A range of insurance products is available to mitigate the potential damage of currency fluctuation on cash flow and profitability. Policy claims have, for example, traditionally been triggered when exchange fluctuation reaches a particular agreed point. The only downside with using an insurance tool is that of cost, since it is in effect ‘buying’ protection from a scenario that might be handled though other financial instruments. • Foreign exchange ‘hedging’ strategies. Transaction exposure is often managed either with the use of foreign exchange derivatives such as – 1. Forward contracts 2. Futures contracts 3. Options and swaps 4. Currency invoicing 5. Leading and lagging of receipts and payments 6. Exposure netting The drawback of any of these approaches, however, is that they require a high level of financial sophistication and a level of participation in the global money markets that may be quite beyond the usual experience of even the larger SME. So again, a bespoke insurance solution (tied to a particular level of exposure or exchange variation) can be a worthwhile and practical option.

May 2013

Managing risk

It doesn’t pay to play dirty All of the GCC nations - especially the UAE - have surprisingly tough and well-developed legislation in place to deal with businesses found guilty of polluting the environment. It makes good sense to ensure that your SME and the contractors it works with are sensitive to the potential dangers and take proactive steps to work well within the requirements of the law. SME Advisor highlights the dangers…

“We cherish our environment because it is an integral part of our country, our history and our heritage. On land and in the sea, our forefathers lived and survived in this environment. They were able to do so only because they recognised the need to conserve it, to take from it only what they needed to live, and to preserve it for succeeding generations.” - The late President of the UAE, HH Sheikh Zayed Bin Sultan Al Nahyan:

he majority of SME owners and directors will thoroughly agree with these words. To be fair, it’s likely that your business isn’t a major environmental polluter and you’re certainly not going to be responsible for the next Bhopal or Macondo. Can you guarantee, though, that you won’t be involved in any of the following scenarios? For example: • You change the contractor responsible for clearing the rubble from a demolition site - and they

decide to take a short cut and dump a skip-load of masonry next to the beach. • You decide to re-develop a patio area on the first floor of your premises, but while sanding, you realise that it’s actually made from blue asbestos - and the dust has drifted into the playground of the school next door. • The thermostat on the company incinerator malfunctions and your company is held responsible for

The existing raft of UAE legislation entails penalties that range from a AED10,000 fine through to eight years’ imprisonment.

belching acrid black smoke into the community for four days. The fact is that any of the above carry major fines; worse, if you’re contaminating an area with poisonous substances (however unintentionally) and people fall seriously ill you could face a substantial prison term. Yet amongst many businesses, there’s a misunderstanding that GCC countries as ‘developing’ nations - will not pursue pollution cases with the same vigour as their European counterparts. The reality is that, as in so many other areas, the communities of the GCC have made dramatic progress: let’s not forget, for example, that the UAE is at the vanguard of developing the ultimate ‘clean’ city. Abu Dhabi is world-famous for its investment in Masdar City, home to renewable energy and environmental cleanliness. It also played host to the World Future Energy Summit. Yet it is not so widely known that the UAE has a strong

May 2013

Managing risk set of federal and local laws specifically tackling the threat of company activities damaging the environment. The existing raft of UAE legislation entails penalties that range from a AED10,000 fine through to eight years’ imprisonment. The reality is that businesses must be responsible and clean partners in the region’s economic development. The body of anti-pollution law is relatively extensive and prosecution will follow only quite minor breaches. For example, Federal Law No. (24) of 1999 for the Protection and Development of the Environment (“Law No. 24”) forms the backbone of the Environmental Law within the UAE. It has extremely comprehensive coverage, including • Protection and conservation of the quality and natural balance of the environment. • Control of all forms of pollution and avoidance of any immediate or longterm harmful effects resulting from planning for economic, agricultural or industrial development or other programmes aimed at improving life standards. • Co-ordination among the Federal Environment Agency (FEA), competent authorities and parties concerned with the protection of the environment and conservation and consolidation of environmental awareness and principles of pollution control. • Development of natural resources and conservation of biological diversity in the UAE and exploitation of such resources with consideration of present and future generations. • Protection of society, the health of human beings and other living creatures from any activities and acts which are environmentally harmful or impede authorised use of the environmental setting. • Protection of the UAE environment from the harmful effects of activities undertaken outside the region of the UAE. • Compliance with international and regional conventions ratified or approved by the UAE regarding environmental protection, control of pollution and conservation of natural resources. Then, there is a significant addition: Law No. 24 and the Executive Order published pursuant to Cabinet

Resolution No. (37) of 2001 deals comprehensively with all aspects of environmental protection relating to the following – “projects; the marine environment and pollution thereof; liability and compensation for environmental damage; protection of drinking and underground water; air pollution; disposal of hazardous waste; disposal of medical waste, pesticides, agricultural fixers and fertilisers; nature reserves; the protection of wildlife, as well as the penalties imposed for contravention of any provisions of the aforesaid.” Getting specialist cover While it is true that some of the liability issues raised by environmental pollution will be covered under existing insurance policies, this

According to Law No. 24, any business or institution that wishes to undertake a project within the UAE which may have an impact upon the environment must apply to the Federal Environmental Agency (FEA) for a licence. certainly isn’t true for all of them - especially the most severe ones impacting the general community at large. SME Advisor spoke to Anna Nilsson, manager of the environmental impairment liability team at AIG Insurance. “Rather than simply hoping they are covered by existing policies”, says Anna, “boards must take responsibility for understanding those exposures and make informed decisions. They may well conclude they do not need environmental insurance, but stakeholders such as investors, shareholders, clients and staff would take a dim view if it came to light in the aftermath of an environmental incident that such a decision had

been taken without due consideration of all the issues. Businesses should ensure they are covered for the whole spectrum of environmental risks, including gradual or sudden damage, any short or long-term costs of remediating a damaged site, loss prevention, mitigation and emergency costs.” (AIG, an international propertycasualty and general insurance provider, are one of the companies ‘leading the charge’ in the relatively new area of Environmental Liability Insurance). The Environmental Impact Assessment (EIA) According to Law No. 24, any business or institution that wishes to undertake a project within the UAE which may have an impact upon the environment must apply to the Federal Environmental Agency (FEA) for a licence. The FEA in co-ordination with the relevant local authority then evaluate the environmental impact of the project in question. In other words, this is a proactive mechanism aimed at minimising the risks before they have a chance to happen. The need to comply with formal procedures and do things ‘properly’ is awakening more businesses to the importance of not leaving environmental exposures to chance. Anna Nilsson explains that: “It has become a rapidly-growing market - at AIG, we have seen our overall book of business grow by more 30 per cent in the last year. Despite this, a degree of confusion remains and gaps in coverage are actually increasing with the changing environmental legislation.” The reality of pollution protection is simple: companies should examine all their likely areas of risk exposure – and perhaps the best way to do this is to ‘walk’ the business, making a list of each and every potential environmental hazard, and preferably in the company of an insurer’s trained risk manager. One of the characteristics of pollution incidents is that they largely result either from operational malfunction or negligence: they are seldom the result of unpredictable encounters with outside events. So the good news is that it’s very much an owner or manager’s decision as to whether the risk should be tackled or not. From both an ethical and financial perspective, the former choice is best.

TECOM SME Builder 2013 Your gateway to the essential expertise and knowledge needed to accelerate SME business growth Direct access to a pool of invaluable SME knowledge and expertise Expert insights on hot SME topics from the SME panel discussion Speed table sessions for one-to-one expert consultation Networking with inspiring innovators, thought leaders and peers TECOM SME Builder - Second Session 2013 Topic: Date: Venue: Time:

SME Funding Fundamentals June 13, 2013 Dubai Knowledge Village, Conference Centre, First Floor 8:30 a.m. to 1:00 p.m.

Session Highlights: � Funding 101: How to navigate the funding maze � Finding the right funding: What works for your business � Assessing the funding potential of your business model � How to attract investment: What is on the investor shopping list? � Funding ‘do’s’ and ‘don’ts’: Avoiding common pitfalls � Top trends for the future of funding in the UAE Event agenda: 8:30 – 9:30 9:30 – 10:45 10:45 – 11:15 11:15 – 11:30 11:30 – 1:00

Registration, coffee and networking Panel discussion and Q&A Expert speed table Coffee break and networking Expert speed tables

Who should attend: This session is relevant for all businesses however far into the SME journey they may be, from pre-incubation right through to established businesses For more information and to register now go to our new website: www.tecomsmebuilder.com Entry to the TECOM SME Builder 2013 series of events is free for all SME businesses Places are limited and registration is on a first-come, first-served basis

May 2013

GROWTH AND DEVELOPMENT

Where to next? For SMEs looking to expand but not quite sure where to start from, we break down the first step in the process â&#x20AC;&#x201C; the Business Growth Audit.

aking the company to the next level is on almost every small business owner’s agenda. In light of this, there is a lot written and talked about on the ideal growth strategies for small businesses which often leave business owners more confused than confident. The first and most important step, ignored by most business owners, is the process of analysing the firm; simply because, without the understanding of where the company currently is, how will you know where to take it when you grow? Simon Hodges, CEO of the Alchemy Network says, “Very often, business owners forget to step back and take a look. They are constantly working but don’t stop to see where the business is going.” “Lots of entrepreneurs want to grow their business but aren’t sure how to do it,” he continues. “The first and foremost step in your growth strategy should be analysing important questions like – ‘where do we stand, what are we good at’ in order to gain a clear picture of your business.” He emphasises the need for SMEs to review their systems and current processes in order to build a foundation on which to grow and move forward. An indispensable tool for SMEs, in this process, is the Business Growth Audit (BGA) developed by the Alchemy Network and providing a systematic process for in-depth analysis of the business. This programme helps the firm get an accurate snapshot of its operations. It provides a road-map to discover opportunities and hidden assets that could be improved and capitalised on. “A growth audit is the first stage. This is where the company can assess what opportunities it has open to itself, what is happening in the marketplace and where do you stand in comparison with competitors,” explains Hodges. Why is this important? Exploring the concept of BGA, a quite natural question would be – Why? Being the owner of an SME, why would I be interested in this? Although the process of analysing the current position of a business

seems like an obvious thing to do, there are a many reasons that make the BGA or any other growth audit appealing and worth considering. Through the process of the audit and investigation of the business systems, the company’s strengths and opportunities are revealed. Additionally, the hidden potential and untapped resources of the business surface. The audit also provides the business with an independent evaluation of the various aspects of the company like marketing and sales. It offers insights on the competition and its impact on unique selling points. This information is pivotal and can form the basis of future decision making. Business owners and senior executives can look at this data and plan a more effective growth strategy rather than just ‘shooting in the dark’.

Very often, business owners forget to step back and take a look. They are constantly working but don’t stop to see where the business is going. “The basic idea is to paint the picture of the company in its current situation and then give you recommendations on the areas that are weak. Business owners should view these as opportunities versus problems because these are ways to further improve what they do.” Who and When? Businesses with an annual turnover of a minimum AED five million and a maximum of approximately AED 200 million are an ideal fit for the BGA. Furthermore, SMEs looking to grow and expand their business will find the BGA most beneficial. “This programme is apt for business owners who really want to grow their business. If there are satisfied with where they stand currently and don’t want to

May 2013

GROWTH AND DEVELOPMENT

expand further, then the BGA would prove useless for them,” suggests Hodges. He adds, “I would say it is the right time for a business to explore the BGA option when they have a turnover of about AED five to 10 million and have completed

A growth audit is the first stage. This is where the company can assess what opportunities it has open to itself, what is happening in the marketplace and where do you stand in comparison with competitors.

about five to 10 years in the market. This is because, at this point, the business has already established itself and has a good business idea or else it wouldn’t be running for so long.”

A business interested in the BGA doesn’t need any preparation to go through the process. “The whole point is to find out what is wrong and tell them about their business ‘as it is’. They don’t need to prepare themselves in any way,” explains Hodges. “There is no pre-condition to take advantage of this and the only criteria would be that the owner should want to do it. It is very important for the business owner to be involved in the process.” Addressing the hesitation of several business owners in the region towards such audits, Hodges says: “It is vital for business owners to understand that we are just trying to implement a mechanism that identifies what the issues are, if any. We aren’t trying to make their stuff more complicated. Most of the times, it is difficult making them admit that there is a problem and that they aren’t good at everything.” In terms of the frequency of the programme, “If you have built the system correctly to resolve the issues highlighted as part of the audit, then it should continue to work for the business effectively with time. But of course, you might have to redo such an audit every five years in accordance with the changes in the market situation.”

A brief outline of the Business Growth Audit:

Get to know your business

Uncover your business potential

Gain an insight into the future and the next challenge Source: The Alchemy Network

How does it work? The simple procedure of the growth audit can be explained as a five-step process: Step one: An initial meeting with a consultant where the business owner explains the company objectives and expectations. Step two: The business owner is provided with a detailed questionnaire to be completed. Step three: In accordance with the size of the organisation, interviews with senior executives are held to gather any relevant information. Step four: All results are presented in the form of a written report and Action Plan. Step five: A final meeting is held during which the Action Plan is reviewed by the client i.e. the business owner. The entire process runs over a period of two weeks, while the interviews and meetings, as such, take two or three days. Hodges explains a few factors that are evaluated as part of the procedure, “Some of the things that we check during the process are – ‘is there any evidence that you are doing things and measuring the results?’ or ‘what are your sales people doing – do they have set targets?” What do I get at the end of it? As a result of the audit, business owners receive a comprehensive written report and Action Plan. The Action Plan uncovers the key areas to be developed and offers measurable recommendations, on the basis of which, the business can transition to the next stage. The plan highlights opportunities to generate more leads, improve lead conversion, areas for profit margin enhancement, and customer service improvement. Further explaining the report provided, Hodges says: “It is just a brief account of the issues they need to deal with. For instance, if their sales team isn’t working, we tell them that and give them a reason for it.” “Owners can look at the report and decide what they want to do with it. If they are interested in doing something further, we can definitely help them. However, if they want to work on it themselves, they can do that too.”

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For more information visit roberthalf.ae Robert Half Dubai: T + 971 (0) 4 382 6700 Robert Half Abu Dhabi: T + 971 (0) 2 406 9669 Robert Half Doha: T + 974 (0) 4 429 2393 ÂŠ 2013 Robert Half. An Equal Opportunity Employer.

May 2013

GROWTH AND DEVELOPMENT

Come to the edge.. And fly! Just about every owner and director of an SME is looking for ways to make a quantum difference to business performance and growth. Will he or she find the answer in a MBA programme - and will it be relevant to the dayto-day challenges of life in an SME? Will it provide the hands-on expertise thatâ&#x20AC;&#x2122;s so necessary and be an empowering catalyst for progressive change? We spoke to Dr. Amanda Nimon Peters, Dean of Hult International Business School (Dubai) and Executive Director, Robert Chater. 44

“If you keep on doing what you’ve always done, you’ll always get the same results” – Tom Peters

irst things first. Education for its own sake won’t make you a better CFO or help you complete a Type 7 Transfer more seamlessly. But spending a year or more analysing how effective businesses work - and then painstakingly dissecting their key operational and strategic components almost certainly will. It’s absolutely the case that if you study for an MBA you’ll learn hugely important skills that might take you a decade or more to acquire by trial and error. It’s also true that if you want to do this, it makes sense to do it in one of the very best business schools, where the proven track record of alumni success speaks for itself. Precisely why SME Advisor spoke to Hult International Business School, which not only has a tremendously strong reputation for practical, ‘real world’ skills training, but - with campuses in Boston, San Francisco, London, Dubai and Shanghai - truly has a finger on the pulse of international trends and keynote global business issues. For those skeptical about the power of an MBA to make a swift, all-apparent change to their jobs, lifestyle and career rewards, it’s worth considering this: according to the Financial Times rankings, Hult students’ average salary three years after graduation rose by 14 percent to USD 113,700 - the most of any business school. Meanwhile, Hult itself is • One of the top one percent of business schools in the world, ranked top 10 by the Financial Times in all five international categories. • Ranked by The Economist as 31st best business school in the world How does excellence in the rankings translate into practical value for an SME manager? The School’s Dean,

Dr. Amanda Nimon Peters, comments that: “There are really five ways in which the MBA has immediate practical value. These are: 1) You gain a cross-functional, management view of business. Hult’s emphasise is on a practical education that you can put to use from Day One of your new job. It ensures you get an all-round perspective on business working on all sides of the company and having to consider their impact on the bottom line. Many people are used to doing a job where they don’t have to consider the bottom line at all; but here, they learn how to make the company’s performance their primary focus – understanding how margins are built and influenced and the interaction between every side of the business. 2) You gain actual experience in live management consulting. Every student takes part in a six-week Action Project, developing core skills in the context of hands-on consultancy for a real company. Globally, Hult students have completed consultancy projects for multinationals such as IBM, Samsung and Nike. In Dubai, they are working with Fedex, Dubai Trade, Dubai Health Care City and Stanton Chase International. These companies challenge our students to find innovative solutions to business questions and then help them implement the findings. This is not an academic classroom exercise – this is real-life consulting! It’s significant that businesses have sometimes implemented the students’ findings even when they’d already come up with a different answer themselves! 3) You learn proven business strategies that might take you ten years to discover by trial and error in the corporate world. 4) You can’t help but develop totally fresh perspectives on your career goals and overall life priorities.

5) You will gain a global network of contacts. Our classes are truly diverse – we use nationality quotas to ensure diversity – and we offer the opportunity to rotate to our other international campuses so you have the opportunity to build the basis of an extremely powerful future network.”

Dr. Amanda Nimon Peters, Dean, Hult International Business School (Dubai)

It’s absolutely the case that if you study for an MBA you’ll learn hugely important skills that might take you a decade or more to acquire by trial and error. Choices There are two different styles of MBA - a full-time study option, and an executive MBA (the ‘EMBA’), which involves part-time study around an existing job. Dr. Amanda Nimon Peters explains: “The Hult full-time MBA is a one-year programme designed to get you get back into the job market as quickly as possible. In fact, 78 percent of graduates are employed

May 2013

GROWTH AND DEVELOPMENT

ensure a consistently high standard of classroom experience. Even when inviting guest lecturers, it is not enough to identify people with experience working at a Fortune 500 company; we look for people who’ve led these companies to make significant changes and deliver tangible results.”

Robert Chater, Executive Director, Hult International Business School (Dubai)

within three months of graduation. Here, the average age of our students would be about 30, but that figure rises significantly for our EMBAs. Meanwhile, the EMBA programme can last any time from two to five years, depending on your circumstances and the time you’re able to spend on it while working. Typically, you’d have had around seven years’ experience of work before studying for the MBA, but the profile of EMBA students shows that they’ve generally spent longer than that in the workplace, building their careers.” Learning from the best A common concern for anyone considering an MBA is whether the teaching staff will themselves have ‘real world’ business experience - not to mention whether or not their academic and teaching credentials are in order. Is the experience going to be like going back to school, or will it be challenging, life-enhancing and fresh? Robert Chater, Executive Director, emphasises the fact that at Hult: “There is a total focus on the classroom experience and our mission is to get the best professors we can. All our staff are assessed by three all-important criteria: 1) Academic excellence 2) Practical experience 3) Teaching expertise These three core values help us build the best faculty we can.” Dr. Amanda Nimon Peters adds that: “The performance of all faculty members is monitored to

Acid test: what does an EMBA student have to say? To gauge the real relevance of an EMBA to the life and aspirations of a hardworking senior manager, we spoke to Hult Executive MBA student, Jacob Lebo. He gave us this remarkably candid

Every student takes part in a six-week Action Project, developing core skills in the context of hands-on consultancy for a real company.

profile of how the degree has impacted his career, skillsets and capabilities. (Note: It’s interesting that Jacob has already reaped the rewards of his long, demanding studies - having recently been offered a senior position close to being the job of his dreams – as a direct result of an MBA research project). “The MBA was incredibly helpful both in giving me this hallmark qualification on my resume and then allowing me to apply this knowledge ‘in real time’. Being able to list an MBA on your professional credentials certainly makes decision makers stand up and listen. As far as its practical value is concerned, being able to apply what I’ve learnt from the classroom in my day to day business dealings is incredibly powerful. “In terms of how I secured a new position, I was asked to perform a case study in my final interview. Needless to say case studies are right in the wheelhouse for an MBA student. After many hours of hard work I walked confidently into that meeting, delivered

a well-researched and practical proposal, and won the job. The MBA helped me refine my presentation delivery, provided new tools to analyse business opportunities, and gave me the ability to take my innovative ideas and structure them in a way that drives action. I most definitely wouldn’t have been at the level I am now without the MBA. “My view is that MBAs are most valuable to entrepreneurs (SME directors), or senior managers in an organisation of a certain maturity. In the case of the SME director - likely the owner - an MBA will give him or her the skills to work on the business, not in the business. This is primarily because you will gain the ability to properly manage finances and cash flow, something every business struggles with. I would also suggest that the MBA makes you more credible and attractive in the eyes of financiers. You can more easily approach private equity or bank financing and deliver exactly what is needed to win. “How difficult is it to fit an MBA around the demands of a challenging job? Incredibly. Honestly, my classmates who have kids, I do not know how they do it. Luckily for me, it is just me and my wife and she is beyond supportive. But you better strap in and get ready. I cannot tell you the number of nights when I’ve had only three or four hours of sleep, repeated throughout the week, and yet I’ve still had to deliver. You had better be mentally, emotionally, and physically ready to take on one of the most rewarding challenges of your life. If you are an SME owner, I hope you have a great business partner or understanding lieutenants to take up the reigns. If you are senior managers, this is where the mature organisation is vital as you will need your boss’s full support. But in either case, the payback period is immediate. The EMBA is not for the lazy or weak of spirit. If what I said scares you then maybe this isn’t for you...but I wouldn’t have it any other way.” How about you? Will you carry on doing what you’ve always done - or strike out and leverage critical change through an MBA programme?

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May 2013

Workspace

Do you value Values? Every SME owner or director knows the difficulties of creating a focused, committed workforce only too well. Do your employees properly reflect the values of your business, or are they simply individuals with their own agendas and commitments? Do their efforts resonate with your own values and expectations or disappoint at every turn? We asked Rob Haden, Director of Strategy and Executive Coach at biz-group FZ LLC, to explain the importance of a values-driven workforce - and how to get one.

ver wondered why some of your employees seem to be ‘your kind of people’ and some of them don’t? The answer is: because of their values. Values drive behaviour, and we make judgments of other people based on their behaviour. We might talk about someone having the right or wrong ‘attitude’, but what we are really saying is that they are, or are not, behaving in the way we expect of them. So, if we want people around us to behave in a particular way, we have to find people who have values that cause them to behave like that. For example, let’s say you value ‘going the extra mile’ to satisfy clients and meet deadlines. If you think about the behaviour you would expect to see when someone is ‘going the extra mile’, it might typically include staying late (willingly!) to get something finished, working over breaks to avoid disrupting the flow of work, or coming in occasionally at the weekend to sort something that wasn’t sorted during the week. It’s no good being disappointed or complaining that some of your employees, who have all the skills necessary to do a good job, just don’t seem to have the right attitude. You are confusing two things: their Competence (the skills and expertise they require to do the job well) and their Values (their core beliefs about life which drive their behaviours whilst doing the job). Which leads to this question: does your organisation recruit against Values or against Competencies? Unenlightened companies still tend to recruit against Competencies – and mainly Technical Competencies at that. In other words, they only look at a candidate’s technical skills, without drilling down for evidence that the person will be able to behave, over a sustainable period, as the organisation requires them to behave. Having said that, more and more companies are taking an interest in Behavioural Competencies – and rightly so. It can be extremely disruptive if someone isn’t able to behave in the way that is expected. We all know people who are technically brilliant (I bet you could name a few in your organisation), but they are a total nightmare to work with! And why is this? We’re back to Values… they were not recruited against the company values, and therefore it’s hardly surprising they don’t behave as the company wants them to behave. Aligning the expectations From both the corporate and human perspective, it is essential that company and personal values align. If they do not, then an individual simply will not be able

to sustain peak performance over any length of time; very soon, they will become thoroughly miserable. As an illustration, here’s the story of a client of mine, told with his permission. Pete is an accountant, who had worked in the 90s for two companies specialising in supplies for the construction industry. In 2002, he decided to branch out on his own. He wanted to offer affordable accountancy support to smaller firms supplying the construction industry by creating a small band of brotherly Accountants-in-Partnership, operating in an ‘equal input, equal take’ kind of way. Clearly, there was an ‘equality’ value at work in Pete – one he found energising, which is the behavioural response a value should rightly produce. Five years later, the enterprise had grown to four partners and a number of supporting staff. The partners were exploring ways to expand the business, and the decision was taken to change its shape in order to grow it. This involved making the structure of the company more formal and hierarchical; one of

From both the corporate and human perspective, it is essential that company and personal values align. If they do not, then an individual simply will not be able to sustain peak performance over any length of time. the partners would become the CEO (not Pete) with the other three reporting to him. Although Pete had concerns about the new arrangement, he didn’t put up much of a fight; he thought he would be able to adapt easily to his new role as a Senior Partner. What actually happened took Pete by surprise. Within a short time he was thoroughly miserable. His client-facing role was not affected because the values he held around being an accountant were not challenged. However, he found he was unable to perform as required as a Senior Partner because his driving equality value had been well and truly turned on its head by being forced to operate within a hierarchy. Pete still had ‘Partner’ in his job title, but he was no longer in partnership. In the end Pete left, breathed a sigh of relief, set himself up as an independent Accountant, and started

May 2013

Workspace

to work again according to his own (rather than someone else’s) values. Knowing what your values are By this time, you may be wondering how you identify your corporate values, or you may have corporate values and are wondering if they are the right ones. In a 1996 Harvard Business Review article entitled Building Your Company’s Vision, Jim Collins and Jerry Porras suggested this approach to discovering core values: “…in many situations we have recommended a Mars Group. It works like this: imagine that you’ve been asked to re-create the very best attributes of your organisation on another planet but you have seats on the rocket ship for only five to seven people. Whom should you send? Most likely, you’ll choose the people who have a gut-level understanding of your core values, the highest level of credibility with their peers, and the highest levels of competence. We’ll often ask people brought together to work on core values to nominate a Mars Group of five to seven individuals (not necessarily all from the assembled group). Invariably, they end up selecting highly credible representatives who do a super job of articulating the core values precisely because they are exemplars of those values – a representative slice of the company’s genetic code.” Let’s translate that into a thought exercise. • Bring to mind two or three employees who you think are definitively the right kind of people you want in the company (the sort about whom you say, “I wish we had a hundred more like them!”). • Bring to mind two or three people who just don’t seem to fit (which in itself might be causing you to wonder why they are still in the company). For each person that you’ve nominated, write their name on a piece of paper (to be destroyed after the exercise!) and answer this question for each one: • “What does this person do or not do that causes me to say what I’m saying about him or her?”

Rob Haden, Director of Strategy and Executive Coach at biz-group FZ LLC

Having made a first, brave attempt to discover your core values, it’s important you bring them to life with language that means something in your company.

For each person, keep asking the question over and over until you have written down as many examples as you can of what they do or don’t do that makes them a good fit or a poor fit for the company. Once you have done that, you will have two lists of behaviours: those you expect to see and hear in the company and those you do not. You will see a correlation between the two lists: Syed willingly stays late when required, Mary does so begrudgingly when asked; Tasmin keeps on going until she solves a problem, Steve gives up after the first attempt… and so on. You should start to see the underlying values emerging: Syed values and exhibits flexibility, Tasmin values and exhibits perseverance, and so forth. Having made a first, brave attempt to discover your core values, it’s important you bring them to life with

language that means something in your company. For example, flexibility might become ‘Bend and stretch’ and perseverance might be expressed as ‘We never give up’. Then, over time (maybe six months) you can check whether ‘Bend and stretch’ and ‘We never give up’ truly are part of the soul of your company. Here are two killer questions that will help to confirm whether or not you’re looking at a core value. 1. “If someone violated the value, would you fire them (perhaps not the first time, but certainly if they persisted)?” 2. “If you had to pay a heavy financial price to live up to the value, would you do so?” If the answer is yes to each question, you’ve discovered a core value. If no, the idea might be an operating procedure but is not a core value – it’s just not important enough. Collins and Porras suggest that most companies tend to have between three and five values: “To identify the core values of your own organisation, push with relentless honesty to define what values are truly central. If you articulate more than five or six, chances are you are confusing core values (which do not change) with operating practices, business strategies, or cultural norms (which should be open to change). Remember, the values must stand the test of time. After you’ve drafted a preliminary list of the core values, ask about each one, “If the circumstances changed and penalised us for holding this core value, would we still keep it?” If you can’t honestly answer yes, then the value is not core and should be dropped from consideration”. Deciding to value values more will turn out to be one of the smartest business decisions you will ever make. Once you have articulated them clearly, they will underpin for evermore your corporate decision making, your policies for hiring and firing, your appraisal process, your criteria for rewarding employees, and a whole raft of other HR and business functions. In short, they will be the foundation on which your empire is built.

May 2013

Doing Business

Made in China: close-up on the China Sourcing Fair Buyers in the MENA region have been active participants in Dubai’s China Sourcing Fair – the largest China-products exhibition in the Middle East. Now in its seventh year, it continues to provide a successful and productive sourcing platform for global buyers and suppliers.

aunched in Shanghai in 2005, the China Sourcing Fairs quickly caught on in the world’s key markets. Today, the Fairs are organised in Hong Kong, India, South Africa and Dubai. The event has one sole focus – to provide buyers with a direct and personal access to a large number of suppliers from China, Hong Kong and Taiwan. Whether you are a shopping at a discount retailer or a high-end department store, it is likely that a great many of the products you come across are made in China. Throughout the MENA region, traders, buyers, distributors and purchasing teams from large-scale multinational retailers have been turning to manufacturers in China as the first stop in their product-buying process. When considering price and quality, China is one of the benchmarks, by which all other markets are judged. The annual Dubai China Sourcing Fair brings its professional and quality sourcing platform to buyers in the MENA region with a large selection of Chinese suppliers. The event will be held at the Dubai International Convention and Exhibition Centre from May 28 to 30, 2013. It will feature exhibitors that produce consumer electronics, gifts and premiums, home products, garments and textiles, children’s products as well as hardware and building materials. Dubai: The centre of trade in MENA Five years ago, the organisers, Global Sources, were faced with an important decision – which city would be best to host the event? Dubai emerged as a

logical choice being the third largest reexport market in world (after Hong Kong and Singapore). “For this side of the world, a lot of the region’s international trade goes through Dubai,” said Bill Janeri, General Manager at Global Sources. “Hence, to meet our objective of organising the show closer to where buyers in MENA are or want to be, Dubai was the logical choice. It is centrally located, has a strong multicultural business community, and has an international-trade focus.” Forefront Electronic Technologies, a China-based maker of GPS devices, printed circuit boards, and speakers, have been working with buyers in the region for years. “We look to Global Sources and the Dubai China Sourcing Fair as a way to expand our network of customers in the region, as we help those customers expand their business,” said Flanks Lin, General Manager of the company. “We’ve been working with customers in the region for more than 10 years. We’ve learned a lot about how companies operate and how our products can best serve their customers’ needs. It’s been a positive experience,” expressed Lin. “As an economy stabilises and expands, so does its middle class. A growing middle class brings more disposable income and a growing demand for consumer products – like mobile phones, largescreen TVs, and other nice items for the house,” added Janeri. “At the same time, in many of these markets, the product distribution systems are becoming more sophisticated. These markets are making the transition from ‘Mom and Pop’ shops to networks of world-class retail outlets, on par with those in any other market in the world. To fill those shelves, importers and purchasing managers look to China for well-made products at price points where the retailer has more flexibility with the margin it charges.” Meanwhile, China’s suppliers are quickly adapting to the continually shifting product trends, such as those in environmentally friendly ‘green’ products. “For nearly 10 years, we’ve been exporting to buyers in the MENA region, including Dubai, Doha and Oman,” says Shengyang Chen, General Manager at Zhejiang Ruiming, energy-saving doors and windows. “Energy-efficient

doors and windows are our specialty. As buyers focus on green technologies, we feel our products can only benefit their new construction projects. We see the hardware and building materials section of the Dubai China Sourcing Fair as an opportunity to meet new buyers from the Middle East and to help them meet this demand,” added Chen. Doing international trade with ease With the emergence of the Internet over the past 15 years, trade around the globe has never been easier. Trade shows, however, continue to play a critical role in the product-sourcing and supplierevaluation process. For the past 42 years, Global Sources (www.globalsources.com) has built its business on bringing together the world’s buyers with Asian manufacturers. “Email and the Internet have certainly made trade easier and faster,” said Janeri. “However, when you’re investing thousands, hundreds of thousands or even millions of US dollars with a supplier, ultimately you want to sit across the table from them and look them in the eye. You want to see how they operate. You want to meet the management team you’ll be working with. You want to evaluate, face-to-face, whether this is a company you can work with. By bringing these suppliers to the buyer, the China Sourcing Fairs make that part of the process so much easier than it has ever been in the past,” added Janeri. The brands behind the brands China produces a dominant share of many of the world’s consumer products. Over the past 20 years, the quality of those products has improved exponentially. Today, many of China’s exporters operate at ISO standards and have various international productsafety certifications. Janeri said: “It is no longer the case of ‘Can China produce it?’ – China already produces it. The question today is – What level of quality the buyer wants? What quality level that buyer’s customers are demanding or are willing to accept?” “Many of the exhibitors at our China Sourcing Fairs have been exporting globally for years and for some of them, decades. They are the ‘brands behind the brands’, manufacturing products for some of the world’s leading companies.

Bill Janeri, General Manager, Global Sources

Many of the exhibitors at our China Sourcing Fairs have been exporting globally for years and for some of them, decades. They are the ‘brands behind the brands’, manufacturing products for some of the world’s leading companies. By coming to Dubai as part of the China Sourcing Fair, these companies are hoping to meet and do business with new buyers in the region,” concludes Janeri. “We’ve been exporting around the world for more than 22 years, but we’ve only just recently started to focus on the MENA market,” said Guanqun Wu, Sales Manager at FuJian Quanzhou Peak Sports Products, which produces for multinational brands, including PEAK sports apparel. “This is a region where demand for sporting goods is expanding rapidly. With our long history and brand leadership, buyers in the region will find great quality and value in our product line. We are anxious to work with them,” said Wu.

May 2013

Marketing Are events for SMEs? The thought that comes to mind, when thinking of an event, is an extravagant affair – and for businesses, perhaps a chunk of their marketing budget. This perception might cause small businesses to hesitate when it comes to hosting an event? Speaking to Katiela, we uncover the potential events may have for SMEs. “In fact, events are a must for SMEs. As an SME, you need ambassadors and you can do this through an event. You need loyalty - people that are communicating and talking about you to the rest of the region. This is very crucial. They create PR free of charge but, of course, in a controlled, sophisticated, smart investment sort of way.” “Within the events industry, it’s not just working with big companies and big budgets. It is also about working with small budgets and projects that are just born and to build them as they grow.”

Show me some ‘Emotain’ Events can be a useful addition to an SME’s marketing mix, as we discover in an exclusive interview with Sam Katiela of Mamemo Productions.

“

Events are a chance to celebrate, socialise and access people’s minds. It is, all in all, an attractive tool that people should, will and have to invest in,” says Sam Katiela, Managing and Creative Director at Mamemo Productions. Acknowledging the rising number of events in the region, Katiela adds, “Events are pivotal, especially in this part of the region where you will have surely heard the story of the Majlis (it’s a place where

a warm welcome and social gathering is a must). You need to entertain, talk to and welcome people. You need an opportunity to express yourself and this works only if you have a platform to do this.” “Events have evolved to become more professional and thoughtful. People in this country and region are extremely educated when it comes to events. They understand the quality of the event and this makes it important to invest smartly in your event.”

Turning events into an experience When organising a company event, it is essential to pause and ask yourself – what makes this event stand apart from the many others happening in the region? Businesses can ensure that their events leave a lasting impression by transforming their event into an experience. Katiela explains this further, “When a company decides to hold an event, it is always a special moment for them which requires complete attention. It is like a wedding where the brand is the bride and comes on stage to show off her beauty. You are showcasing your brand and you want to ensure that your audience enjoys, engages, and takes something home with them.” He adds that events almost always have an emotional side where the audience of the event need to be emotained – entertained alongside creating an emotional bond with the brand. “The event should be more than just performed entertainment. It should have a story that makes the customers think about the brand even when they go back home. They should understand the message you’re trying to send. It is something that is consumed, not simply a case of ‘enjoy and leave’. In this way, whenever they think of the brand, they have a good feeling from the event that they can associate with.”

the brand. It creates the possibility of accessing people after the event and to reinvite them in your personal environment like an office or a showroom, listen to you and create a purchase. It should be like an emotional door opener.” How much is too much? Firms, especially small businesses, often have so much to communicate to their customers. Therefore, when they hold an event, they are tempted to fit everything into it hoping to make the most out of the opportunity. This approach could, however, prove to be more detrimental than useful. Katiela explains, “Companies have a lot to sell and want to do everything at Events vs. other marketing tools The increasing popularity of online marketing tools and emerging technological innovations pose quite a dilemma for businesses, particularly small businesses with a limited budget, to choose between an event and other marketing tools. Addressing this predicament, Katiela says: “We are living in an artificial world. We have social media, BBM, and much more making the world very fast paced. However, this kind of interaction is very surface level. Events give you the opportunity to get to a get deeper level. It is an attractive tool to get them out of this rut and interact with them. You get closer to your target group, to shake hands and talk to them. People are desperate to get in touch with the product and the brand and the people behind.” He gives credit to other marketing tools for being effective as well but emphasises that events provide a physical interaction that, in most cases, can’t be achieved otherwise. However, unlike other marketing tools, events may not be able to provide measurable results. “It really depends on what you want to sell. There could be three goals you wish to achieve from an event; selling a product, sending a message across or creating brand awareness. Assuming that you are looking to sell a product, the amount of leads you create would determine the success of the event.” “However, the event should never have the perspective to sell, especially on the day of the event. It could appear as a desperate attempt to make sales. It is more important to convince them to trust

Events are pivotal, especially in this part of the region where you will have surely heard the story of the Majlis. You need to entertain, talk to and welcome people. You need an opportunity to express yourself and this works only if you have a platform to do this.

the same time. What they need to do is take the star or feature aspect of their product line or presentation and focus on that. For instance, in the case of a car company, they showcase their best car at the event but let their audience know that they have many other options. So people are attracted to the brand and come back asking for more.” He suggests that companies shouldn’t try and incorporate everything into one event. The event should be limited to highlighting one main feature or product that attracts attendees to the brand and its style - essentially like a teaser. This affinity to the brand will make them curious about what else you can offer to them. Success recipe for SMEs If you are an SME new to the events landscape, Katiela provides some clear advice. “Most people don’t exactly know what they want out of the event. So first, you need to understand what you are looking to achieve.” He explains that businesses, especially SMEs, lose track as they are so motivated and have huge dreams for their event. “You definitely have to be careful with the money that you invest as an SME. Don’t try to have everything, have a few things but they should be really good. For instance, if it’s a product launch, ensure that the stage and lighting is the best, but the other aspects are simple and not extravagant. You have to choose what you really want.” “Events are essential for SMEs but should never be too crazy. It is better to invite fewer people but feed them well. Select what kind of people would be best and invite them rather than a lot of people. For instance, it is better to have an event for 50 people with really good service rather than 200 people.” Katiela divides this thought process into two categories. The minimum principal – where you ascertain a goal in mind and try to achieve it at the lowest possible cost. The maximum principal – on the other hand – is deciding a budget and then trying to get the maximum out of it. He recommends the former for SMEs while organising an event. “There will be companies that will promise you the ‘heaven on earth’. However, you need to be logical and have an aim. With your goal in mind, try to get it at the minimum cost possible,” he advises.

May 2013

Marketing

Sadia Noori, Deepali Naair and Fadi Khater at the 1st MENA Social Media and Mobile Marketing Conference for Insurance

Join the (social media) Revolution On April 22-23, a pioneering new conference at the Al Murooj Rotana, Dubai, analyzed in depth some of the key issues and opportunities that the overwhelming move to social media and mobile marketing poses for insurers. SME Advisor was delighted to be a key media partner while Editor, Paul Godfrey, moderated day two of the event – and found that just about every session was a thought-provoking learning curve…

any owners and directors of SMEs may feel that if only their business had more size, staff and resources, they would be better-placed to take advantage of the profound marketing opportunities that the social media revolution is opening up. So it might be comforting to learn that the vast majority of the region’s insurers which can, of course, be large companies with several hundred staff - have not seized the moment and currently find themselves in a state of a quandary as to whether to commit wholesale resources to a social media interface.

This was one of the disturbing lessons to emerge from the two-day event: a few key-name insurers – the likes of Farmers (in the USA), L&T General Insurance Co. Ltd. (India) and SALAMA (UAE) – are already reaping terrific rewards from a detailed dialogue across the raft of social media platforms, especially Linkedin, Facebook and Twitter. Yet many of the rest are far behind. Knowledge is power Let’s take an extraordinary example from the opening paper of Day Two, presented by Fadi Khater, Founder & Managing Partner of Netizency.

He showed that the social media interfaces have a key value that many businesses (and indeed, whole industry sectors) are simply not aware of - the power to deliver an incredible wealth of consumer data. For example, he showed that in Saudi Arabia during 2012, there had been more than 780,000 enquiries about consumer insurance lines, many of them in relation to Life insurance and Home & Contents cover. Yet this contrasts completely with insurers’ perception of the Saudi consumer market, which is seen as tremendously resistant to change, with relatively little interest in consumer insurance. Hence, the

argument runs, it has an extremely low insurance penetration rate of around 0.8 percent. (The insurance penetration rate is the proportion of national GDP we see being allocated to insurance spending). In the USA, this figure is 14 percent, in the UK, 16 percent and in India 9 percent. So why should there be this astonishing gap between customer interest and the insurers’ perception of market appetite? Insurers have historically been slow to react to technological and demographic change. One of the prime examples is how the major Life offices - at one time among the largest organisations in the world - were still using massive field sales forces to knock on doors long after widespread social changes meant that there would very often be no-one there to answer (with markets like western Europe experiencing the dramatic transformation that put 48 percent of women in the workplace). Yet the transition to active social media participant can be made without tears - and perhaps there is a good lesson here for SMEs, in that insurers who have made the leap have done so through using a blend of social media and more traditional marketing channels. A case in point is that of L&T General Insurance Co. Ltd., a relative newcomer to the burgeoning Indian insurance scene, who - through smart use of mixed media - have been able to take a good deal of attention away from the established titans. In a paper titled ‘Growing brand awareness and social capital’, Deepali Naair, Country Head of Brand, Corporate Communications & Customer Service, showed how she launched a variety of targeted social media campaigns in liaison with a season of primetime TV ads, which took as their theme the Indian catchphrase, ‘can you put it in writing?’. The social media campaigns were minutely tailored to regional tastes, able to touch a chord with people’s needs and expectations, yet feeding on the valuable platform of familiarity built up by the high-profile TV slots. One of the factors emerging from Deepali’s presentation was the huge importance of monitoring the level and tone of the responses: it was possible to track in minute detail to what extent the company’s messaging was liked, disliked or was simply failing to provoke a reaction. This enabled L&T

to achieve substantial competitive edge over competitors with ostensibly much higher budgets. The danger of ‘bandit’ messaging A key theme of the conference was the importance of senior management/ Board of Directors taking direct responsibility for all outward-bound social media messaging. A number of disturbing examples were given whereby staff had embarked on their own ‘bandit’ responses to customer complaints, sometimes wholeheartedly agreeing with customer criticism and overtly trashing the company, saying it was ‘rubbish’ to work for! The clearest example (along with one of the most comprehensive and detailed

Yet the transition to active social media participant can be made without tears and perhaps there is a good lesson here for SMEs, in that insurers who have made the leap have done so through using a blend of social media and more traditional marketing channels. papers of the conference) came from Sadia Noori, Marketing Manager - Family Takaful, SALAMA, in her presentation ‘Social media for improving customer service and handling complaints’. She explained how, in her previous job with one of the UAE’s leading banks, several clusters of staff had ‘broken away’ and started their own bandit messaging on Facebook. They had been overtly critical of the company and its customer policies, encouraging customer dissent - and even posting group photos showing ‘solidarity; in their opposition to the bank. This went on several months before events came to the attention of the Directors. The result was a 360-degree turnaround by the bank, and a firm commitment to a centralised social media initiative.

This is a worrying factor for larger SMEs, whereby there could be irreparable damage to share price and valuation through the spread of negative publicity. The moral of the story here is to take control of all messaging at the earliest possible stage, embracing all the challenges - because any amount of effort is better than the humiliation of an undetected ’bandit’ initiative. No going back – so reap the rewards The importance of embracing the technology and maximising its positive aspects was emphasised by Dr. Sven Olaf Vathje, of the Boston Consulting Group (Dubai). He explained how the opportunity now existed for insurers to engage customers and understand their needs like never before. This is an age in which there is no more ‘plain vanilla’ and customers want special bundles of services - all of which businesses need to understand precisely. There is no better way of doing that than via social media, which also has the advantage of unbeatable speed and directness. For example, compare the cost discrepancies between booking faceto-face appointments and speaking to a customer online - not to mention how cumbersome and slow the old processes now appear to be. Getting the money! Many businesses have held back from engaging in social media because they believe the investment, development and reward curve is simply too long. Not so, according to Gary Jackson, Director of Business Analytics, AsiaPacific & Japan, CSC. He proposed – in a paper called ‘The Socialytics Experiment: how to use social media to generate revenue in 180 days’ – an extremely clear, structured number of steps whereby a business can shorten that income redemption curve. A company can determine its goals, obtain expert (but affordable) development personnel, create ‘trial runs’, go live and reap the rewards all in less than 180 days. Will this ease the social media path for those insurers who haven’t as yet been part of the revolution? The reality is that if they don’t do something of the kind, it will simply be too late: not just for their communication strategies, but for their businesses.

May 2013

Legal

The power of the patent Globalisation is no longer the exclusive province of multinational companies, but a prime target for ambitious SMEs. Companies large or small should consider international markets – especially if they have a unique product that’s simply not available elsewhere. If that’s the case, it pays to protect the uniqueness and originality of those ideas and seek patent protection in multiple countries. Al Tamimi’s Stephen Jiew explains what to do…

nderstanding the Patent Cooperation Treaty (PCT)

The World Intellectual Property Organisation’s Patent Cooperation Treaty (PCT) provides the means to facilitate the filing and protection of patents internationally. It’s a very popular protocol because it’s specifically designed to do away with the need to submit multiple patents everywhere you go. For example, in 2011 alone, more than 181,000 international applications were submitted. This is the most international of all patent applications and secures an effective filing date in all of its member countries. Its membership comprises a

large number of countries and the list continues to grow. As of 2013, the PCT system has been adopted by 146 countries including numerous countries in the Middle East and North Africa, including:

• Algeria • Bahrain • Egypt • Libya • Morocco • Oman

• Qatar • Sudan • Syria • Tunisia • UAE

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The PCT patent application filing system includes two phases: Step One: the International Phase The international application is filed and an International Search Authority undertakes an international search. This generates a search report containing citations of relevant ‘prior art’, along with a written opinion on the patentability of the invention. The application is published as an International Publication and the applicant has an option whether to undertake international preliminary examination of an application. Step 2: the National phase The national phase application is effectively filed in the various countries in which the applicant is ultimately seeking patent protection: it is at this stage that the application is substantively examined and a decision is taken to grant or reject a patent. It’s important to note that a PCT application does not mature into some kind of “international” patent registration. It merely acts as a vehicle facilitating the filing applications at each of the national patent offices of the member countries an applicant is interested in. The PCT system provides for a “delay” of up to 18 months in having to incur the expenses of proceeding with applications at each national patent office of interest and accordingly buys an applicant valuable time in seeking funds from investors, finding partners or just to reassess the commercial viability of an invention. The time bought through the use of the PCT system also affords applicants more time to reflect on the desirability of seeking protection in foreign countries, to appoint local patent attorneys in those countries, to prepare the required translations and to pay the local fees. Applicants may rest assured that their PCT-compliant national applications may not be rejected on formal grounds by any of the national offices during the national phase. They also have the benefit of the international search report

and the written opinion to better assess the patentability of their inventions. Importantly, they have the opportunity of amending their international application before processing by the national offices. Foreign applicants should note that a number of countries in the Middle East are not PCT members including Saudi Arabia and Kuwait. Apart from

It’s important to note that a PCT application does not mature into some kind of “international” patent registration. filing directly in these countries, a GCC patent application could be an appropriate tool for seeking patent protection in these countries. GCC Patent System The GCC patent system provides a convenient way for applicants to secure patent rights effective in each of the GCC member states. As many SMEs will be aware, since the GCC is a trade bloc, it provides a common market, including coordination of customs regulations and various trade-related laws. There’s even an ongoing proposal for a unified currency (currently under discussion). The GCC patent system does not form part of the Patent Cooperation Treaty (PCT) nor is it a signatory to the Paris Convention. However, it is important to note that the GCC Patent Office (“GCCPO”) honours the Paris Convention priority rules and a GCC application can claim priority from a prior convention application as if the GCC were a signatory to the Paris Convention. Paris Convention The Paris Convention allows an applicant to delay the filing of a patent application in another member country by up to 12 months as long

as the applicant has filed a patent application in one member country. The practical benefit is that once the patent application is filed, the applicant can disclose the invention e.g. by selling products embodying the invention and still obtain patents for the same invention in other member countries of the Paris Convention providing that applications are filed within the 12 months grace period and a claim to Paris Convention priority is made. Upon filing, examiners at the GCCPO examine a GCC patent application for compliance with formalities. The applicant then has an opportunity to address any objections arising from the examination of formalities. Substantive examination is then undertaken on behalf of the GCCPO by IP Australia, the Austrian Patent Office or the Chinese Patent Office. Once the applicable patent opposition period has expired, and the GCCPO has granted a patent, the grant of the patent may be challenged before the responsible authority in Saudi Arabia - the Board of Grievances. With respect to the enforcement of GCC patents, claims of patent infringement are heard by the responsible courts in the relevant GCC member states where the infringement is alleged to have taken place. For local UAE applicants, a common strategy is to file a UAE application followed by a PCT application if overseas markets outside of the GCC common market are of interest. Otherwise, if only the GCC countries are relevant to, say, a purely GCCfocused product, then it would of course be expedient to file, first and foremost, a GCC patent application. The PCT and GCC patent systems are valuable tools at the disposal of patent applicants as they facilitate the protection of patents in multiple jurisdictions. If you require any assistance in respect of the protection and enforcement of patent rights in the Middle East, please contact the author at s.jiew@tamimi.com

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The Relationship Revolution has Begun. Your relationship with customers has changed forever. They’ve taken control of the conversation, expecting to connect when, where, and how they want. Here’s how to meet their demands, and stay in the conversation.

May 2013

INDUSTRY WATCH

TOP Travel DESTINATIONS The Travel and Tourism Competitiveness Report ranks 140 countries according to their attractiveness and ability to develop their travel and tourism industries.

he fifth Travel and Tourism Competitiveness Report, released by the World Economic Forum in strategic partnership with Booz and Company, revealed that Switzerland, Germany and Austria lead the world in terms of their travel and tourism industry competitiveness. Spain, United Kingdom, the United States, France, Canada, Sweden and Singapore completed the top ten on the list. The report published with a theme of Reducing Barriers to Economic Growth and Job Creation marked the movement of countries from their previous rankings. This was seen as France fell four places from third in 2011 to seventh, while Spain climbed to fourth from eighth. On the other hand, countries like the George Atalla, Partner with Booz and Company United Kingdom and Canada showed improvement moving up - two places to fifth and one place to eighth respectively. Alongside Switzerland and Germany, the United States and Singapore maintained their positions, in sixth and tenth places, respectively. Sweden, the only other country in the top ten to fall, dropped from fifth to ninth. Developed economies like New Zealand and Japan improved strongly while emerging market economies reported mixed levels of progress, with India being the only BRIC nation to move up in the rankings. In this category, rising stars include Panama and the Philippines. The report provided an insight into how countries are fostering the development of their travel and tourism industry. In addition, it offered an overview of the health of the industry and its role in driving global economic growth.

MENA region In the MENA region, the UAE emerged as the top performer. “The UAE, ranked 28th in the global Index, continues to lead the region due to rich cultural resources and a slew of international fairs and exhibitions,” said George Atalla, Partner with Booz and Company. “Despite the impact on natural resources, the country has managed to build a thriving travel and tourism industry. It is also a world-class international hub for global air travel.” Following on the second place for the region was Qatar (41st globally), a nation that boasts well-developed ICT and tourism infrastructures as well as excellent air transport and sports infrastructure.

The UAE, ranked 28th in the global Index, continues to lead the region due to rich cultural resources and a slew of international fairs and exhibitions. Ranked fourth in the MENA region, Bahrain has fallen 15 places since the 2011 assessment due to security concerns. However, the country maintains a number of clear strengths. Those include a highly-evolved transport infrastructure, skilled human resources and strong price competiveness. Lebanon ranks eighth in the region and 69th overall with a number of cultural attributes, including five World Heritage cultural sites and some creative industries. “Egypt, ranked 10th regionally, drops 10 positions in the global assessment to reach 85th overall, probably the result of the continuing unrest in the country. Most notably, the evaluation of the safety and security environment has dropped to the lowest position of all countries covered in the Report,” added Atalla. The Travel and Tourism Competitiveness Index covers 140 countries and uses a combination of data from publicly available sources, international travel and tourism institutions and experts. It also incorporates the results of the Executive Opinion Survey, a comprehensive annual survey conducted by the World Economic Forum and its network of partner institutes (research institutes and business organisations) in the countries covered by the report. The survey provides data on many qualitative institutional and business environment issues.

Digital marketing vital for SMEs The online platform offers a multitude of opportunities for companies seeking to grow their business.

Bahaa Fatairy, PR Manager, Genesis Consulting ME

mplementing online marketing tool effectively can hugely benefit companies by extending their reach beyond their usual client base. In addition, the cost effective nature of online marketing makes it more appealing than traditional methods of selling and promoting. These features make Internet marketing of particular value to SMEs, according to executives at Genesis Consulting Middle East, a performance-driven marketing communication agency based in Dubai. The SME sector has been an invaluable driving force in the Middle East. Looking at the UAE, in particular, the SME landscape has expanded rapidly over the past years representing 40 per cent of the nation’s GDP, and is responsible for generating over 40 per cent of the domestic employment requirements. “While there is currently no research that underscores the extent of regional SMEs’ online marketing penetration levels, anecdotal evidence shows that some companies, unfortunately, are late to the game as

they fail to capitalise on possible sales leads that lie in cyberspace,” said Bahaa Fatairy, PR Manager at Genesis Consulting ME. However, this trend is noticed in other parts of the world as well. For instance, in the United Kingdom, less techsavvy SMEs are reportedly losing out on GBP 122 billion (AED 732 billion) in sales revenue by neglecting to develop and implement a sustainable marketing plan, particularly one that involves an online strategy, according to a survey published in March by the Centre for Economics and Business Research. Fatairy explained that as the market became more competitive, there is an increasing need for SMEs to embrace innovation as their plan of action in order to remain afloat. “Online marketing, for this matter, has been an ideal platform to promote and grow a company, not just within its home base, but also worldwide as recent media trends would suggest.” Online media has established an upper hand over print media during the recent years. This is a result of the increased number of users utilising the Internet for their daily information consumption. Furthermore, consumers are active on social media platforms like Facebook, LinkedIn and Twitter making it pivotal for companies to establish their presence online; with an aim to engage with existing and potential customers. “One of the major challenges that marketers and communication specialists in the Middle East face is the need to educate clients on the basics of online technology, web presence and social media – and how these can be adopted into their company’s growth strategy,” Fatairy explained. Unfortunately, many SMEs want immediate results and fail to appreciate the importance of understanding website audit, analytic analysis and gradual yet sustainable marketing improvements, he added. He also mentioned that consumers’ changing lifestyle and in-depth understanding of the digital environment are now constant reminders that companies need to update their marketing approach or continue to fall behind. “After considering all of these factors, the question remains: Are SMEs up for the digital marketing challenge? The list of tasks for companies will continue to grow as demand for new technology increases,” Fatairy said. “Adapting to those challenges is the key and companies need to understand that the path to either success or failure is basically down to interaction – positive interaction yields results and negative interaction yields pain.”

May 2013

INDUSTRY WATCH

Dubai real estate market recovers Apartments in Dubai Marina and Jumeirah Lakes Towers record increase in price according to a Hamptons report.

partment prices in Dubai Marina and Jumeirah Lakes Towers, two of the established lifestyle communities in Dubai, have recorded an average increase in price of eight to 10 percent according to a report from the Valuation and Research team of Hamptons MENA. Hamptons MENA is a full-spectrum property company and their Valuations and Research team undertakes regular evaluation of the property price trends in Dubai in order to offer expert advice to its clientele. The Hamptons team reported that the price gains in Dubai’s property sector is now broadening to more residential developments, highlighting wider recovery in property market sentiment across the city.

The growing interest in real estate across diverse developments highlights that investors see stronger value proposition in the city’s property, led by Dubai’s vibrant economic fundamentals.

Declan King MRICS, Valuation and Research Manager of Hamptons MENA, said: “The positive gains reported by property in Dubai Marina and Jumeirah Lakes Towers is testament to investor confidence in Dubai’s real estate sector strengthening across the board.” “Initially, the growth in demand and price was largely confined to selected neighbourhoods. The growing interest in real estate across diverse developments highlights that investors see stronger value proposition in the city’s property, led by Dubai’s vibrant economic fundamentals,” he continued. Premium towers in Jumeirah Lakes Towers that have traditionally been hugely sought after recorded similar growth trends. On the other hand, price gains by secondary apartments in the development were three to five per cent. Increased viewing activity and interest for units across primary and secondary towers in both developments are factors that support this finding. Offering Riviera-style living in a modern aesthetic setting, Dubai Marina by Emaar Properties is one of the first and largest of its kind waterfront developments in the region. With a total development area of 50 million square feet, Dubai Marina encompasses a large canal spanning 3.5 km of waterfront area offering access to the sea from both ends. Frilling the canal are waterfront living apartments. The project features several high-rises with luxury apartments as well as villas set against the backdrop of the Marina. Jumeirah Lakes Towers (JLT) Free Zone by Dubai Multi Commodities Centre, is a 200-hectare, mixed-use waterfront master development facilitating both business and community living by offering commercial, residential and retail property for sale and lease. JLT offers both a living and working environment with freehold and leasing options, and is home to over 35,000 residents and more than 5,900 companies. JLT’s prime location in close proximity to Sheikh Zayed Road, the main arterial between Dubai and Abu Dhabi, Al Maktoum International Airport, the Dubai Logistics Corridor, and between two operational metro stations, makes it an appealing address to live, work and play.

INDUSTRY WATCH

Consumers optimistic in the UAE Consumer confidence levels are on the rise in the UAE as reported by a MasterCard study. coming months (91.4), but that consumers under the age of 30 years (94.6) are more optimistic than older respondents (90.4). “Consumer confidence levels in the UAE have been steadily increasing in our most recent indices, reflecting a positive outlook for key sectors and confidence in the UAE’s plans and vision for the coming years,” said Eyad Al-Kourdi, UAE Country Manager at MasterCard.

Consumer confidence levels in the UAE have been steadily increasing in our most recent indices, reflecting a positive outlook for key sectors and confidence in the UAE’s plans and vision for the coming years.

he MasterCard Index of Consumer Confidence revealed that consumer confidence in the UAE is steadily rising, with a score of 91.4 as compared to 86.0 in the previous edition of

the Index. It discovered that consumers in the UAE are positive about all five indicators measured in the Index and extremely optimistic in their overall consumer confidence score. In comparison to its previous edition, the Index reported consumers are more optimistic about: • Quality of Life (95.6 vs. 88.6) • Employment (95.2 vs. 88.9) • Economy (94.6 vs. 89.1) • Stock Market (86.9 vs. 77.0) Furthermore, despite a slight decrease in its score in comparison to before, consumers remain to be very optimistic about Regular Income (84.7 vs. 86.2). The latest findings indicate that female respondents and male respondents are equally positive about the

Across the Middle East, the consumer confidence level remains very optimistic at an average score of 81.1, with encouraging scores for all five indicators. When compared to the previous edition of the Index, consumers are most optimistic about: • Regular Income (85.1 vs. 89.8) • Employment (80.8 vs. 85.5) • Economy (80.0 vs. 84.4) • Stock Market (79.9 vs. 74.9) • Quality of Life (79.9 vs. 82.9) Within the Middle East, consumer confidence remains the highest in Qatar, with a score of 96.5. Qatar is followed by Kuwait (95.8), Oman (95.6), Saudi Arabia (95.2) the UAE (91.4), Egypt (66.6) and Lebanon (26.8). The MasterCard Index of Consumer Confidence (“Index”) is based on a survey conducted between November 7 to December 23, 2012 on 11,339 respondents’ aged 18 to 64 in 25 countries within Asia/ Pacific, Middle East and Africa. This is the 40 th survey of Consumer Confidence conducted since 1993. The Index and its accompanying reports do not represent MasterCard’s financial performance. Respondents were asked five questions pertaining to their six-month outlook on the economy, employment prospects, the local stock market, their regular income prospects and their quality of life.

INDUSTRY WATCH

RECRUITING Emirati graduates A research study conducted by online recruiting firm, GulfTalent.com, in association with ten UAE universities, reported that UAE graduates prefer to work for government organisations over private sector firms and multinational companies in the UAE.

he study, Recruiting Top Emirati Graduates, reported that 86 per cent of Emirati male graduates and 66 per cent female graduates have a preference to work in the government sector after graduation. Following this, multinational companies came second on the list leaving UAE private sector firms of least popularity. A few reasons for this choice, as cited by respondents, were higher salary and benefits, better working conditions and greater job security. Abu Dhabi investment firm, Mubadala, emerged as the employer of choice for the majority of graduates while Abu Dhabi National Oil Company (ADNOC), Masdar (a subsidiary of Mubadala), Emirates Nuclear Energy Corporation (ENEC) and Abu Dhabi Executive Council followed. The study further reported that the graduates felt more comfortable in an Emirati workplace where their cultural values were understood and respected. They preferred working with other Emiratis with whom they shared common habits. Emirati females were keen to work in organisations with separate sections for women, either due to their personal preference or out of respect for their families’ concerns. According to the study, the specific criteria that formed the basis of their selection of an organisation included the following: • A challenging and interesting work environment – 72 per cent • Good training and development – 53 per cent • Good public image and reputation – 43 per cent

Graduates felt more comfortable in an Emirati workplace where their cultural values were understood and respected. With regards to their salary expectations, male graduates expected to receive a minimum amount of AED 27,000 per month (including allowances) whereas females expected to receive a minimum amount of AED 19,000 per month. The study also shed light on the influence that families have on the graduates’ career decisions. 94 per cent of females said that their family played a role in the decision making; which can range from giving advice only to the family actually making the career decision. A family’s

decision is largely determined by the public image of the company as well as the people within the company, revealed the study. Other questions addressed by the study included the importance of job location on the career decisions (most graduates prefer to work close to their home town) and graduates’ perceptions of the employment criteria (relevant work experience and relevant major being seen as key). Approximately one-quarter of the graduates cited personal connections or Wasta as a key factor in the employers’ recruitment process; they feel it helps to know someone already working for the company to which they are applying, as per the findings. Statistics from the UAE Labour Ministry show that over 90 per cent of the Emirati working population of 225,000 are employed in the public sector, with the rest working in the government or affiliated entities. The UAE private sector, despite employing over four million expatriates, is only home to 22,000 citizens. According to recent media reports, the UAE government is studying a number of measures to make the private sector more attractive for Emiratis by bringing its benefits more into line with those in the public sector. These reportedly include subsidising the salaries of citizens employed in the private sector, adjusting private sector working hours and days, as well as measures to boost job security for Emiratis in the private sector. GulfTalent.com’s study aims to help companies evaluate and improve their approach to recruiting Emirati graduates. It was based on a survey of 112 UAE youth who were about to graduate from university or had recently graduated.

workplace GENDER BIAS Women in the UAE feel that they have fewer career advancement opportunities.

ccording to the biennial survey of employee attitudes and workplace trends, Towers Watson’s Global Workface Study, 52 per cent of women in the UAE intend to leave their current employer within the next two years in comparison to 42 per cent of men and a global average of 28 per cent only. More than 1000 employees in the UAE, both male and female, participated in the survey. The survey revealed how loyal employees were to their current organisation with 31 per cent of women citing that they would stay with their current organisation if a similar job were available elsewhere in comparison to the more loyal 46 per cent of male employees. Towers Watson’s study found that a lack of trust in senior management and opportunities to progress in their careers elsewhere were found to be two of the top five reasons why a woman was likely to leave her current role. The research also found that 49 per cent of the women working in the UAE do not feel that they have adequate opportunity to advance in their career, compared with only 31 per cent of men and a global average of 27 per cent. A further 50 per cent of women also felt that their organisation did not provide adequate feedback on how they could advance in their career. “There is clearly a disconnect between female employees and their organisations in the UAE, employers should ensure that they effectively communicate the opportunities available within the

organisation and have clearly defined engagement strategies for their female employees to reduce the risk of voluntary departure,” said Marjola Rintjema, Senior Consultant for Talent and Reward Practice at Towers Watson. “Employers should focus on career of women in the UAE development for intend to leave their current both their female employer within the next and male employees, two years especially in terms of establishing and sustaining a transparent and well-defined career advancement of women working in the programme. A global UAE do not feel they have career framework that opportunities to advance in their career lets employees see potential career paths and understand the skills and competencies they need in order to follow those paths is of women feel their organisation does not a significant factor in provide proper feedback retaining top talent on how to advance in and maintaining their career engagement levels.”

52%

49%

50%

May 2013

TECHNOLOGY FOR BUSINESS

Adopting 3D printing technology 3D printing is disrupting the design, prototyping and manufacturing processes in a wide range of industries, according to Gartner, Inc.

nterprises should start experimenting with 3D printing technology to improve traditional product design and prototyping, with the potential to create new product lines and markets. 3D printing will also become available to consumers via kiosks or print-shop-style services, creating new opportunities for retailers and other businesses. “3D printing is a technology accelerating to mainstream adoption,” said Pete Basiliere, Research Director at Gartner. “It is a technology of great interest to the general media, with

demonstrations on science shows, on gadget websites and in other areas. From descriptions of exciting current uses in medical, manufacturing and other industries to futuristic ideas; such as using 3D printers on asteroids and the moon to create parts for spacecraft and lunar bases; the hype leads many people to think the technology is some years away when it is available now and is affordable to most enterprises.” The material science behind 3D printing processes and materials will continue to progress, and affordable 3D printers are lowering the cost of entry into manufacturing in the same way that e-commerce lowered the barriers to the sale of goods and services. As a result, the 3D printer market will continue moving from niche adoption to broad acceptance. This will be driven by lower printer prices, the potential for cost and time savings, greater capabilities, and improved performance that drives benefits and markets. “Businesses must continuously monitor advances to identify where improvements can be leveraged,” said Basiliere. “We see 3D printing as a tool for empowerment, already enabling

life-changing parts and products to be built in struggling countries, helping rebuild crisis-hit areas and leading to the democratisation of manufacturing.” 3D printers are now priced so that businesses of any size can invest in them and start experimenting with the myriad ways to monetise them. By 2016, enterprise-class 3D printers will be available for under USD 2,000. Early adopters can experiment with 3D printers with minimal risk of capital or time, possibly gaining an advantage in product design and time to market over their competition, as well as understanding the realistic material costs and time to build parts. Furthermore, enterprise uses for 3D printers have expanded as capabilities of 3D scanners and design tools have advanced, and as the commercial and open-source development of additional design software tools has made 3D printing more practical. Gartner believes that the commercial market for 3D print applications will continue expanding into architectural, engineering, geo-spatial and medical uses, as well as short-run manufacturing.

Fighting piracy Autodesk collaborates with the UAE Ministry of Economy to improve software licence compliance.

utodesk, Inc. and the UAE Ministry of Economy joined forces with an aim to protect intellectual property rights. The partnership will see them work together to improve software licence compliance through awareness campaigns, training workshops and inspections. With high demand for cultural products such as films, music and software, piracy has become a prominent issue. It is estimated that global piracy caused losses of USD 63 billion in 2011, with the Gulf region suffering a loss of approximately USD 850 million[1]. Juma Mubarak Feroz, Manager, Commercial Control

Department, Ministry of Economy stated, “The Ministry is looking to achieve the goal of enhancing consumer protection and enabling proper business practices. This will be in addition to affirming its commitment to provide a safe and competitive environment. It will continue to work with its strategic partners in the public and private sectors in order to promote and support the efforts to combat piracy and the violation of intellectual property rights. We encourage all rights owners to collaborate with the Ministry in order to achieve the common interest in eliminating piracy and

L - R: Ahmed Sanobar, License Compliance Manager, Autodesk, Adbulla Saif Al Talay, Head of Control Section, Dubai Office, Ministry of Economy-UAE, Juma Mubarak Fairooz, Director of Customer Service Center, Ministry of Economy-UAE, Kostas Samaras, Senior Manager, LC EMEA Emerging , Autodesk

copyright violations. These efforts have led to the UAE ranking as a top Arab country in fighting against intellectual property rights infringement.” Feroz added, “The administration of the Commercial Control Department of the Ministry of Economy, with the guidance of senior leadership, is keen to meet with the customers and strategic partners to listen to their opinions and suggestions regarding the development of piracy software.”

“The issue of piracy is one that extends beyond boundaries, often resulting in financial losses for companies and economies. Autodesk believes that professionals will benefit from greater awareness of this issue, as they may not fully appreciate the damage piracy can do to their business performance and reputation,” said Louay Dahmash, Territory Director at Autodesk Middle East. [1]

Source: BSA Global Software Piracy Study

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TECHNOLOGY FOR BUSINESS

Facebook’s AV Marketplace Facebook’s AV Marketplace expands internationally to offer Sophos’ free Anti-Virus for Mac.

ophos announced that the free Sophos Anti-Virus for Mac Home Edition is available on Facebook’s Antivirus Marketplace in English, French, German, Japanese and Spanish languages. The international Antivirus Marketplace connects individuals with free versions of IT security software from the world’s leading vendors. Sophos Anti-Virus for Mac addresses the growing concern about Mac malware, protecting home Mac users from all threats in all versions,

Sunil Choudrie, Product Manager, Sophos

including the current version of the Mountain Lion operating system, OS X 10.8.3, as well as OS X 10.4-10.7. It is available for free download from both the Sophos website as well as from the Facebook AV Marketplace. “The Facebook AV Marketplace is a destination for our more than one billion users to ensure they’re safe

from the latest security threats,” said Joe Sullivan, Chief Security Officer at Facebook. “To help our users keep their hardware better protected, we’re pleased to offer Sophos software for those using Mac devices.” “We continue to see significant global demand for our free antivirus tool. As Apple products grow in popularity, they’re increasingly attractive targets to hackers,” said Sunil Choudrie, Product Manager at Sophos. “By making this tool available on the Facebook AV Marketplace, we’re providing Facebook’s many Mac users with secure peace of mind; all of which is updated automatically.” Sophos offers complete security solutions available in a variety of deployment options, all with simple setup and management. The company also offers several free solutions including the aforementioned Anti-Virus for Mac tool, Sophos Mobile Security and UTM: Home Edition.

Managing data effectively Prevention of data leaks is a top priority for 41% of the companies surveyed. Confidential data when leaked, either by accident or malicious design, can lead to serious consequences especially in a company setting. In fact, in a worst case scenario, it may even cause a business to collapse. A survey conducted by the IDC marketing agency in December 2012 revealed that 41% are genuinely concerned about possible data leaks and have made prevention a primary objective. Furthermore, IDC reports that encryption, one of the most effective and reliable data protection tools, is becoming increasingly popular. Generally encryption technologies fall into two categories, File and Folder Level Encryption (FLE) or Full Disk Encryption (FDE). FLE protects specific files and folders so it’s better suited for encrypting small amounts

of sensitive information. FDE, by contrast, encrypts the entire hard drive and is perfect for protecting, for instance, corporate laptops in the event of them being lost or stolen. Since FLE and FDE solve different problems, most organisations prefer to use both technologies. According to the IDC specialists, there are four main reasons to implement encryption technologies: • To limit access to confidential information and to protect against unauthorised access; • To protect sensitive files against malware and other increasingly prevalent cyber-threats; • To help secure data against attacks that successfully penetrate the corporate network - attacks on corporate infrastructure and attempts at data theft

are becoming ever more sophisticated; • To complement a company’s risk management process; data protection plays an increasingly important role as a key element here. IDC reports that the market for workstation encryption will grow by more than 50% in the next few years - from USD 556 million in 2012 to USD 866 million in 2016. In 2013, the cost of data protection will exceed USD two billion for the first time while in 2016 it will reach more than USD three billion. To prevent unauthorised access to confidential information, the new corporate platform, Kaspersky Endpoint Security for Business, offers both FDE and FLE encryption technologies. The solution incorporates

several other valuable features, including centralised management functions for encryption technologies via Kaspersky Security Centre, the ability to set up general rules to encrypt data on external media, and the automatic encryption of files created or modified by any program specified by the company’s IT staff. It is important to reduce the complexity in the IT environment, and Kaspersky Endpoint Security for Business allows companies to eliminate several different tools, vendors and applications by consolidating their needs into a single platform. To help reduce complexity, the encryption function is combined with a wide range of other Kaspersky Lab technologies in this new platform. It protects against malware, spam, targeted threats and other cyber threats, creating a truly safe environment to handle confidential information on all nodes of the company’s infrastructure.

“We thought we’d need Dell’s help, but after the demonstration we saw how simple EqualLogic is to use and we set up our storage environment within days.” Mohamed Raafat Atia Technical Services Manager Digital Solutions Provider

Do more with Dell networking and storage Solutions See how Dell helped Saudi services and consulting company, DSP, build a highly-scalable, reduced server-footprint environment. Enabling support surveillance solutions for three of Saudi Arabia’s largest hotels using Dell PowerEdge servers and EqualLogic storage. Read the full case study at YourDellSolution.com/me/servers

©2012 Dell Products. Dell, the Dell logo, EqualLogic and PowerEdge are registered or unregistered trade marks of Dell Inc. in the United States and other countries. Intel, the Intel logo, Xeon, and Xeon Inside are trademarks or registered trademarks of Intel Corporation in the U.S. and/or other countries. Other trademarks or trade names may be used in this document to refer to third-party products (such as operating systems and software) included with the products offered by Dell and the entities claiming the marks and names of those products. Dell disclaims proprietary interest in the marks and names of others. Dell Corporation Ltd, Dell House, The Boulevard, Cain Road, Bracknell, Berkshire, RG12 1LF.

TECHNOLOGY FOR BUSINESS

Embracing the ‘new media’ mentality London Business School’s experts discuss the increase in Arabic content online and pressure on print media.

During the event

xperts at London Business School’s Technology Media and Telecoms Insights Forum suggested that the UAE’s key media and technology players are embracing a new media mentality amidst growth in online penetration and anticipated pressures on traditional print media. They

discussed opportunities for growth in the regional mobile internet space, and the increasing need for locallyproduced, Arabic language content. “The media industry is growing faster than the economy in the region, and online is growing faster than the rest,” said Jean Marc

Top SME package from Etisalat SMEs can now benefit from a range of new services to boost their business communication needs. On May 6, Etisalat announced its accelerated focus towards the SME sector in the UAE, reaffirming its commitment to continue offering superior propositions for this segment providing empowerment, flexibility and competitiveness to SME businesses. The new “Business Ultimate” mobile plans are customised for specific SME business needs. There are four bundled packages offered at AED 99, AED 199,

Paufique, Chief Operations Officer at Zawya, a business and news portal. “Countries like the UAE have 200 per cent mobile penetration, and an overall healthy penetration of online media. But, whilst print media still represents 40 per cent of the whole spend, there are some challenges we need to prepare for since most newspapers are still struggling to find the right model to monetise news online. Although difficult, monetising news can be achieved by using hybrid Feemium models with the right mix of free content for mass audiences’ monetised through advertising and premium content for narrow targeted audiences willing to pay a subscription.” Amira Rashad, Chief of Staff and Head of Media and Research at Yahoo! Middle East and Africa, explains that the potential for growth of Arabic language online is enormous. “Our mandate at Yahoo! Maktoob is to provide local content, and

AED 399 and AED 999. All the bundles comprise of local and international calls, SMSs, local data and smartphones at zero upfront costs. The latest Samsung Galaxy S4 LTE, BlackBerry Q10 and iPhone 5 are offered exclusively with this plan for the first month. The basic business ultimate package for AED 99 comprises 130 minutes of local and international calls each, 130 SMSs and 130MB of local data. International calling add-ons are at rates are as low as 50 fils per minute on per second billing basis. Users can also benefit from per second billing on both local and international calls in the package. Customers can also choose from multiple add-on options based on their usage patterns. For example, AED 60 (1GB), AED 149 (5GB) and AED 219 (12GB). These add-ons are essential today especially where mobile data

that means Arabic,” Amira explains. “We have in-house teams who produce original content in Arabic as well as curating regional news feeds. Another trend is how mobile is becoming part of a much bigger landscape which is the multi-screen environment.” “There is now, more than ever, an interplay between the various screens. For instance, I’m watching Arab Idol on television and then tweeting about it from my mobile. Mobile is used in synergy with other screens, and companies who know mobile content are on to a winning streak.” The print media industry, however, remains buoyant for the time being, with government-backed investment fostering a thriving media sector through companies such as the Abu Dhabi Media Company. Experts on the panel discussed the increasing need to differentiate through local content, and the increasingly personalised experiences that users enjoy.

volumes are becoming an integral part of business needs. John Lincoln, Senior Vice President, Business Marketing, Etisalat said: “SMEs currently represent a significant part of the business community in the UAE. The top priorities for SME customers is to lower capital expenses, economise international calling and also avail latest devices to increase productivity. Etisalat has always strived to provide best-inclass solutions offering value to their business at the same time meeting their dynamic demands and requirements.” Today SMEs represent more than 90% of UAE businesses playing an essential role in building a private sector, and contributing significantly to employment and economic activity in the UAE. According to the Ministry of Economy, the sector contributes an estimated 60% of the UAE’s GDP.

THE NEXT LEVEL

When convenience (and the customer!) is king For most companies that are only nine months old, survival is the name of the game; but for RoundMenu, the journey to ‘the next level’ is already complete - securing cashflow and stability with an inspirational online booking concept that’s already seated more than 60,000 diners in 400 restaurants. Not to mention creating an app that’s so userfriendly that it’s a bullet-like No.1 in the iTunes app store. To find out more, we spoke to company Founder, Zaid Jawad and Managing Partner, Ali Sinaei.

irst things first. No matter how good your core concept, it needs to be underpinned with a raft of solid commercial experience; and preferably, related commercial experience at that. So it’s no wonder that RoundMenu Founder Zaid Jawad was previously Co-Founder of Zawya.com (a GCC top-five business website) and the firm’s CTO for ten years. Meanwhile, Ali Sinaei was Head of Advertising Sales at Bayt.com, focused on developing new revenue opportunities as well as growing existing income streams. Yet what was the ‘intuitive leap’ that transformed those skills into the region’s premier dining website? “The thing is”, says Zaid, “I discovered a gap in the market for the restaurant lifestyle. I thought it was hard to book a restaurant here - after all, how many times do you struggle even to find a map of the location, let alone a phone number? Plus, many of them have promotions going on, but you simply don’t know about those when you’re deciding where to eat. So, I set about creating a booking engine, always encouraged by the fact that Dubai is very much a dining culture. People here tend to eat out all the time, not just because of a special occasion. Also, I noticed that diners were very influenced by word of mouth, so this led me to think that it would be great to feature user reviews on the website.” Ali Sinaei adds that: “The idea was to find a convenient way of finding the restaurant, making the reservation and benefiting from the promotion - and doing all this in a way that fits in with your evening. Maybe you’re not sitting at your desktop, but instead you’re out on a date, or with a group of friends. How are you

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THE NEXT LEVEL our diners more than AED 2.5 million by directing them towards special offers and promotions.” Top choices So what are the favourite cuisines in the UAE? The statistics tell an interesting story. “First”, says Zaid, “is Indian, followed by the classic ‘steak house’ concept. Then in descending order, you have Arabic, Italian and Chinese.” Ali adds: “Then, allied with the favourite cuisines, you have favourite locations. There’s no doubt that the No.1 location is the Downtown area, followed by JBR and then the Marina. Typically, our service isn’t used so much for restaurants in malls, where the decision tends to be more spontaneous, as soon as something catches the eye. Having said that, some of the restaurants in Downtown in locations like Souk Al Bahar and the South Promenade of Dubai Mall (that’s the side facing the Dancing Fountain and Burj Khalifa) are our top-performers.

Founder, Zaid Jawad and Managing Partner, Ali Sinaei

going to decide where to go right at that moment and make a choice that you’re all going to enjoy? That was our challenge. So it’s no surprise that slightly over half of all our bookings come from mobile apps. Interestingly, until only a few weeks ago it was a 60/40 split in favour of desktops, but now our apps - which are available for iPhone, Android and Blackberry - have the edge.”

might think: the average is five people per booking. Even on Valentine’s Day – when you would think that it was all about romantic couples - more than 40 per cent of our bookings were for groups! Perhaps that reflects the focus on community and family in this part of the world.” Was Valentine’s Day good business? “Oh yes” replies Zaid, “it was our best day yet, with five times more bookings than our average day.”

Data, data and more data Apart from the sheer volume of the user take-up for RoundMenu, the most impressive feature is the extraordinary wealth of data collection. “For example”, says Zaid, “we can tell you that 40 per cent of our bookings are repeat business, and 60 per cent are first-time users. But that’s to be expected, given that we’re only nine months old. Yet other data is perhaps more surprising. For example, group bookings are a good deal more popular than you

Customer profiles What’s the profile of the typical RoundMenu customer and what does he or she spend? Ali explains that “the average age is 30-34, with an average spend of about AED150 per head. Customers are very adventurous here, too - much more than in other parts of the world. For example, they might try three or four radically different cuisines in a single month! I can also tell you that over the last nine months, we’ve been able to save

Adding value Given that RoundMenu isn’t the only restaurant booking site in the UAE, how would Zaid and Ali describe their real USP - the secret of the site’s spiraling popularity? “There’s no doubt that, for the customer, our USP is convenience; and for the restaurant, it’s the repeat visit. In fact, in terms of this last point, we have the ability to offer a complete customer management tool for restaurants, so they can optimise their customer offer and focus on maximising their margins. We’re just beginning to offer this style of more sophisticated service, but the fact is, we’re only nine months old and our offer is still currently a work in progress. We’re very pleased, though, by the very warm response we’ve received from restaurants when we ask them to sign up to the site.” Ali continues: “There are also various enhancements that we have in mind for the site, especially in terms of adding value to the way the décor and ambience of the restaurants are presented. We know this figures in people’s choices, because we can actually track the way that decisions are influenced as people navigate through the site and its offers.” So what’s next? Zaid remarks that “the next step is geographical expansion but that, as they say, is another story”. Or perhaps we could say the gateway to the next level?

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ADCB ENTERPRISE CREDIT As your business grows, you need to keep pace with the increasing financial demands involved in making it a success. ADCB Enterprise Credit is a flexible business banking product created to take care of your working capital and short-term funding needs. Key features: • Working capital facilities available to SMEs having annual sales turnover up to AED 150 million • Credit facility up to AED 30 million • Easy documentation and quick approval • Flexible collateral requirements, with residential/commercial properties, SBLC, cash/cash equivalent accepted as collateral • Shari’ah compliant products also available For more information on ADCB Enterprise Credit, please SMS ECREDIT to 2626 or call 800 763 800

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