Page 69 - Aamir Rehman - Dubai & Co Global Strategies for Doing Business in the Gulf States-McGraw-Hill (2007)

Think Again: Addressing Misconceptions about the GCC 53

The posting shown asks: “Who can send me some things from
France? Whoever can send me items from France, please e-mail me
privately. In Al Khobar [a large eastern Saudi Arabian city] I also
want LV [Louis Vuitton] and her sisters [a slang term for other lux-
ury brands such as Chanel, Dior, etc.].”
Examples like this should cause global marketing managers,
who may have assumed that there was insufficient demand in the
GCC for their products, to start wondering how many of the items
purchased online and shipped to US or European addresses, or pur-
chased by foreign visitors to the United States or Europe, ultimately
end up in the GCC. In addition, the words of GCC consumers them-
selves demonstrate keen awareness of—and desire for—Western
products, turning the “they hate us” misconception on its head.
Another, deeper question is: How much revenue are multinationals
losing from customers who lack the extra motivation to use Aramex
or Hawaa World to arrange their purchases?

POLITICAL CRISES AND BRAND RISK

While the dominant reality is that GCC consumers embrace global
brands when they suit their needs, political crises can—and do—
lead to boycotts that have a negative economic impact on exporters
to the region. The most notable recent boycott was that of Danish
products in early 2006, following the publication of a cartoon
depicting the Prophet Muhammad that was deemed offensive by
Muslims around the world. The boycott strongly affected the sales
of individual Danish companies and Danish exports in the Muslim
world.
Consider the following figures:
● Denmark’s exports to Saudi Arabia—its largest Muslim
market—fell 40 percent during the cartoon-related
boycott. 15
● Arla Foods, a Danish dairy cooperative with over $400
million in Middle East sales each year, suspended
production in Saudi Arabia because the boycott against its
products was nearly total. 16
● Denmark’s worldwide exports fell 15.5 percent between
February and June 2006 as a result of the boycott. 17