Tapping Into Opportunity: How Businesses In Dubai Are Accessing New Markets And Verticals Through COVID-19 When the COVID-19 pandemic disrupted the global trade landscape, Dubai Chamber and its 245,000 members have had to adapt to a new reality that requires them to explore those new opportunities in a digital format.
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One of the key aspects of the support provided by the Dubai Chamber of Commerce and Industry to businesses in the Emirate is in enabling their access to new trade and business opportunities not just in the UAE, but around the world. But when the COVID-19 pandemic disrupted the global trade landscape, the Chamber and its 245,000 members have had to adapt to a new reality that requires them to explore those new opportunities in a digital format.
"In recent months, Dubai Chamber's international offices organized a series of webinars and virtual meetings which were joined by UAE businessmen and counterparts in Eurasia, Africa and Latin America," says Omar Khan, Director, International Offices, Dubai Chamber of Commerce and Industry. "These events provided an ideal platform for our members to explore attractive trade and investment prospects abroad, while we also used the opportunity to promote Dubai as a global business hub. We are very encouraged to see strong high-level participation, which reflects growing confidence in Dubai among foreign investors, and we expect to see more interest in the coming months as more companies prepare for the post COVID-19 recovery."
Of the several virtual events that Dubai Chamber has hosted so far, recent ones include an online trade mission to the China Import and Export Fair (also known as the Canton Fair), a discussion on food trade between Russia and Dubai, and an exploration of opportunities in Mozambique's oil and gas sector- all of which have been attended by businesses eager to tap into new markets. "Businesses in Dubai can leverage Dubai Chamber's network of international offices by accessing valuable market intelligence to make informed business decisions, networking with potential business partners and benefiting from local support as they expand their footprint in new markets," Khan says. "At the same time, we are assisting high-potential companies around the world with their entry into the Dubai market and use the Emirate as a strategic hub to boost their reach in this part of the world."
Omar Khan, Director, International Offices, Dubai Chamber of Commerce and Industry
One of the companies that have taken advantage of Dubai Chamber's initiatives in helping Dubai-based businesses reach out to promising markets is Tradeling. Launched in February this year, Tradeling is a digital marketplace that showcases products of close to 300 suppliers from more than 25 countries. Muhammad Chbib, CEO of Tradeling, explains that the company's business model -a B2B digital marketplace that connects regional and global suppliers to meet business demand locally- requires the enterprise to align its expansion plans with how the business environment evolves. For instance, when Tradeling saw its original verticals (food and beverages and office supplies) get a hit due to the COVID-19 crisis, the e-commerce startup adapted to the situation and quickly developed a vertical that wasn't part of its launch phase: health and wellness.
Agile tactics like this are integral for businesses that want to get through this crisis, Chbib notes. "Companies abroad as well as here are trying to survive," he explains. "Learning from the experience of launching right in the thick of a crisis, we have only emerged stronger, and with a laser-sharp focus on how we can adapt to changing circumstances. For many businesses today, it is a combination of reducing costs, unfortunately, mostly by laying off people, and trying to generate cash wherever possible, such as by leveraging existing infrastructure to expand the business into other regions or product verticals." In Tradeling's case, Chbib says the company's original plan to expand into Saudi Arabia in the fourth quarter of 2020 is well on track despite the crisis. "We are an agile and flexible organization, as we have proved through our success in the UAE, and we are working towards our planned expansions. Of course, a physical, face-to-face supported launch during a trade show would have been ideal as a launch-pad, but if the current COVID-19 situation requires something else, we will adjust accordingly."
Key to this, Chbib adds, is for business owners not to be rigid when assessing new verticals or markets. "In expanding to any new market, especially in the post COVID-19 world, we look at the market opportunities by evaluating long-term indicators, such as trade volumes per industry, import country partner rankings, export countries, number of SMEs per segment, amount of trade transactions in a specific field, and GDP growth per sector, among others," he notes. "These indicators give you a theoretical perspective about whether it makes sense to enter a specific geography, and what industry verticals to consider. We then look at how efficient the industry is at the moment. We evaluate whether we add value to the market players if we offered our services in any geography. This means, creating tools to search, find, interact and ultimately trade directly between international/regional suppliers and buying businesses in a country."
Muhammad Chbib, CEO, Tradeling. Image courtesy Tradeling
Next on Tradeling's agenda is expanding into Latin America, and Chbib says Dubai Chamber's initiatives that promote bilateral trade with countries from the region have proved useful for their plans in this regard. In fact, he notes that the Dubai Airport Freezone Authority (DAFZA) is actively diversifying Arab-Brazilian trade, and Tradeling is thus seeing a promising opportunity to expand its presence to Brazil and other LATAM countries. "All our partners appreciate our continued push to grow and support the trade ecosystem," Chbib says. "We just had workshops with Latin American companies in partnership with the Dubai Chamber, and the interest in working with us was huge. People all around the globe see the MENA region and the UAE specifically as a great opportunity to grow, and they appreciate Tradeling as a means to simplify and streamline access to our region. So, there is no one-size-fits-all formula that guides our geographic expansion. It is really a close evaluation of the market, and also our own intuitive understanding of the business dynamics, which we have gained over several years of hands-on experience."
Quick reactions and adjustments to changing market circumstances have also marked day-to-day operations at mrUsta, an online marketplace for home services. CEO Ibrahim Colak notes that the COVID-19 crisis has had a negative effect on his company- since Mr Usta's services are delivered inside houses in the UAE, customers weren't keen on having strangers visit their homes unless they were confident that the requisite precautionary measures were being taken. "Working with our service providers on improving the safety of their staff and the customers they visit, as well as communicating the details of this plan to our customers in a transparent way, has increased the customer trust, helping us to grow our business back after a slowdown," Colak says.
But despite these challenges, Mr Usta also found opportunities to tap into amid the crisis- the company created a whole new vertical for the business: a disinfection and sanitization service for houses and cars. "We looked at the current service needs of the customers, and we found out that they wanted to have peace of mind in terms of disinfection and sanitization of their homes and cars," Colak says. "We also had an increase on house deep cleaning and AC deep cleaning jobs. We had seen a high demand in March, April, and May, and focused on that and improved the service quality and resources for these new categories. So, instead of focusing on our normal popular categories, we focused on the categories that have seen an increased demand in this period."
Ibrahim Colak, CEO, Mr Usta. Image courtesy Mr Usta.
In June, Mr Usta also announced its strategic partnership with UAE retail giant Majid Al Futtaim (MAF), which allows customers to benefit from a plethora of the startup's aftersales and home services when they purchase products from MAF brands like Carrefour, Crate & Barrel, and Maison du Monde. The partnership, which will see Mr Usta's technology integrated with MAF's own web and mobile platforms and its loyalty program, Share, will also help the Dubai startup growth tap into a larger audience network. "For the last two years, our strategy to acquire new customers has been based on reaching them via our partners' network," Colak says. "We have closed very important partnership deals during this period, and we are planning to grow our customer base and sell more service via our new partners' network online. The high demand for buying services and products online during this period is also helping us as well. Therefore, our projects for the second half of the year will be about improving our service quality in the most demanded categories, and retaining our existing customers with great customer service."
When asked about the kind of help and resources businesses may need to push through this challenging period, Colak points out that support needs to be two-fold: decreasing business costs, and helping them find new customers. "Office rent and employee salaries are the highest expenses that businesses have right now, and therefore, suspending rental contracts for at least six months would really help them to keep their operations going on," he says. "I believe it is very important to keep talent and hardworking employees in the companies, and in the country. Because if the employees have some sort of income, instead of no income at all, this will keep companies operational, and these people will still be spending that income buying products or services for their needs. Having more people purchasing products and services will keep the economy and companies alive, allowing these companies to start hiring more people again.Thus, instead of letting people leave, I believe that supporting companies to pay at least some part of their employees' salaries would be a good solution in this transition period."
From his perspective, Tradeling's Chbib points out that the COVID-19 crisis has highlighted that "the capital side of the entrepreneurial space in MENA is still in its infancy." He explains, "Some investors have continued to support their investments through the crisis, simply because they have done a great job of sourcing these investments- they have invested in strong models with good teams. Others have failed to support their businesses and downsized tremendously. They might as well close them. My advice to decision-makers in UAE is to continue supporting the ecosystem through more liquidity, to ensure the ecosystem can navigate through the current crisis, by focusing on creating robust opportunities for growth."