Page 54 - RLI November 2019

RLI RETAIL INSIGHT

Tips and Tricks

In this article Sara Holder, Managing Partner – Middle
East and Africa for Rouse, takes a look at some of
the key considerations for brands seeking retail
opportunities in the Gulf region.

ew retail opportunities remain abundant for brands in • Register your trademarks/brands: registration is preferable
the Gulf region. “Mega-malls” continue to be developed, for a number of reasons:
functioning as integrated social and entertainment o Unregistered trademarks are difficult to enforce against
Ncentres with considerable attractions – skiing, ice- infringers/counterfeiters.
skating, movie theatres, cafes and restaurants – all side-by-side with o Showing a registration certificate may be mandatory to
retail offerings. According to Dubai Festivals and Retail Establishment obtain advertising and signage approvals (e.g. for a store front).
(DFRE), retail space is set to expand by 1.5 million square metres in o Arabic versions of brands will be required even if registration is not.
2019-2021 in Dubai alone. AT Kearney’s Global Retail Development
Index 2017 - which ranks the top 30 countries for retail investment • Understand the legal arrangements you are entering to
opportunities - shows the United Arab Emirates ranked at number operate retail outlets:
5 and Saudi Arabia ranked at number 11. o The vast majority of brands operate through an agency,
Notwithstanding these opportunities, there are some issues franchise or distributorship arrangement. Agency relationships, in
that brands need to navigate to ensure successful entry and particular, can be the most powerful but also the most restrictive
ongoing longevity in a market. in the event of a dispute. Agency laws do differ from country
1. Know the market: This is, of course, a very obvious to country in the GCC, but certain legal rights are extended to
statement. However, this is beyond understanding the agents which can, in some circumstance, restrict the right of a
demographics and opportunity the region presents. The Middle brand to appoint new agent/distributor in the event of a dispute.
East market is not homogenous and tailoring a market entry o Requests for registered user agreements – a right that is
and on-going strategy to each territory is essential. recorded at the local Trade Mark Registry against a trademark
registration – are still common from local authorities in order
2. Bricks and mortar retail increasingly co-exists with to approve advertising and signage uses by agents/distributors/
online: Online retail participation is increasing. Amazon has franchisees. These can be very difficult to remove from the register
increased its presence through its well-publicised acquisition of Souq. in the event of a dispute and may reduce brand development
com. Other home-grown e-tailers abound. Many luxury online opportunities, also reducing choice for consumers.
retailers such as Net-A-Porter will deliver to the region and offer o Multi-brand retailers (e.g. a department store) will need
sites in Arabic language. Locally-focused equivalents have sprung to understand if any of the brands they stock are otherwise
up, often championing regional designers and modest dressing. independently represented by an agent in a particular jurisdiction.
Notwithstanding this, bricks and mortar retail remains very important. This may impact sourcing of products.
3. Engagement with customers via social media o Establishment in a free zone does not necessarily allow
channels is high: Smartphone penetration is very high and operation ‘on-shore’. A distributor/agent may still be required.
it is very common for people to have more than one device. • Products may need adjustment and approval:
An estimated more than 99 per cent of UAE residents use
social media daily. Local and regional influencers are on the rise o Halal certification may be required, porcine-derived
and increasingly important to brand engagement as the region ingredients may need to be removed/replaced, and so may
forges ahead with expressing the strength of its own cultural alcohol based components.
identity as opposed to importing western trends. • Advertising standards and Social Media rules are not the same:
A few simple legal and brand management steps can assist o The jurisdictions of the GCC are more conservative than the
with navigating the above. West, although there is a great deal of variation. Advertising campaigns
and social media messaging that may be acceptable in the West may
need adjustment on a market-by-market basis. One size does not fit
all, even across a small group of countries such as the GCC countries.
o There are new rules regarding the licensing and activities of
influencers in the United Arab Emirates, in particular.
o Cultural values do differ and local influencers may portray
views that seem out-of-step with a western brand’s values, but be
considered acceptable in the region. Make sure expectations are clear.
o Brands may be, in certain circumstances, liable for user-
generated content on social media platforms.
o Promotions/competitions can be strictly regulated.
Brands that simply try and import a strategy from their home
market are unlikely to succeed. Consumers in the region are
sophisticated. With advanced planning to understand the nature of the
market opportunity, active relationship management with partners,
and bearing in mind the above points, there is no reason that new
brand entrants cannot succeed in GCC’s exciting retail market.

54 RETAIL & LEISURE INTERNATIONAL NOVEMBER 2019