Nicole Green finds out why relationships are so important when trading with one of Britain’s leading export markets
EVEN for ambitious businesses, breaking into the United Arab Emirates (UAE) may seem like a challenging prospect. It’s a complex economy, with its own cultural quirks and peculiarities. But it’s also one of the UK’s leading export markets, and is widely perceived to be a gateway to other economies in Asia, Africa and the Middle East. With the right partnerships, a long-term plan and patience, the business opportunities for British firms are plentiful.
This was the key lesson offered at an exclusive event on exporting to the UAE, held in Cardiff last week as part of Santander’s Breakthrough Box Live festival.
Experts from advisory business Stonehaven International, M Partners, PwC and Santander were on hand to offer advice and insight to ambitious firms looking to break into what was described as a “difficult” market.
Difficult it may be, but experts were keen to highlight the huge potential for UK firms to export to a cash-rich region that is looking to move its economy away from a reliance on oil and gas.
Thomas Denny, vice president at Stonehaven, said: “The active government policy focused on diversification has already affected the business landscape. The question is not about whether the projects and potential business is there, rather how do you access it at the right level?”
Gronw Percy, assistant director in corporate finance at PwC, echoed this sentiment: “It is a region that is changing rapidly, and is being re-emphasised as a key trading area. There is a lot of money, but that doesn’t always translate to profitability – you have to get it right.”
So how can a business “get it right”, and what are the key considerations when navigating a complex region such as the UAE?
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Denny says that most success in the region is based on building strong relationships on the ground. Most Gulf countries are relationship-based socially and economically, and the trust that the authorities will assign to an international company will, to a large extent, be based around who that company is partnered with.
“Wherever you go in the region, you will hear everyone saying you need a local partner. The reality is that the only way of selecting a partner is through recommendations and trust.”
According to the experts, breaking down cultural barriers and understanding the nuances of how business is done in the UAE is one of the main challenges faced by companies exporting there. But they insisted that the right partnerships on the ground can open doors.
Percy continued: “You need to recognise the culture in the region – make sure you have some nationals sat alongside you who understand how to work the system.”
For Richard Cuda, director of strategic banking alliances at Santander, “it is all about building the relationships.” He said: “You might spend the first 45 minutes of a meeting talking about education and football, but in the last ten minutes it will switch to business and be very pragmatic.”
Percy also issued a word of warning. “You need to test the credibility of partners, who can often promise you the world,” he said. “Expect long and tough negotiations, but see it as time well spent. If you start with the wrong partner, it will take a very long time to unravel.”
Building inroads into such a complex region is not a quick process and an investment in time is needed to see results. “Earning trust has to be at the heart of your strategy,” said Percy. “Commitment is key. This is not a fly-in-fly-out market, it requires real investment in time. They’re not interested if they think you’re only there to serve the expats and want to see some payback to the economy.”
“You need patience when dealing with locals,” said Cuda. “It can take months to even book in a meeting.”
“Expect long discussions on price,” he continued. “Trading is part of the culture so be flexible and expect negotiations to take place over time.”
With its growing focus on diversifying the economy, Percy said local businesses are also expressing an interest in partnering with overseas firms to bring new models back to the UAE.
“They’re looking for mutual business interests and those partnerships will also help you build relationships on the ground,” he said.
For businesses that are willing to make an investment of time, to build strong relationships and meet the right partners, the pay-off from trading in the UAE could be impressive.
“If you gain the trust of a national, they are very loyal. Your reputation in one part of the Gulf will carry weight in other parts of the region,” Percy said. “People forget about the breadth of the family groups... but you need to show the commitment.”
Cuda echoed the sentiment: “You will find long-term business relationships working in the UAE. Once you’ve earned their trust, they will work with you forever.”