MESSAGE to BRAND OWNERS-Why Do FMCG Brands Fail in the UAE Market? #fmcg#fmcguae#fmcgpost#fmcgjobs#fmcgbrands#fmcgcareers#fmcgbrands#brands#posts

MESSAGE to BRAND OWNERS – Avoid hiring a Product or Business Development Manager solely based on their ability to speak your language.

Why Do FMCG Brands Fail in the UAE Market?

Do brand owners truly understand the pulse of the UAE FMCG market before launching their products? What solutions can prevent potential pitfalls?

Brand owners' understanding of the UAE FMCG market before launching their products varies greatly. While some conduct thorough research and preparation, others may fall short. To prevent shortcomings and improve their market understanding, brand owners can implement various strategies and solutions tailored to their brand vision and objectives. It’s important to note that a strategy successful for one brand or distribution company may not necessarily yield the same results for another.

Solutions to Avoid Shortfalls

Thumb Rule for Brand Owners

If you are serious about launching your brand in the UAE market, make sure to register your brand name in the UAE. This process costs around AED 10,000 to complete all the formalities. Additionally, secure a domain name with a ".ae" extension.

Conduct Comprehensive Market Research:

Consumer Surveys and Focus Groups

Engage with potential consumers to gather insights into their preferences, needs, and pain points. These surveys typically focus on identifying consumer behavior, buying patterns, and sampling feedback to understand the pulse of the buyer. However, it's often overlooked that delivering the product to the consumer requires a different skill set. Conversely, individuals with an FMCG background might focus solely on product reach and availability, neglecting the consumer behavior aspect.

Data Analytics

Utilizing data analytics is recommended for understanding purchasing patterns, market trends, and consumer behavior. However, this approach may become ambiguous due to the limited availability of data records for analysis. It's important to note that the presence of a brand in one Group of Modern Trade Key account does not guarantee its presence in another. Similarly, a product performing well in one Emirate may not be successful in another. Additionally, a product thriving in the traditional market may not necessarily have a presence in the Modern Trade Key account.

Market Segmentation

Identify and analyze various segments within the UAE market, taking into account demographics, lifestyle, and spending habits. This step is crucial as it requires a deep understanding of the brand, target consumers, pricing compared to competitors, and most importantly, brainstorming to determine why a consumer would choose your brand. It's highly improbable that a category does not exist in the UAE market, particularly where competitors operate within the same category.

Engage in Cultural Immersion:

Cultural Training: Offer training for teams on local culture, customs, and traditions to ensure cultural sensitivity in marketing and product offerings. Notably, over 90% of traditional market supermarkets are owned by South Indian Keralites, so their staff, whether in receiving, merchandising, ordering, or accounting, are predominantly of Asian origin. Additionally, more than 60% of the UAE's resident population is from South Asia, including countries like India, Pakistan, Nepal, Sri Lanka, and Bangladesh.

Local Partnerships: Collaborate with local businesses and influencers who have a deep understanding of the market nuances. Brands should identify their target consumers and their nationalities, then decide whether to appoint a common distributor for all channels or separate distributors for Modern Trade, Traditional Trade, and HORECA. Additionally, further classification may be necessary if the product caters to specific segments like cafeterias. For convenience stores, particularly those at petrol stations such as ADNOC Oasis, Fresh Plus, and Zoom, specific distribution strategies should be considered. If a brand aims to establish a dominant online presence, it is advisable to either build their own network or partner with companies that specialize in online E-Commerce and Q-Commerce platforms.

Regulatory Compliance and Standards:

Hire Local Experts: Employ or consult with FMCG Experts and regulatory experts to ensure all products meet UAE standards and regulations. Label approval and compliance are crucial as the UAE imports FMCG products from around the world, and these brands often follow their own country’s norms, which may not align with UAE regulations. Labels must be in both English and Arabic, adhering to the following points:

1.????? The product type must be in both English and Arabic. For example, if the product is a biscuit, "biscuit" must be mentioned in Arabic as well (this applies to the product name, not the brand name).

2.????? Manufacturing and expiry dates must be in Arabic.

3.????? Ingredients must be listed in Arabic.

4.????? The country of origin (COO) must be stated in Arabic.

Additionally, verify the product shelf life for your specific category, as some products may have a shorter shelf life in the UAE compared to their country of origin.

Regular Audits: Conduct regular compliance audits and either obtain quality certificates in your country of origin or locally if you have production in the UAE. Stay updated with any regulatory changes. When dealing with meat and poultry products, ensure stocks carry certificates from approved butcheries of each country. Lists of approved butcheries can be obtained from the Dubai Municipality (DM) or requested via PM.

Localization of Products and Marketing:

Adapt Products: Modify product formulations, packaging, and sizes to align with local preferences and regulatory requirements.

Tailored Marketing Campaigns: Create marketing campaigns that resonate with the local audience by using appropriate language, symbols, and messages. While many brand owners are willing to invest in marketing to build their brand, spending on billboards and signboards may not be advisable in the initial phase. Instead, focusing on digital marketing is a safer bet. When hiring digital marketing professionals, ensure they have experience in the FMCG industry or have worked in sales within the UAE FMCG sector. This experience can lead to more productive and effective digital marketing campaigns.

Innovative and Trend-Responsive Approach:

Trend Analysis: Continuously monitor both global and local trends, such as health and wellness, sustainability, and technology adoption.

Agility in Innovation: Be prepared to innovate and quickly adapt products in response to emerging trends and consumer demands. To achieve this, partner with a reliable distributor whose extensive field team (feet on the street) can provide valuable insights. Ensure a robust feedback collection process is in place, as most distribution companies in the UAE handle multiple brands and may find it challenging to dedicate time to any one brand due to their extensive portfolios.

Strengthen Distribution and Retail Networks:

Logistics Optimization: Ensure efficient supply chain management to maintain product availability and freshness.

Retail Partnerships: Build strong relationships with key retail chains, e-commerce platforms, and traditional markets to ensure wide product availability. Brands must be cautious to avoid stockouts or selling near-expiry products to liquidate inventory, as this can damage brand reputation.

From my experience, several brands that initially struggled only gained momentum through near-expiry sales, eventually stabilizing at normal pricing. It's crucial to calculate lead times accurately, including production, packaging, and transit times, while accounting for contingencies.

For certain products like flour and dry mixes, shipping can take over 30 days, and these items may not be stored for more than 30 days, even with a longer shelf life, due to quality concerns.

Additionally, unlike many countries where 30-40 outlets can be covered daily, the UAE often requires a more focused approach. Planning deliveries to Modern Trade key accounts may result in as few as three deliveries per day due to logistical constraints.

Competitor Analysis:

Benchmarking: Analyze competitors’ products, pricing, marketing strategies, and market share to identify opportunities and threats. Ensure that promotions and marketing strategies are planned before launching a product. Set clear, evolving objectives with timelines to evaluate progress and keep the team on track.

Unique Selling Proposition (USP): Develop a strong USP to differentiate the brand from competitors. It's highly likely that any product or brand you plan to launch already exists in the UAE FMCG market. Rarely will you find a monopoly product. Therefore, plan with the understanding that competitors already exist. Rather than aiming to capture the entire market initially, focus on strategies that assume competition is present and build your roadmap accordingly.

Utilize Technology and Digital Platforms: E-commerce Integration: Leverage online sales channels to reach a broader audience and provide convenience to consumers. With e-commerce and quick commerce (Q-com) gaining popularity, consider these platforms to establish your brand. Ensure you thoroughly research your product and category online.

Digital Marketing: Use social media, influencers, and targeted digital advertising to engage with tech-savvy consumers. Digital marketing offers a better ROI compared to traditional methods. However, brands should hire digital marketers with firsthand FMCG experience rather than those who simply design posters and banners for social media.

Feedback Mechanisms and Continuous Improvement:

Consumer Feedback Loops: Create channels for consumers to provide feedback and reviews.

Iterative Improvements: Use feedback to make continuous improvements to products and services.

Hire Local Talent: Hiring local talent is a crucial factor in determining a product's success. In my experience, many brand owners choose brand managers or business development managers based on criteria such as the ability to speak the owner's native language, which helps bridge communication gaps. Many brand owners may not be fluent in English, the most widely spoken language in the UAE, followed by Arabic and Malayalam. For instance, if your product targets the traditional market, and you hire a brand manager who communicates well with you, your market visits and dependency might rely solely on this manager. They communicate with storekeepers, shelf boys, or merchandisers, translating and deciding what needs to be conveyed.

The irony is that these interactions often involve individuals whose mother tongue is different, and communication is managed in English. Stop hiring people merely because you are comfortable communicating with them.

Local Expertise: Employ local professionals who understand the market intricacies and can provide valuable insights and connections based on your product, the nationalities you are targeting and the clientele that you are going to deal with.

Cross-Cultural Teams: Foster diverse teams that can bring different perspectives and enhance market understanding.

By implementing these solutions, brand owners can better understand the UAE FMCG market and address any potential shortcomings before launching their products. This holistic approach ensures they are well-prepared to meet the unique demands of the UAE consumers and achieve market success.

By Nair Santosh- Every dip of Knowledge makes us better (BREND BRAND| SALE DIPS #brendbrand #salesdips) UAE FMCG HEAD & SPECIALIST – SALES, MARKETING & BUSINESS DEVELOPMENT, FMCG SPECIALIST, BUSINESS DEVELOPMENT

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