How to Target Women in KSA: Social Media Case Study by 77 Media
77 Media defines itself as a ‘digital marketing boutique’. Based in Jeddah, Saudi Arabi; it offers web, app and game development, video production, photography, motion graphics, as well as social media marketing. Their social case was presented by Maha Taher, the Head of Digital Marketing at 77 Media and a co-founder of its social marketing arm 77 Social within a year of joining the company. She graduated from Switzerland, worked in Germany, then moved back to Jeddah after accumulating eight years of experience in technology and business management.
Here are the main points of the presentation:
Many companies still don’t understand social media
“They’re turning into an annoying media. They’re spamming a lot of us with a lot of messages and they’re not interacting.” According to Maha, companies are missing the mark when it comes to social media, when its sole use is to communicate a 30% discount, or a ‘buy one get one free’ promotion. “I don’t care!” she exclaims, the key here is added value, “either you are entertaining me or you’re giving me information,” and brands seem to forgo the entertainment part more often than not.
How to target Saudi females: Build loyalty
The lack of a two way communication explained above is the reason why brands don’t know how to target Saudi females she goes on to explain. “You have to understand what we want for you to be able to communicate that.” Campaigns and offers don’t guarantee fan retention; users could easily dislike a brand's page and move to their competitors after the promotion expires. “The only reason i will stay on their social media platforms is if i actually like them... like a friend.”
What really works in Saudi Arabia: Influencers
Sounds simple, but there’s little trick to it. “If someone abroad does this, they might not understand how we think.” Maha proceeds to show images of 3 women that are popular on social media in Saudi Arabia. One of those three however seems to be popular for the wrong reasons, something which outsiders are unlikely to be aware of, and might use her influence to sabotage their image.
More so, the person managing your social media accounts has to know the language of the people. Words can have different meaning in different dialects; some words are unique to certain Arab countries. “You need a local to communicate with locals.”
The right people at the right time, and the perfect frequency
Women aren’t always the decision makers. Sometimes targeting men is necessary; sometimes it’s her son or daughter, etc. Know when to post, and more importantly, how often you do it. As a rule of thumb, posting once or twice a day during peak time is OK. It also depends on who you are targeting. You should also know that in Saudi, employees start work later than usual. It is not uncommon for them to show up at work at 10 or even 11 am, so time your posts accordingly.
Going behind the scenes
No clubs, no theaters, and no cinemas, means that for Saudi residents social media is a much bigger platform for entertainment. As such, “human experience is crucial.” They love seeing behind the scenes footage. Things you did before the photo-shoot and not just the end result.
Why is it traditionally difficult to crack Saudi Arabia: Riyadh vs Jeddah
This issue was brought up during Q&A. The gist of it is as follows: companies usually go after Saudi customers without taking into account the peculiarities of its different parts. For instance, people in Riyadh are more conservative but they also have more money and are willing to spend more, so you have to talk about the product experience when targeting them. Jeddah people on the other hand are more liberal and outgoing so they will go out and see the product for themselves. Taif is different too, so is Mecca, Dammam, and so on. “The personality of the brand has to adapt to the city you are targeting.”
How Mobile is Influencing Online Shopping in the Middle East and North Africa
On Device Research,, a mobile market research company, recently released a report on how mobile influences in-store shopping behavior for shoppers in the Middle East. The survey was conducted in September 2014 with a representative sample of 1500 mobile users in Egypt, Saudi Arabia and United Arab Emirates. In Egypt, 70% of the respondents were using feature phones. Egypt also has lower smartphone adoption rates, data speeds and income levels than the other two countries, but its smartphone users share similar behavior to those in Saudi Arabia and the UAE.
Brick-and-Mortar Shopping in KSA, UAE, and Egypt
The report describes Saudi Arabia and UAE “as places where shopping is a national sport.” In fact, some of the world’s largest shopping malls are found there. The Dubai Mall for instance, the world’s largest shopping mall at 1.12 million square meters and housing 1200 stores, attracted over 65 million shoppers in 2012—that’s more than visited New York that same year. Egypt in particular has been catching up to the other two countries. Traditionally associated with market stalls and small local shops, it has attracted lately big brands such as Marks & Spencer, Ikea, and Zara and houses shopping centers including the 882 thousand square foot Mall of Arabia.
Phones versus Tablets
40% of the respondents went online on their phone in the last 12 months. Cheaper handsets and data plans combined with growing network coverage are influencing mobile internet penetration, with almost 60% of respondents reporting that they started using mobile internet during the last 2 years.
Meanwhile, tablet ownership is on the rise. While all respondents said that they have an internet connected phone, a high ownership of tablets, particularly in Egypt, “was a real surprise!”
Seeking Assurance Is the Most Popular Shopping-Related Mobile Activity
Almost 90% of mobile internet users in Saudi Arabia and the UAE have used their phone in stores to check prices and product reviews or ask friends for advice. That rate drops to 60% in Egypt. This drop is due to the high rate of feature phones in the country. Among the smartphone users in Egypt, this figure rises to 86%, bringing it in line with the numbers in the other two countries.
According to the study, using the phone to ask friends or family for advice by sending them a photo of the product or calling them is the most popular shopping-related activity at 35%. In Egypt, only 20% of feature phone owners do this. Among the smartphone users, the figure increases to 43%, which is again in line with the figures from Saudi Arabia (36%) and UAE (44%).
Other activities include checking prices and reviews, as well as non-shopping related activities, like entertainment (57%), which is broken down into playing games (28%), taking photos (24%), and visiting social networks (22%). These numbers show people use mobile for entertainment purposes more than for direct shopping-related activities.
Mobile Prevents and Shifts Purchases
Using mobile for shopping-related activities has a significant impact on purchase decision: 90% of shoppers in Saudi Arabia, 88% in UAE, and 74% in Egypt have stopped a purchase as a result of using their phone to assess their shopping decision. 33% said they found a better price online, 18% found a better product and 16% followed a trusted friend’s opinion and stopped the purchase.
This has huge implications for retailers and advertisers. Price comparison and product reviews are right in the consumers’ pockets, which makes it impossible for brands to hide product flaws or price unfairly. On the other hand, this presents new opportunities for advertisers who can reach out to people in real time while they are in the store.
Where Can Brands Reach Shoppers on Mobile?
Non-shopping activities done while in shopping centers present a great opportunity for retailers. Nearly one-third of respondents plays a game while in store. This means that advertising in the right games could be a winning formula using various technologies such as like beacons, geo-fencing and real-time bidding platforms. The report recommends App Annie for such purposes. It provides app ranking data and high quality mobile analytics, and “tracks the movers and shakers (and money makers) in the app ecosystem” according to the report.
Chat apps are exceptionally popular on mobile. One obvious hindrance is that most chat apps do not offer traditional advertising solutions. This doesn’t mean that brands shouldn’t use them to engage fans and offer deals and discounts. The most popular apps are WhatsApp and Facebook Messenger, followed by Skype and Viber.
“Anyone playing games, using social networks, reading news or watching video clips while in the store can be targeted with timely and relevant offers through mobile ad networks,” says Nader Kobeissi, MD MENA at On Device Research.
The two most significant platforms that brans should consider for reaching shoppers is Facebook and YouTube. Retailers and brands should also look for advertising opportunities with local players like Souq.com and Dubizzle in UAE.
Telr, the multi-currency and multi-lingual payment gateway for SMEs, headquartered in Singapore and Dubai, has just raised a Series A round from Singapore-based Hatcher and Middle-East based iMENA. This makes Telr the first online payment gateway in the region to secure investment in growth funding in the first year of operations from both South East Asia and the Middle East. The round was closed almost two weeks after Telr announced its merger with Innovate Payments and officially began operations.
The amount of the funding is undisclosed, but Elias Ghanem, ex-PayPal MD and Telr’s Co-founder confirms that “iMENA is significantly investing in Telr, and in return, they are getting a significant amount of equity,” which comes as no surprise, knowing that iMENA--who is backed by Etisalat--owns the majority stake in most of its portfolio companies. This news brings the total number of iMENA’s investments to seven, placing Telr alongside Hello Food, Easy Taxi, Citra Style, Sell Any Car, Open Souq, and Reserve Out.
Launched in January 2014, Telr’s business model was to offer payment solutions to emerging markets across the Middle East, Africa, and Asia. Hence, establishing a dual presence was critical to the success of the business. The young startup already has a co-founder in the Middle East—Elias Ghanem—and a co-founder in Singapore, Sirish Kumar; as well as headquarters in both regions. Hatcher provided the seed investment out of Singapore. “What we were missing,” states Elias, “was the local big player who can help us grow. Now we have it.”
Through iMENA's existing--and pending--operations in ecommerce sites, Telr will accelerate its market penetration by getting first-hand information about the payment gateway challenges the ecommerce websites are facing across the region. Telr will also benefit from iMENA's presence in terms of offices and businesses across Jordan, UAE, and Saudi.
"The investor pool behind iMENA is what makes them fantastic partners for us," says Elias, "from telecos to banks to big corporations. These are door openers and businesses themselves."
Today, Telr operates out of its office in Dubai, and it will expand across the Middle East, Africa, and South East Asia in the next 6 to 12 months. The main objective of the payment gateway is to focus on finding an alternative solution to COD. "We believe today that the [credit/debit] card's population is a small one compared to the overall banked population, and the banked population also want to go online," explains Elias.
Besides being a payment gateway, the co-founders are working on providing cash management. "Cash management is about leveraging the data. We want to turn Telr into a data-driven organization," says Elias. "Based on the data we get from the payment gateway, we can come up with a lot of decisions on how to engage with our merchant partners."
The largest gathering of digital executives and entrepreneurs in Saudi Arabia is only a few days away! ArabNet Riyadh 2014 is set to take place on November 11th to 13th at the Four Seasons Hotel Riyadh, bringing together more than 80 speakers, 40 sponsors and partners, and 800 attendees to discuss the latest trends and opportunities in the Saudi digital sector.
Thought leaders and industry experts at the forum will tackle the epic boom in Arabic digital content and the opportunities for monetizing it, with a special focus on content and video.
Check out the agenda for more details on the topics to be discussed during the two-day event.
Last June, during the ArabNet Digital Summit 2014, the Managing Director of Eastern Europe and the Middle East and Africa region at Criteo, Dirk Henke, took to the stage talk about the change brought on by mobile for advertisers. He details this phenomena in the context of the quickly changing landscape triggered by the evolving behaviour of individuals and the advent of younger generations.
Henke commenced his talk noting that “it’s a really fascinating region, with a lot of spirit and a lot of things happening.” He cites Souk as an example of success, along with a number of local airway companies that are doing a phenomenal job, especially when compared with their European and US counterparts, before moving on to the “recent leanings and the magic” from Criteo’s shift into mobile advertising.
Desktop e-commerce is flattening. Mobile is the one actually spurring the growth. While it’s no secret that internet usage is growing on mobile, usage on desktop is growing as well, albeit at a slower pace. However the real surprise comes when you look at e-commerce activity. Overall, just like internet usage, activity is growing. But if you remove mobile commerce from the equation, you’ll see that e-commerce is actually quite flat. The notion still held by some advertisers that mobile users do not make purchases from mobile is patently false. Advertising on mobile is vital.
While making the shift to mobile, Criteo were faced three main challenges. “Number one, you really have to deal with two completely different worlds.” It’s mobile browsers versus in app advertising. Two completely different technologies, different environments with different needs and challenges “when it comes to advertising in particular.” Two, mobile advertising has mostly been spray and pray: “just get it out there and hopefully as many people as possible will download it (...) and then we just we hope that they will use it.” But retention rates for apps are extremely low. Only few people will come back to use an app after they initially download it. And to make things worse, actions and conversion rates are quite low as well for the ones that do come back. Three, the lack of standards. “This is a really big challenge for the advertising world when it comes to mobile,” since it came up “pretty quickly, something that is pretty new,” we have to work on the standards he concluded. So far, there hasn’t been any personalized ads in the mobile world, flash doesn’t work, and there are no real equivalents to URLs that could enable advertisers to channel users to the product site where they can immediately buy.
“The good news,” Henke adds, “the solutions are there.” A number of companies are looking to solve these challenges. There are efforts to develop deep linking solutions privacy positive IDs - means to track individuals without prying too much - and HTML5 could replace flash.
Another piece of good news, online consumption is shifting to mobile, and ad spend is following suit. The shift is even faster from desktop to mobile than it was from offline to online. For more information, check the the full talk below.
OpenSooq is extremely popular in Libya and Jordan, and Saudi Arabia, they even surpass Dubizzle’s amount of traffic in these countries, but not in the UAE and in the rest of the region. According to Alexa. They also have a good foundation in Kuwait.
OpenSooq announced that their mobile app is now the largest mobile classifieds app in the MENA, surpassing 2 million downloads within the first year of its launch — the number of downloads on Google Play alone is 1m to 5m, so they’re definitely ahead of Dubizzle on Android; who show to have 100k to 500k downloads. If the future is in mobile, then OpenSooq is winning this competitive classifieds race. iTunes unfortunately doesn’t show numbers so we can’t be completely sure about the iOS situation.
So far their platform receives more than 250 million page views per month, and their growth over the year should keep the Dubizzle team on their toes.
The classifieds company was founded in 2008 by Salah Sharef, and became part of iMENA Group in 2012. Their platform allows businesses to sell their products and services online with no intermediaries to millions of users who can easily browse through thousands of goods, products, and services. They cover various categories that include real estate, automotive, electronics, furniture, jobs, and more.
Given the Middle East's healthy smartphone penetration rates relative to developed countries, reaching as high as 73% in KSA compared to 62% in the United Kingdom, the achievement is sure to bolster the company's future growth, especially considering their recent investment from iMENA.
According to Salah, “People in the region need an easy way to buy and sell from each other online, and OpenSooq has been at the forefront of this demand – connecting millions of users directly with each other and allowing them to transact a wide range of products and services online for free.”
iMENA’s Founder & CEO Adey Salamin, added “The explosive growth in mobile Internet within the region will reshape the Arabic classifieds market. It is exciting to help drive OpenSooq to scale to new heights while leveraging our understanding of the local and regional markets. Surpassing 2 million mobile application downloads plus achieving a growth of over 20 times in our mobile site traffic this year is only the beginning while we continue to innovate our product offerings to enable users to sell and buy for free.”
When Gaza’s first and only accelerator launched in 2013, the founders of Gaza Sky Geeks were aware of the relentless spirit needed to kickstart such a venture. They were working with the first two startups to enroll: Datrios and DWBI Solutions. Unfortunately, just a couple of months into it, war soon followed: “We held our second Startup Weekend just two weeks before the conflict [with Israel] started,” Jessica Rose, communication manager at GSG, told Arabnet. “Funding for projects like this has been understandably eclipsed by the need to fund reconstruction.”
Persistent, Gaza Sky Geeks aim to get back on their feet through a massive online crowd-funding campaign that will go live next week. The campaign, which will go global on its release, aims to raise a minimum of $70,000 to keep the accelerator running until 2015. “We've had such a great response from partners and press so far,” said Rose. “We received interest from North America, Europe, the Middle East and as far as Japan, even though we're currently only putting out material in English and Arabic.” GSG has so far managed to raise a solid $30,000, with rumors of large companies like Google rallying for support.
The campaign will be accepting various payment options, including credit card and Paypal. Check the website here.
Penguin 3.0 started rolling out late Friday night, October 17th, and will continue to do so for next few weeks on a worldwide basis. It impacts less than 1% of English queries but may have a greater impact in other languages, but it is only a refresh, no new signals have been added.
It helps sites recover from previous Penguin updates that fixed their link profile, and demotes sites that have a bad link profile. Pierre Far from Google confirmed the update's roll-out a couple of weeks ago:
I never forget the day, April 24th 2012, Google rolls out the Penguin update which became to be known as the new age in SEO; a dark age for black-hat SEO’s around the globe, but which also made the lives of the unlucky few ethical SEO’s who had to clean up the mess of clients who had already been penalized by their previous black-hat SEO agencies work.
Google understood this and on the 16th of October 2012 they officially announced the release of their Disavow Tool. The instructions were simple, “If you’ve been notified of a manual spam action based on “unnatural links” pointing to your site, this tool can help you address the issue. If you haven’t gotten this notification, this tool generally isn’t something you need to worry about.” The words to pay attention to here are “If you haven’t gotten this notification, this tool generally isn’t something you need to worry about.” This made things tricky, because Penguin penalized your website in two very different ways:
· Manual Penalty – This was when you got the notification and was like a yellow card. If you got this notification you could upload a disavow request and with some good behavior you would still be in the game.
· Algorithmic Penalty – This was when you didn’t get the notification and was like a red card. This was where you had no way of knowing you were penalized other than seeing a sharp drop in rankings and organic traffic; you were out of the game.
If you had the latter, you have my sympathy. I personally have taken on multiple clients who had come to me as a result of being algorithmically penalized and I know the recovery process can be a daunting procedure with a high fail rate, without any way of getting back into previous rankings even if you did everything Google had told you to do. But don’t panic, because due to my experience in solving these issues for my clients, I have some great methods that I can share with you to speed up and ‘maneuver’ your way out of an algorithmic penalty. If you suspect you have an algorithmic penalty what you need to do is:
Step 1 – Backlink Audit, because although you might have dropped in rankings and your organic traffic has plummeted, you need to identify the cause and be 100% sure you have been algorithmically penalized. To do this audit you will need access to reliable tools, such as Majestic SEO or Moz’s Open Site Explorer, as well as have access to Google Webmaster Tools for the website you are working on. Once you have access to one of these two tools and GWMT the things you will need to be reviewing are:
· Link sources and identifying what kind of websites are linking back to your website. Things to look out for here are directory links, article links, large amounts of unrelated links, links from malicious websites, site-wide links and links from link-farms (which can be identified by reviewing inbound ip addresses). If there are a disproportionate amount of these links and you plummeted following a Penguin release without any sort of notification, there is a good chance your website has been algorithmically penalized.
· Review and identify over-optimized anchor text links, because the odds are if you had a shady SEO building spammy links, they would have most certainly over-used or over-targeted specific terms. By sorting and listing inbound links by anchor text you can quickly look for similar keywords and when you spot a large number of links which contain a specific (usually competitive) anchor text, there is a good chance the source of these links have somewhat participated in your algorithmic penalty.
· Geographical locations of your links, as in most cases if your business is based in Dubai, you are likely to see a large number of inbound links from UAE and potentially the US, because most websites globally are still hosted from the United States. If you start seeing large amounts of links from places like, Pakistan, Russia or India (which are countries known for link farming) I would start worrying and looking further into these links.
Step 2 – Once you are absolutely sure that you have a penalty, do what is recommended and upload a disavow request. However, as mentioned earlier, disavowing alone does not fix the problem. What you also need to do is look for opportunities to establish a new path and start over again. But beware as this may not always be feasible.
The method I have used in the past which has always worked, and it really helps if you have a local business with a generic top level domain (gTLD) is to switch to a local top level domain. Most of the timeclients choose to have .COM or .ORG domain even if their business is targeting users in UAE or any other specific country, and these scenarios present an amazing opportunity to start from fresh, as all you have to do is switch from a gTLD to a ccTLD (country code top level domain) or even switch between gTLD’s, i.e. from a .COM to a .ORG. However, one must remember that you are essentially starting from scratch, but it does mean you can keep your business name and start ranking again.
NOTE: this will also work vice versa, so if you have a ccTLD you could switch to a gTLD, but one thing you have to remember is that you have to ‘kill off’ any association between the top level domains.
The method above is not a recovery, but more a maneuver around a Penguin penalty and may not be the most ideal solution for all campaigns, so if you are one of the unlucky SEO’s who had to deal with a penalized website and then was lucky enough to recover in a way other than what’s mentioned above, please share your experience with us in the comments section.
Oculus Is Coming to ArabNet Riyadh 2014 - Be Among the First in KSA to Try It!
This year and for the first time in Saudi Arabia, attendees of ArabNet Riyadh 2014 will be able to try out Oculus, courtesy of Facebook.
That's not all. We will also be welcoming more than 80 speakers and 40 giants of the digital and tech industry. Meet six of the leaders who will be sharing their insights and perspectives at the largest digital gathering in the Kingdom, taking place on November 11-13 at the Four Seasons Hotel, Riyadh.
Check out the other speakers coming to ArabNet Riyadh 2014 here .
Hurry to register now to benefit from late bird prices.
Online food ordering/delivery has been a reality around the world for quite a while now. There are countless local, regional and global platforms for the service. Like many other services and products, online food ordering had found its way to our region. The simple additional infrastructure the service needs created an abundance in platforms.
HelloFood, for instance, facilitates online food ordering in over 40 countries, including four countries in the MENA region—KSA, Qatar, Jordan, and Lebanon. In KSA, there are several local platforms, including HungerStation, with over 600 restaurants; Easy2Eat; and WJBTY, which delivers “homemade” meals.
However, there seems to be more regional platforms. The list includes Talabt.com, operating in the GCC; Otlob.com, operating in Egypt and KSA; Hunger Quenchers, operating in India and the GCC; and FoodOnClick, operating in UAE, KSA, Lebanon, Oman and Qatar; to name a few.
Factors of success
Food ordering might seem like the simplest process in the world; you order food, and it gets delivered. That is, simply, not true. In a world where you can eat Chinese food in New York and Turkish food in Sweden, the service has gone a long way in sophistication, with huge steps still ahead.
Naturally, online food ordering should make things easier for both customers and restaurants. But that means more work on the ordering platform end to make it so. It all comes down to “passionate, innovative developers and salesmen,” according to Ebrahim Al Jassim, CEO at the Saudi local platform HungerStation. Beschir Hussain, Managing Director Middle East at the global platform HelloFood, identifies the key success factor as having “marketplace efficiency.”
Foodonclick, the regional platform, agrees. It takes “a capable sales team and marketing know-how and budget to attract both [customers and restaurants]. This is a difficult task to master,” said Kivanc Arkac, CEO at Foodonclick. In other words, the level of success relies on how well you provide the basics: customer service, sales and marketing.
The thing is, though, that all major online food ordering platforms are doing that. They all have beautifully designed websites where users create accounts quickly and customize their orders; apps for iOS and Android. Some even have apps for BlackBerry and Windows Phone and provide the service in major cities and areas. They use social media to “listen to our customer’s voice [and] reflect our brand’s image and to attend to our user’s concerns and suggestions in our conversational tone,” according to Arkac.
Having many platforms with the same business model poses important questions: How do they compete? What would be a company’s competitive edge over another? Can the market accommodate all those platforms, one way or the other? Or is it more complicated than that?
“At first glance, people often make the mistaken assumption that our business only takes a fancy website with a list of restaurants to succeed,” said Arkac. “In reality, success hinges on our ability to provide a smooth customer experience while generating a sufficient quantity of orders for our partner restaurants.”
Al Jassim regards their “user-friendly app and devoted customer service team” as the strongest factor in their position in the market. He thinks that being the only Saudi CEO in the local market is irrelevant. “This is not a matter of nationality; it is a matter of passion,” he said.
Apparently, it’s all in the details! Factors like the number of partner restaurants, responsiveness of websites and apps, diversity of cuisines, etc. seem to be the main elements of competition. When it comes to local markets, it does not necessarily mean that bigger platforms are stronger. Foodonclick, for instance, has partnerships with over 2,000 restaurants, overall; while HungerStation is limited to 600, so far. But, on the other hand, Foodonclick operates in two Saudi cities—Riyadh and Jeddah—only, while HungerStation provides the service to 18 Saudi cities! HelloFood covers 9 cities and Otlob.com covers 5.
That could lead us to say that HungerStation is the leader of the KSA market. But that doesn’t mean that local platforms are always stronger, because they are focused on the local market; sometimes, a global platform gains lots of credibility, just for being global.
While Beschir Hussain sees HelloFood’s competitive edge in being “the most global company, present in nearly 50 countries;” he raises a very interesting point: “Our main competition is phone ordering. I do believe that online ordering will replace phone ordering to a great extent in the future.”
Ordering food by phone is, indeed, still the dominant method in our region, and KSA is not an exception. Perhaps that’s the reason why we don’t see ‘wars’ among platforms, and it probably is the reason that none of the executives of these platforms is worried about the decision of Zomato—the vast restaurant reviewing platform—to enter the market as an online food ordering platform as well.
The market of online food ordering is huge, and it seems to have room for each and every sort of platform in the next year or two. The competitors in the race are still warming up. That is probably why we haven’t seen any remarkable innovation, like we saw in other sectors, such as wearables for example.
But that will not be the case for long. The growth of every web sector in our region is astoundingly rapid. We’ve seen many services/products providers that could not keep up with the market, because the speed of the increase in demand was unpredictable. Participants in this race should seek a head-start that would prove very useful in the near future.
Commercial operations, such as acquisitions and mergers, expansion of partnerships and areas of service, enhancing customer service and sales, and constant updates to apps and websites would definitely be useful to all parties involved—restaurants, customers and platforms. But the key to any competitive advantage, as the history of business tells us, has always been innovation.
A funny lady in New Jersey once tweeted, “I won’t be impressed with technology until I can download food.” Who knows? With 3D printing, that doesn’t seem so farfetched.
Food downloading or not, one fact remains true: those who innovate will always be at the top of any market. Online food ordering is no exception!
IPO-Track Investing: The Most Capital Efficient Way to Grow Wealth and Global Leadership
Technology, health, education, renewable energy, water…even a space program?
Identifying key growth industries is great, but also critical to MENA’s future is identifying and supporting the growth of IPO-track companies within each industry that will deliver the products and services needed.
Why? IPOs are the single most powerful way to deliver growth and jobs, because of their unique high revenue generation and job multiplier effect. SMEs are important for supporting local economies, but they are not the economic growth accelerators like IPO-track companies.
The truth is always in the numbers. Let’s take a look at how the world’s strongest economy has grown over the past 40 years, eclipsing the industrial revolution to lead the new entrepreneurial revolution through companies like Apple, Google, Amazon, Facebook, Uber, and thousands more.
· Less than 0.2% of GDP is invested through U.S. venture capital annually – yet venture-backed companies generate 21% of US GDP
· IPOs stimulate exponential growth that delivers 92% of jobs created, post-IPO.
· For each new innovation job, 5 more jobs (in medicine, accounting, restaurants, commerce) are created through the economic multiplier effect, versus only 1.7 jobs for each new manufacturing job.
· Innovation companies have 3x the multiplier effect of non-innovation jobs.
How can we identify an IPO-track company versus an SME, since at the beginningboth are small? The one with potential for IPO is like a baby elephant, able to achieve substantial scale of growth. It’s not a restaurant but perhaps a restaurant chain (e.g. Starbucks or Chipotle). IPO investors are growth, momentum investors seeking companies that can achieve large or global scale of operations from a solid business foundation at very high growth rates. IPO investors accept risk early on in a large business’ lifecycle to capture that portion of super high growth, where equity value can multiply 200-300-400% in a short time horizon.
Today’s U.S. IPO markets usually identify the “baby elephants” as having a minimum of $100M in annual revenues with high growth momentum and $1B in market capitalization. Companies within the 1-3 year window to IPO show at least $30M in revenues, growing 200-300% or more annually.
MENA leadership has shown impressive vision and commitment to growing their knowledge economies. Yet, despite great investments in incubators, accelerators, early stage funding, and more, the most powerful and capital efficient investment for economic growth—IPO-potential companies—has been missing from all the reports and plans. Even the US government doesn’t fully appreciate what IPOs deliver to the economy. If they did, the financial crisis of the past decade would have been corrected with laser focus much more quickly. America’s own IPO markets have languished for years after the Internet Bubble bursted while other economic remedies were attempted, with little to show for the trillions of dollars spent.
MENA investors are very comfortable and sophisticated with regards to real estate, natural resources, and other classic private equity opportunities. While having a strong infrastructure is important, these “industrial” investments are not propelling the future. In fact, I worry that the expensive infrastructure MENA has built is not sustainable in the future of lower oil prices, which are already beginning to materialize. Investing in “next economy” innovation businesses will be needed to sustain and create opportunities for future global leadership.
I am asked all the time, can MENA create IPO companies? Of course, it can! The largest IPO in history is Alibaba, a non-US IPO. Collectively, MENA has the next emerging markets’ economy with a fast growing, underserved population. MENA also has the brainpower and more financial resources than perhaps anywhere on the planet. If its visionary leaders focus their investments in IPO-track building opportunities, they have ample capacity to create whatever they wish.
MENA also has the advantage of following in Silicon Valley’s footsteps: able to magnify the successes, while avoiding the mistakes. With excellent investment and execution, perhaps Silicon Valley’s 40-year model can be reduced dramatically. Of course, other factors may affect outcomes, such as legislation, intellectual property protection, early stage funding dearth, or cultural and personal factors. But the first step to a cure is always through diagnosis. Once we realize that building IPO-track companies is the path to accelerated growth, jobs, innovation, leadership and improved quality of life, hen we can chip away at the obstacles blocking such opportunities.
From my recent trips to the MENA region this year, and reception of MENA investors in Silicon Valley, it is clear that there is no lack of talent, ideas, and dedication in the region. Successful entrepreneurs are actively investing and giving back, and could reach critical mass faster if matching grants and other acceleration strategies were applied. Incubators and accelerators too often just offer space. Mentoring, networking, and financing are also key ingredients that must be active components of these programs.
Don’t be shy, MENA – THING BIG!
MENA is the next emerging growth economy, with potential for highest growth rates and great financial assets. This combination is unique globally, and the results can be astronomical if the aim is accurate. For a successful journey, knowing the destination from the start is the key to efficiently maximizing outcomes: make it your #1 priority to identify and grow your IPO-track opportunities.
Sawerly Goes to the GITR Regional Final in the Middle East
The local Saudi final competition for entrepreneurs took place in Riyadh on September 24, 2014. Eight of the most promising startups in Saudi Arabia battled in the Four Seasons Hotel in Riyadh, Saudi Arabia, out of which the winner of #GITRKSA is the startup Sawerly, who will now go on to the Regional Final of the Middle East on the 5th of November
This is exciting news for young start-ups in the Middle East with innovative concepts! STC partnered with “Get in the Ring” to give Arab entrepreneurs a big opportunity to pitch and present their startups and connect with investors as well as create a fan base.
ArabNet is also proud to partner with STC for the event; as it truly offers opportunities for startups to get more public attention, and to get the action going in anticipation ofthe upcoming ArabNet Riyadh Forum.
“Get in the Ring” challenge is a micro entrepreneur’s Olympiad for startups to battle and pitch their products and services. The event is held in more than 64 countries where leading and emerging companies can meet major investors and reach a large audience.
This will create opportunities for even more startups worldwide, as well as developing entrepreneurship in the Middle East.
The Middle East entrepreneur final will be held in Riyadh on November 05, 2014. Applications for participation in the challenge can be submitted through this link:
So if you’re a startup looking for funding and/or international expansion. Then you should definitely ‘Get in the Ring’ today!
Wysada Completes LARGEST EVER Series A Round by ME Early Stage E-commerce Startup
Wysada, the leading online luxury retailer of home goods, décor and interior furnishings in the Middle East, has just announced that it has completed a Series A investment round of over five million dollars; a deal that represents the single largest Series A raised by an early-stage e-commerce start-up in the Middle East.
The proceeds of the round will be used to fuel the company’s rapid growth and expand current operations in Jordan, the United Arab Emirates (UAE) and the Kingdom of Saudi Arabia (KSA). Key strategic priorities for the company include expanded sales and marketing efforts, hiring, procurement and distribution, and a focus on accelerated growth in new markets across the GCC.
Wysada specializes in offering flash sales exclusively in luxury home goods and has the largest online selections of furniture, home furnishings, décor and goods in the region with over 700 premium brands. It was founded in Amman, Jordan in July 2012 by CEO Mohammad Musleh and started operations in January of the following year. It currently employs 75 personnel in sourcing offices, warehouses and fulfillment centers in London, Hong Kong, Istanbul, Jordan, UAE and KSA.
“This investment gives credibility to the company and shows that investors believe in this market,” explains Mohammad. He points out that this particular vertical of ecommerce has seen equally outstanding success in the West as well. Companies such as Wayfair Inc. and One Kings Lane have been valued at multiple billions of dollars.
In the next twelve months Wysada should be live in all GCC countries. Further expansion into the Levant and North Africa will happen eventually as well, but later “in the future, once the company is stable.” Countries such as Egypt for instance represent a huge market and opportunity that “it is its own project.”
“With online users increasing from 74 million to well over 100 million by 2015 and ecommerce growing by 30% annually in our geography, we are well positioned to dominate the market,” Mohammad added. “Given our incredible traction since the launch, we pursued this round combining local, regional, and global expertise to capitalize on this market opportunity. Around 70% of transactions we have had were made by repeat buyers; we are on track in growing Wysada dramatically over the next six months, with a laser focus on serving our loyal members with the most coveted and well-respected premium home-ware brands, sales, and content they have come to except from Wysada.”
The round was led by Badia Impact Fund, a venture capital fund belonging to Silicon Badia; a global group of venture funds based in New York City and Jordan, with participation from new strategic investors from the Kingdom of Saudi Arabia and the Gulf Cooperation Council (GCC) alongside existing investors.
Silicon Badia Managing Partner Namek Zu’bi explained the fund’s interest in Wysada, citing three overriding factors that went into their decision:
First, the general growth in ecommerce in the Middle East region along with favorable factors for continued growth, comprised of a various elements such as demographics, mobile penetration, high GDP per capita and so on.
Second, “We loved the home goods category and there is a large demand for this type of product in the region with better unit economics than your typical fashion good”.
Third, “and more importantly, we love the management team behind Wysada, they get this business, get logistics, and get the numbers and how hard it is to make ecommerce a success. Nevertheless it is still going to be an uphill battle but we are up for it.”
“We are pleased to lead the company’s first formal institutional funding round alongside strong existing and new investors to help position Wysada as the go-to destination for luxury home interiors throughout the Arab world, and to accelerate their growth and market penetration,” he concluded.
Get Real-time, Decentralized, Unbiased News with Completure
“We wanted to create a way to reach out to the people directly and organize content in a way that would allow us to get top news, in any country, untouched and unbiased,” - Mark Malkoun, Founder & CEO of Completure.
Completure is a photo-centric citizen journalism app that allows users to create their own news reports and discover important local and global stories. The app utilize a camera and GPS technology to create news, while votes by the community determine which stories are worthy to get exposure.
Mark and his partner Emile Khattar, both news junkies, had always been cautious of mainstream news reporting. “We are used to not believing everything we hear on big media corporations.” This in turn lead them to create an accurate, real-time, no-intermediary, decentralized and unbiased news service.
The app, which was known as Sign.al at the time, was a 1st runner up at the Ideathon competition at the ArabNet Digital Summit 2012, and has been featured on TheNextWeb and Mashable.
How Completure works
Users can create a story in seconds by taking a few pics and adding a title that describes the event they are reporting. The background for each picture is then verified by abstracting the time and location for the Exif (Exchangeable image file format). Pictures that are older than three days or are not geotagged are rejected.
The app also allows users to listen in on police scanners in 19 countries to get an idea of what's going on and what kind of events to report, a feature that is available for $2.99 in the Apple App store, but Completure offers it for free.
Top stories are then determined using an algorithm that analyzes metrics like sharing, views, and interactions. User can also browse stories by location to see what's happening in different countries.
The app is reminiscent of CNN IReport. Completure however differentiates itself in the way stories are curated. “Out of 1000's of stories IReport receives, maybe one or 2 are selected and reported. With Completure, we are creating a community, a social network that empowers and encourages the community to share for news purposes.”
Completure was made available for download 3 weeks ago, and has received an overwhelmingly positive reception so far from around the globe with individuals using the app to cover the Chinese protest against Japan, the Pope's visit to Lebanon, and the Occupy Wall street movement in the US.
Mark Malkoun holds a Finance degree in HEC and Concordia University. Completure is his third startups, having previously founded Hintout.com and contactmytutor.com. He concluded his interview with his message for up and coming entrepreneurs: “It's not going to work the first time, but keep trying until it does. Know that whenever you feel like giving up, that's when you are the closest to your goal.”