Saudi E-Commerce, You Cant be the Amazon of Everything.

Why are some local e-commerce websites failing in Saudi Arabia? The idea of following a trend is all the wrong reasons to enter a business. After short glory, most fail to sustain growth, why? you can’t always point at the economy, you’re part of the economy and you must apply the proper tools to sustain your business. The opportunity is enormous but as long as you’re applying the old trick for short wins you’ll only live short.

Saudi consumer spending on travel, fashion, and beauty are the biggest in the region and Souq thrived on the Saudi market but the question still remains. Where are the local potential brands? Things must change. There are generic problems with E-Commerce, such as a reliable payment gateway but even regional brands like PAYFORT became an Amazon company. In fact, many E-commerce platforms prefer PAYFORT after Amazon bought the company, why? They trust Amazon…the brand.

First and Foremost, you can’t be the Amazon of things. In recent years, young entrepreneurs and traditional businessmen with trading mindsets thought the model of Amazon works for everything. Entrepreneurs dream of becoming the next big thing and this is their ultimate dream but unfortunately, they overlook the reality of things or the basic understanding of how things work besides having the resources

Dreams are big but dreams require tools to become reality and one of the key tools is knowledge. Without knowledge and experience, the risks are high. There is clearly an emotional hype across the region on technology and dreamers are emotionally charged to be part of the next big story. I fully support the way forward but I’m asking dreamers to walk before they fly, each step is a learning experience and very costly. I’m speaking out of experience in my industry where many launched or revisited their brands without prior experience and knowledge. The results were very costly and I’ve published many case studies on Alnahdi, Rabea Tea and Cofique; all available here on Linkedin under articles.

In response to the decline of traditional retail, everyone’s answer was: Go “online” to survive. So both the traditional trader and the entrepreneur decided to buy the idea over value but one can sit behind his/her desk and ask where is the value?

If Amazon, the shark, owns a smaller shark (Souq) in the region and then there’s Noon, a heavily-funded ‘can stand all sorts of waves until they find there market space. The key question is, where should the small entrepreneur fit in this equation or even the traditional local businesses that decided to develop their own E-Commerce platform. Even most websites of local brands failed to become a destination while their Instagram pages have huge followers.

A question to ask is, did all E-Commerce platforms mature as brands? In my humble opinion, few independent E-commerce platforms have matured to be a brand out of necessity due to price, time, convenience and availability and since the price is the ultimate factor compared to others, its either price or the brand.

If we look at some categories point of reference in E-Commerce, there are some that moved away from mainstream and were able to build their relevance ( http://www.dokkanafkar.com ; http://www.cobone.com ) Hunger Station and many more. E-commerce is a reality but being relevant in the most cluttered marketplace is key to success, you can’t be the Amazon of Everything.

The idea of selling everything with a lower price and in volume online is Amazon’s model. Amazon’s expansion strategy outside of Europe and the US is to own the largest share in any leading e-commerce and dictate its value for full transformation as an Amazon Company. Souq is a model and few are in the pipeline in Turkey, Brazil, and a few other countries. 

The Amazon of things

The E-commerce market is cluttered with Amazon’s business model and each country has it’s own Amazon wannabe. In short term, this might be viable but in the long-term, it slows growth. Now you might ask why? Well, each sector has generic values created by the category creator and that brand becomes the point of reference. In the case of E-commerce, Amazon is the industry’s point of reference and one of the early pioneers and game changer. If Amazon’s model is replicated by everyone that enters the E-commerce industry then those same values are commoditized by others while Amazon remains the brand, the most trusted one.

So can you become the Amazon of things? Well, before you sit with your friends over shisha and decide the path of your business with a group of people that never strategized in their life or their business success is inherited, you must first believe that traditional business and online business are two different creatures with extremely different sets of values. E-commerce requires a massive investment on all fronts, Startups’ focus should be on differentiating and growth not on “what worked for others will work for me.”

One point that really bugs me is how people get into business without understanding. Being technically savvy and having great business sense are two different things, each compliments the other. If you’re a tech-savvy with zero business logic, I recommend you get help and if you have so much money and you’re in rush to make money don’t enter the E-commerce business or app, it takes time to grow and requires patience. If you don’t believe in written strategies, knowledge, brand building or vision and mission then stop there.

No Strategy, No Success!

Second, business strategy implementation failure is a major drawback in many cases. If you don’t have a strategy, what are you selling? E-commerce at this stage commoditises your business and the only relevance stronger than quality is price and time. How much is it? How fast can I get it? Can you guarantee two days delivery? Most functional values are shared values. You need a robust organization and consumer centric to succeed.

The dynamic of how things change fast requires an organization structure that adapts easily to all changes and is able to survive threats as well as embrace the ‘new’ part of the ongoing change. E-commerce business is mainly built on trust and you’re tested every second of the customer’s journey and unlike traditional business, the journey doesn’t end at the cashier. The journey takes much longer and sometimes up to a month, that depends on your time and how fast you deliver, guarantee, warranty, exchange, refunds or returns. The customer owns the journey and his words matter the most, the values he experienced build a certain image in his mind which can either be positive or negative. The only way to build a great online brand is to become a “customer-centric” organization and to travel on the same journey that great brands traveled or else you’re doomed.

The Mind Challenge

A trade mindset will suffer as an online business. A trader’s purpose is money earned immediately and online business requires a much longer time to mature or even breakeven. It took Amazon over twenty years! why would it take you a lot less? Online business is a cluttered market and in order to stay relevant, you must continuously innovate. It requires constant investment in innovation, brand, and point of difference. To survive in E-commerce you must focus on being relevant and that requires a massive investment on people, marketing and technology.

Back in the ‘50s or even late ‘40s, the service industry was relatively new and brand as a subject was less scientific, today with E-commerce we’re back in the same age but in online trading instead of the old traditional one. In the near future, as the industry evolves, no business will survive unless it owns a unique set of values. Imagine someone blindfolds you and requests you to walk an entire block alone, the first thought is to remove fear and that requires “Trust”, so who will you trust? You’re all alone to explore this new experience.

For a new E-commerce platform to win, it must realize the Blindfolded Customer’s experience and find ways to build “Trust”;. This is the reason why Amazon decided to position its brand as “Customer Centric”

Those who are successful in traditional business and managing a successful business model will face difficulty adapting to new trends. Why? Online is a different nature and requires a completely different strategy. Some bet on their brand equity or relevance to help penetrate the online market. In fact, airlines sell more tickets through other online vendors than their own. Hotels sell a lot more rooms through other channels than their own.

Brands like Expedia, Booking.com and few others are online travel destinations that have become the points of reference for the online experience knows as ” Booking” the value to book instantaneously. versus the old traditional travel agencies experience was known as “ticketing” values dictate experience.

Where is Thomas Cook today? the once ticketing giant. Thomas Cook is thriving, they revisited their business strategy and repositioned from a ticket company to a holiday company. Thomas Cook today is thriving as a brand both online and offline and only a few Thomas Cook retail offices are available in major metropolitan cities across the globe.

The One Man Show!

The one-man show hurts culture and values. You can’t have growth based on a few individuals, it’s the organization that matters over a few individuals. There are decision-making flaws such as centralized decision- making, interrupting a working strategy or even controlling the details.

E-commerce is dynamic and too fast and as a leader, you must create decision-makers across the board. Sadly, the reality in our region is that our decision-making is centralized i.e. “The One Man Show.”

Let’s look at key functional values in e-commerce global trend:

A, Easy returns is one of the key factors to be successful.

B, It’s a price war… (Get out if you can’t fight).

C, Your sale doesn’t end at click-paid button. The sale is not

finalized until the 14 days return period is over.

D, Customer trust is not just on purchases but exchange/return and

complaints management.

E, Customers control the rating and reputation and this is

everything. If you don’t understand brand-building, don’t get into

online ventures. Unless you own a strong offline brand, don’t go

online.

F, Two to three days delivery max or forget it.

G, Warranty all across and guarantees on delivery.

H, Easy returns and hassle-free  (Mental comfort is key).

I, Hardly any offers that lures the audience or they’re poorly packaged.

E-Commerce is an uphill battle. You’re fighting giants on values they strongly own and helped build their brands, to America E-commerce is Amazon and to the Middle East it”s Souq. I strongly believe that the future of E-commerce is specialty. Today’s small players are tomorrow’s big players. Stick to your specialty, it’s the road to brand building.

Baaghil N’ Brand

After two years of data analysis, I came up with a model that helps both online and traditional businesses on how to build their brand without the need for advertising.

Brand G

 

My 8-steps brand-building model answers every problem of customer and user experience. A brand needs to be in the heart of every touch point and brand building comes through interaction, that’s the most genuine brand building process over a false claim.

Your brand is the point of reference and must become relevant. Your Customer experience means nothing without brand values and just how your customer experience and its design means nothing without customer retention. This image illustrates the 8-steps required to become relevant in the brand building process. Feel free to contact me for a 1-day session on Brand Maturity: the steps required for Brand building. Don’t waste your resources on advertising, own a BRAND!

Baaghil is Middle East’s most recognized name on Brand. His unconventional way of thinking has earned him recognition on the world stage including endorsements by America”s best.

Ideas are disruptive, not technology 

In transportation “UBER” gave us the opportunity to order a car, a better car more personalized. Technology enabled such idea, ideas are disruptive not technology. Without idea’s technology is useless, technology is born out of ideas. 
Facebook gave us the opportunity to connect with those we went to school with and friends we lost along the way. It’s the idea that’s social disruptive not the technology, technology enabled. 
Airbnb gave is the opportunity to enjoy the local sense in every city we travel too. 

AirBnB being app gave the idea of “Affordable but in fact their price are close to all hotels”. This whole new way of accommodation is disruptive, technology enabled the idea. 
To book your flight tickets, hotels and activity through apps such as Expedia and others are ways to ease the pressure of going through long process of several parties just to have your ticket and hotel confirmed. Technology brought this great idea to life, technology enabled. 
Ideas are the most powerful business tools, they keep your business constant and on top. Without ideas, your money in the bank and all sort of technologies means zilch!!! 
Ideas are disruptive, technology is enabler. 

Baaghil 
From my speech in Berlin.

Al Othaim is eating Panda ALive?! 

Othaim is eating Panda alive: How is Al Othaim spearheading when it is operating less outlets but more profitable?

 

Did the previous management fail on Panda, Hyper Panda and Pandati? Yes! Because they never had a strategy and clearly confused strategic and tactical approaches. This has cost Panda a fortune over the years.

They failed to educate the customer on the purpose of Hyper beyond discounted supermarkets. The management failed to deliver the values of convenience through Pandati. While Baglas major footfalls are soft drinks, cigarets and basic items shoppers, Pandati focused on the basic items shoppers and this narrowed the segment that Baglas enjoy but yet Pandati went ahead like a furious lion to open across the country to get the Baglas out of business and they had their share of ill intent.  Baglas, on the other hand, are offering both delivery and emotional closeness (the delivery culture is huge and it has a strong emotional value). Pandati never enjoyed the loyality Baglas enjoyed and still enjoy. The management and marketing focused only what Data said but failed on “How To create a value and Deliver”. Unfortunately we have data Marketers who can’t create values beyond understanding what the data says.

What were the key lessons learned from their failure? First, to launch all these without a strategy and clear approach is futile. Second, engaging in a private label fiasco without grounding shoppers’ trust is also futile. A private label is heavily based on “trust” and when shoppers hardly trust you, they stay away from any private label that carries your name! Get it?

 

A year and half ago, I published a post on LinkedIn about Panda and it went viral. The summary of this post is that I argued Panda is in serious trouble. Also, I published a post on Pandati when it was first launched and presented why I think it is a failing concept. Today, all that I predicted has materialized. The point you have missed in these posts is that I was never articulating my insight to battle you but to shed some light and pull your business in the right direction.

Back then the marketing department of Panda took things personal and I understood why but they were professionals. Unlike the former heads of marketing in Alnahdi, Rabea and Cofique who literally went on personal attacks in their social posts but “I NEVER RESPOND TO PERSONAl ATTACKS”, my only response was time will tell. Few years down the line none of the above work for the respected  brands and my predictions were SPOT ON. I wish them all the best, the only adivse never  go on personal attacks and harass over social media  that’s what small minds do, great minds discuss subjects.

 

Today here is my advice to whoever is reading this article!

If you keep ignoring my free advice, you will face what Cofique, Rabea, Panda and Alnahdi went through. Yes, I am extremely confident of my criticisms and claims.

 

Today, Panda management is busy closing outlets more than opening. The rational behind this is restructuring while system remains the same.  The idea of  marketing under commercial is mind disturbing,  My free advice? Don’t do it, this is crazy, you will be doomed! I’ll remind you in future posts

In Panda’s management, some are misinformed on what comes first, commercial or marketing functions and unfortunately the are key decision-makers who take decisions based on ill-informed knowledge on how marketing functions beyond managing advertising agenies. On commercial and marketing approaches, each has a completely different task in business. I suggest you keep marketing away from commercial FREE ADVICE!

 

The reason why commercial and marketing approaches need to be as far as possible is because of the nature and function of each. Commercial is plain trade and it shifts values created by marketing. Think, for example, how would you place “Marketing & PR” under commercial? Commercial is trade and price-oriented while marketing is concerned with creating choices. We can now put the question more simply and answer: What comes first, price or choice? Of course, it is choice! Because this is basic and plain, I think I can generalize and draw the conclusion that corporate managers in our region are dead dumb on marketing.

 

While commercial is purely retail trade, someone needs to manage both perception and value. I doubt your management understands the importance of perception and value to all operations and the flow to sustain long term results over short term tactical returns. This kind of structure only digs a bigger hole and hardly moves the demand side of the organization to attain greater results or build a sustainable brand.

 

Now brand should never be under commercial –period! Get it right, Sherlock!

The private sector in our region works based and favoritism over experience and credentials. Most of the stakeholders are picked by the social merits of their last names or the same origin. We have to accept the truth that favortisim is the heart of our business culture not teamwork and that’s one of the primary weaknesses. I have seen unqualified people join company boards and get heavily paid and their last name is their own merit. The problem is far bigger than brand and marketing. It is people’s mindset and ethics. If you hire a friend because it is a friend, you should question your morality. This is something that has to be completely eradicated for every organization to serve its core purpose. As long as such unethical practices exist across the region, the private sector will fail to add value to any economy.

 

Many of us wish regional brands like Panda to do great but Panda’s current management is too busy pointing fingers at the previous management. This is what the beginning of failure looks like. Al Othaim supermarkets are actively taking a big chunk of Panda’s share while also exhibiting sustainable growth on volume that is achieved through means other than opening new stores.

Constant Engagment builds loyality and improves bottomline ROI  “FREE ADVICE” 

 

Al Othaim aims to reach 207 stores by end of 2019 and this my friends will flip the entire modern trade leadership in the kingdom. Al Othaim stopped listing brands that contribute less than 3% and deactivated those that contribute less than 3%. Clearly, volume is key to any supermarket but this also greatly improves the margin on trade. In the first quarter of 2018, Panda massively declined by 50%. Many non-profitable stores were closed but again Panda always failed on stores to creat volumes. The size of their stores, category arrangements and footfall were always off. Panda comes in many shapes you cannot figure out if this a price brand or an experience brand.

Their approach to improve margin and volume was to hit the low price. Typical trader mindset not marketers. They applied this tactic last Ramadan and they managed to cut the decline but are nowhere close to compete with Al Othaim. This is a very traditional approach and a commodity mindset to seasonal marketing. Hello CEO, here is some questions for you: Is Panda a price or discount brand? The two offer different values and experience. Why is price your ultimate value without creating choices for your customers? As crazy as it sounds, this why you chase bottom-line without vision and sustainability? Exactly. I did get your answer.

 

Al Othaim’s growth is store volume which is brilliant but why? Let’s look at these key points Al Othaim delivers:

 

A. Less choices and great quality. Al Othaim does well on private label, why? Known as ethical and trusted brand.

 

B. Heavy investment on footfall to shift from Panda and Tamimi, offers experience over price (I did not mention discount, do not get all fired up).

 

C. Import division that started three years ago to lure the segment that’s attached to Danube. Great assortments, big threat to Danube.

 

D. Al Othaim name hits localization. What to understand the relevance of localization? Read my book, “The Power of Belonging”. If Al Othaim improves the value and keeps innovation at the heart of their operations like they did in the recent years, they will take over by the end of 2019.

 

E. Saudization and customer service, two things they nailed right and showcased national pride.

 

One last question: Where are you on technology Mr AlOaithem.

 

They have invested well on functional values but a lot to work on in regards to emotional values.

 

Panda did not only lose trust from shoppers but also FMCG brands. Most FMCG brands are living a painful experience because of Panda’s hiccup.

Corporate mindset should change from trading to choice or we are doomed in the next two decades. The problem is the mindset across all sectors, not the economy! Stop blaming the economy when you lack basic foundational knowledge on how to build bottom up markets. Stop saying that consumer disposable income dropped when you actually lack ideas to lures engagement. The problem with corporations today is their fear of change and inability to embrace fundamental demands for sustaining long-term growth. The economy is not stupid; you are ego tripping. Panda needs to reconsider everything what Panda is today!

Thank you to all those that helped with Data and contributed to this article.

Together we strive and thrive, change or die! Change is inevitable! 

 

The Era of Competitiveness is dead! It’s all about Brand Relevance 

The era of competitive brands is over! 

Each category has strong players from first to third. Today is not about competing but all about Brand Relevance.
In the past, I highlighted the difference between brands and commodities using local examples to illustrate my point. Until today, my region remains stuck in the commodity practice. I pray they evolve to brands soon. 

While design and message are part of brands’ fundamental development, the work becomes irrelevant if the strategic approach lacks foundations that is differential and keeps the brand sustainable. Most advert agencies and design studios discuss brand from design thinking while lacking key fundementals. 
Design and communication are important but only in light of a strategic approach which makes simply more than just logos and fancy taglines. 
Brands need to think of being relevant and stop focusing on their competitors’ strong holds. If you are a CEO or CMO of any company and you can’t “Create Your Space”, you’re doomed. 
Being brand relevant is much greater than being different. In fact, relevance delivers values that demonstrate your attributes during the journey. 
Today’s CEOs and CMOs speak of positioning differently, what does that mean? What is the use of positioning differently if the values remain the same?! Rabea Tea is an example of repositioning without evolving, they failed by repositioning to Lipton’s stronghold.

You are the enemy to your  Personal Brand! 

Fear is the enemy of growth and the best friend of remaining into safety. The fear of embracing trial and failure is the self inflected ego, which threathens growth  and nest in false bubble. 


You own your path everything up to fifteen years of age was dictated to you by family, social and school. You never owned your own thoughts and at twenty all your decisions are based on everyone’s opinion and that’s the heart of fear and extremely  threatens  growth. Fear becomes the pivot of all your actions. 
Tradition is tradition but tradition is not growth, librate yourself from one thousand yours old tradition. These traditions served their times not yours, embrace who you are with all your flaws but stand for the values you set no matter what and no matter who. 

To build your personal brand, you need a great fundamental that serves purpose and growth. You need to have the courage, be authentic, emrace your truth, become fearless and believe in yourself. It’s your vision and mission or else you’ll serve others visions and missions. 

If your heart is filled with fear and doubt, you need external assistance before you think on building your personal brand, confidence is sexy and beautiful

Baaghil 

Unconventional 
For more content follow me on LinkedIn search for unconventional Baaghil 

For my video shows, download business Debates from ios and Google play. 

Outdated Marketers 

Unfortunately, I had many discussions with marketing consultants in the region on Linkedin and offline. 
What concerns me, is that most are outdated with today’s changing environment. Many are still caught in the school of Kotler, seventies and eighties, I have great respect to Kotler but different times require different thoughts and if you failed to adjust you became Irrelevant. 


You can’t bring your outdated school of thought and shove it down today’s generations throat, that’s crazy and that’s the current nature. 
My suggestions is update yourself, go read, attend workshops, volunteer for international practice. If you can’t upscale yourself, you can’t help the company that’s close to lose its existence. I also suggest most of you to upgrade your thoughts on brand, it’s minimal or basic knowledge that you possess. 
If you can’t define the terms, then you’ll fail to understand what comes first, second or follows. 
You can’t just use your P&G experience or other multinationals in the region, that’s tactical and hardly any strategic approach which seems obvious for most work  delivered.

Saudi government is unconventional and private sector is conventional. 

Here is a prediction! 
The government in Saudi is developing very fast and hiring top local calibers. On the other hand the private sector, the partner in change is moving at a turtle speed. 



Those who will remain as is, are as good as dead by 2023 


Warning

If you don’t evolve within this coming two to three years with the changing foreign investment policies in the kingdom, you’re as good as history. 

Start with the fundamental change, some need transformation others evolution but if it’s not today, it’s never. 

procrastination, fear and lazy minds are the enemy of change. 

Leadership and love in one basket! 


Unfortunately the definition of leadership in our part of the world is self consumed, coated with envy, greed and exploiting short term opportunities that abuses the rights of generations in our region.
It’s not only management that excel the progress of players and employees but the set culture that serves both the purpose and goal. 
What I just shared here in words, to our management leadership in the region are words to others are light to move forward or bring change. 
If you can’t eradicate the existing mindset in the region across all, no vision will ever come to reality because it takes people to bring change not technology.

Strategy Vs Tactical, all get it wrong!

The reason why many companies go through trial\error and invest so much on tactical because they think tactical is strategy. Once they understand the value of the road map, then they invest in strategy.
Clearly it’s a mindset problem! Change is inevitable 
Case Examples
Apple built on long term strategy with clear vision. Key words are innovation, simplicity, selecting market place and employee collaboration which is the heart of Apple’s culture. Apple stuck to the vision and delivered key missions, which lead Apple to disrupt key industries using technology. On the other hand Microsoft under the previous CEO, felt threatened by Apple, instead of focusing on revisiting their outdated strategy, they resorted to tactical approach & replicated Apple’s great values.
Rabea Tea in Saudi Arabia one of my favorite case studies, we should all learn. 
Rabea Tea did select a market segment but was confused between strategy and tactical, business and brand strategy lead repositioning strategy not marketing. They approached the repositioning strategy with tactical thats why Rabea today depends on tactical spending to move products of the shelves.
majority in the Middle East remain same size after decades in business because they lack strategy or they think tactical is strategy.

Personal Branding vs Personal Brand 

Personal Brand Vs Personal Branding. ( let’s get the basic right first before we parachute to fame)    
Most people even professionals get personal brand and personal branding wrong. I understand that both terms are interchangeable but both play different roles. 
Personal Brand is your core, the values you are, your core truth of who you are. Personal branding is the activity you carry to deliver the values and your story to all stakeholders. Branding is constant and timeless but you must remain authentic. 
I recently saw a post here on Linkedin and someone said “ Your personal branding”, no! The core is your “personal brand” that’s who you are, personal branding is the relationships you create. 
If you plan to search google on the term, read what experts share not wikipedia. Wikipedia relies on volunteers and not subject matter experts. 
Be careful what you read, if we can’t get the basics right, certainly we won’t be able to build a lasting brand.