LAS VEGAS, 16 January 2007 — The Las Vegas Convention Center (LVCC) was the main venue for the 2007 International CES but over at the Sands Expo and Convention Center were the 2007 International CES exhibition halls where the focus was on emerging technologies. The exhibitors at the Sands Expo didn’t have fancy, expensive stands. What they were showing off though were some exciting new technologies, many on display to the public for the first time.
These exhibitors were mostly smaller companies; a good number of them from outside the United States. Nearly every one of these companies was extremely interested in doing business in Saudi Arabia, but they didn’t know how to start. It was painful to note that even though the 2007 International CES is the world’s largest technology trade show, no one from the Saudi Arabian General Investment Authority (SAGIA) or the Saudi Chambers of Commerce and Industry was on the show floor handing out information about doing business in the Kingdom.
Jim Edmiston, senior vice president, Sales and Product Development, Celestron, was very familiar with the advantages of doing business in Saudi Arabia. He loves the Kingdom’s demographics and also understands that with our use of the Hijrah calendar, astronomy is a popular hobby.
“We do have a distributor in Dubai and they want to be appointed for the Saudi market too,” Edmiston said. “We have discouraged them. We want someone who can support the Saudi market well. That means finding a distributor that has a good history of representing high-tech devices in Saudi Arabia. We would want any distributor we would appoint to offer the same high-quality sales and after-sales service that we offer in the United States in order to protect our brand image.”
Celestron has been approached by a planetarium in Saudi Arabia to be appointed as a distributor for their devices but Celestron’s management felt that the planetarium’s resources were inadequate to create a successful partnership. Celestron had attempted to contact one of the chambers of commerce in the Kingdom with no success. So right now they are not marketing their award-winning products to the Saudi market.
Another company that has had a discouraging experience in the Kingdom is Electric-Spin Corporation. The company’s CEO, Anees Munshi, a Muslim, came to Saudi Arabia last year for reasons of faith. At the same time, he had hoped to look into getting a distributor for his Golf Launchpad home golf simulators. The simulators can be used indoors or outdoors, even in high temperature conditions.
Munshi has relatives in the Kingdom and they advised him about the craze for golf in the Middle East. After completing the religious rituals, Munshi met with a few sporting goods outlets but none seemed to be the best fit. He found it difficult as well to get background information on the various companies who wanted to represent the product in the Kingdom and negotiations in regards to the distribution deal seemed to go painfully slow. Additionally, there was no place he could turn to discuss general points in regards to the legalities and other requirements of importing and selling products in the Kingdom. In the end, he left Saudi Arabia without a distribution deal in place.
“With the interest in golf in Saudi Arabia, we thought that it would be easy to set up a distributorship locally, but it wasn’t,” Munshi said. “Golf Launchpad can provide tremendous cardiovascular exercise and is very entertaining as well, so we thought there would be good demand for the product, but we just never gained the confidence needed to sign with a Saudi partner.”
The company currently sells directly to consumers in Saudi Arabia who purchase the Golf Launchpad online. The need to ship each Golf Launchpad individually adds costs, time and complexity to a process that would be much simpler if Saudi consumers could just go out and purchase the simulator locally.
It is not only well-established consumer electronics firms that want to do business in the Kingdom. Bazoo Global set up operation just two years ago. The tech-based toy company creates USB entertainment products. These are items that plug into a USB port on any computer and help enliven the surrounding environment. At CES, Bazoo Global was showing off USB lamps, webcams, cell phone chargers and other USB enabled toys that can help make your workplace or study space a bit happier.
“We started out by creating a number of products that are based on licensed characters that have international appeal, such as Snoopy and Hello Kitty,” said Daniel A. Chernek, founder and CEO of Bazoo Global. “We know that to be a hit in markets worldwide it’s necessary to be relevant. That means creating products with local appeal. We would be really interested in developing products based on cartoon characters that are well-known in Saudi Arabia and other Middle Eastern markets but we don’t even know how to begin.”
Chernek’s company is new but he has considerable experience already in the toy industry. He holds a master’s degree in industrial design from the Pratt Institute and previously worked as an entry-level toy designer at Mattel, before moving on to stints with Tyco and Basic Fun. He pointed out that it would be quite straight forward to modify Bazoo Global’s products to fit licensed characters popular in the Arab world but he simply doesn’t have a clue as to how to go about selecting the right characters, localizing the instruction manuals and then appointing Middle East distributors.
Speaking with dozens of exhibitors at the 2007 International CES it is clear that whatever efforts are under way to attract business and foreign investment to Saudi Arabia, not enough is being done. It is great to look for the billion-riyal foreign direct investment projects, but apparently we are dropping the ball when it comes to attracting smaller firms. Since, in general, any successfully diversified economy depends on a foundation of small businesses, it is far from pleasant to learn about the difficulties that small consumer electronics firms are facing in coming to the Kingdom.
Many small companies at the 2007 International CES were well aware of how to set up a firm or do business in Dubai, so it is not that these firms are ignorant of what it takes to succeed in the global market place. Clearly the problem is squarely with the resources, or lack of resources that the Kingdom is putting forward to attract business and investment to this market, and that needs to change immediately.
(Comments to: [email protected].)
