Saudi Arabia, the United Arab Emirates (UAE), Bahrain, Kuwait, Qatar, and Oman are all desert states. This means that a very large proportion of products are imported, especially in the food sector. This is an interesting situation for exporters from Switzerland because the Gulf States are not only interested in chocolate and luxury watches, but also machinery, production facilities, and know-how from Switzerland. Swiss companies are ideally positioned in all these areas, and entry into these markets is correspondingly promising.
Diversification in Saudi Arabia as an opportunity
With a population of over 35 million, Saudi Arabia is clearly the largest market in the region. The enormous distances in the country pose particular challenges for logistics. Ruedi Büchi sums up the business prospects in Saudi Arabia this way: “The country is well organized and is opening up. There is therefore tremendous demand for new services and products. Since 60% of the population is under 30, the government has launched many initiatives for young people. They are aimed at providing opportunities and jobs for the youth.” Another area of focus is the goal of reducing dependence on oil. Saudi Arabia is one of the world's largest oil exporters, and efforts to diversify are already well underway, according to Büchi.
The UAE, on the other hand, has long acted as a hub for the Gulf region. At the same time, the UAE is striving to become a leader in areas such as digitalization, AI, Internet of Things (IOT), blockchain, and fintech. The smaller countries like Qatar, Kuwait, and Oman can also be very interesting when it comes to Swiss companies entering the market. In Ruedi Büchi’s opinion: “If a company wants to get a foothold in the Arab business world and gain initial experience before going to Saudi Arabia, for example, entering one of the small countries is a good option.”
Luxury goods, pharmaceuticals, special machinery, and e-commerce
Luxury goods are a prominent theme in all Gulf countries. In the UAE, watches, costume jewelry and gold account for over 50%, followed by pharmaceuticals, chemicals, and machinery. The picture is different in Saudi Arabia, Kuwait, and Qatar. In these countries, pharmaceutical exports dominate with a share of up to 40%. Büchi points out that special machinery and the plastics processing industry deserve special attention.
Logistics is also an attractive area for many companies from Switzerland. Büchi comments: “The need for know-how is great, and consulting is in demand at many levels. High priority is given to automation in plastics processing as well as food preparation and packaging. A clear growth area is the cleantech and recycling sector.”
Sales in the e-commerce sector have outpaced growth in all Gulf countries since 2020. In many areas, e-commerce has become an integral part of everyday life and should be considered as an important point when entering the market.
A different culture
“A successful market entry must be done in phases. Interested companies should take it step by step and always start by studying the market,” Büchi is convinced.
Exporters need to know the players in the market and customer behavior, and they must not disregard the cultural framework: “It's a completely different culture. In the food sector, for example, there are halal regulations that must be strictly observed.” Companies must be prepared to adapt their products to market conditions. Because of religious sensitivities, this often starts with the name of a product, but it also significantly affects advertising, which, unlike in Europe, has to get by without exposed skin.
Market analysis for the Gulf States? We would be happy to do it for you.
Reliable local partner – a success factor
According to Ruedi Büchi, a good local partner is indispensable for success. The complexity of the cultural challenge is often underestimated. Communication, in particular, takes a lot of time. If, for example, a customer spontaneously announces a visit to Switzerland, he must be welcomed in any case. “The company has to make sure that the right people are all here then, including the CEO,” Büchi is convinced and, “Arab business partners have to see that they are taken seriously. They always want to be addressed personally. Communicating product or price changes by mail is absolutely out of the question.” Subsidiaries could simplify the time-consuming communication, but they cannot replace the regular, physical presence of company managers on-site, according to Büchi.
Easy customs clearance, complex business partner search
The search for a suitable, dedicated business partner is correspondingly complex. “This is an enormous challenge. S-GE can draw on many years of experience and sector specialists,” Büchi notes. The bureaucracy, on the other hand, is much less complicated. According to Büchi, customs procedures are simple. Since the Gulf States are dependent on imports, they do not put any hurdles in the way of foreign companies, according to Büchi: “Protectionism is practically nonexistent, and certifications are easy to handle. For instance, approval in the Gulf States is no problem for products certified in the EU.”
Assistance from S-GE in the search for business partners: