Comment: KSA Collaborations: Picking the right partner
Martin Venter on how to make the right decision
It’s easier said than done. No matter how much market research you do prior to entering the KSA, there’s always an element of risk and that nagging feeling about whether or not you’ve made the right decision. The usual questions arise — is it a valuable and ripe market? Is there a demand for what I’m selling? Will my customers have enough disposable income to afford my product? What are the barriers to entry? While these are all valid questions, the only one that matters is — will it work?
How then do you ensure that you can build a sustainable business model and successful brand in KSA?
Your journey should start with identifying the right partner within the territory. Who you decide on is crucial and with the endless choices available in KSA, you need to do research to ascertain which company has a similar value proposition to yours. Remember, this is your business and it needs to be handled by professionals who have experience on the ground in your market segment.
So, do you decide on a single person or entity that has sufficient capital, loved eating your burger in New York and wants to own a piece of your brand? Or do you go with one of the plethora of retail or FMCG giants who sell and own everything from milkshakes to the equipment used to make the milkshakes? Though the latter seems like a safer option, I would abandon both options as both parties are likely to see your organisation as another toy in their giant toy box.
As commercial interests continue to expand in the KSA, what is sorely lacking right now is a far too commonly used acronym — TLC. While there’s nothing wrong with the intention to make a quick profit, I would want to partner with an entity that understands and believes in my brand, product or service. I don’t expect them to have the same amount of passion for the business as I do, but they do need to have enough experience in growing a business from the ground up and embody the TLC (Tender Loving Care) ethos before I entrust then with my precious commodity.
The potential consequence of this is scalability and metrics. In order to determine your market penetration and how well your product or service performs, you need to employ focus groups, conduct surveys and compile weekly forecasts with projected store openings. With these structures in place, it then comes back to the time-old question of trust: can I entrust my brand to you and will you do everything in your power to protect my business interests as if it were your own?
As a new entrant, you also need to consider partnering with a company, franchisee or territorial rights owner who will allow you to get your foot across the border safely and with the level of comfort that your brand deserves. In my opinion, this is non-negotiable. In my short time in Saudi Arabia, I have been amazed at how many entrants get this wrong.
Developing and growing a business in the KSA is not for the faint-hearted, but by choosing an informed, passionate and savvy partner, you can make it work.
Be mindful and selective, and do your research before you commit to the collaboration. As Alber Elbaz, the former creative director for Lanvin once said: “I don’t think that you can write music if you don’t know how to play an instrument.”
Martin Venter is a restaurateur and COO of restaurant, FMCG and real estate company, HB Brands, in KSA. Email him at Martin.Venter@hbbrands.com or follow him on Twitter: @Martin_Venter1.