If You Want To Kick The Crap Out Of The US, Go After The Arabic Market
I spent some time in China earlier this year talking with online games companies and looking at the market in more detail. Blunt assessment: if you’re not Chinese, you can forget about competing in their domestic market.
On the way back, I passed through the Middle East. Wow. If you’re running a consumer Internet business, you need to jump on the next Emirates flight now. Let me describe the market:
- Almost 350M people with almost 65%% under the age of 30.
- Limited local venture capital market (hard to believe but true) means that there’s an unusual lack of local content and services.
- Growing demand for consumer applications and services (see the graph below)
- English is far more prevalent and accepted as a means of doing business than in many Asian countries
- Large percentage of the population which has to stay at home in several countries e.g. Saudi Arabia
The most well known Internet success story in the Middle East has been Samih Toucan’s Maktoob acquisition by Yahoo in 2009. His Jabbar group is now involved in many of the major online initiatives out there. Companies to watch include Cobone.com (a Groupon clone which is apparently killing Groupon), Souq.com (eBay/Amazon), Quirkat (online gaming) and Sukar (private buying club).
Feel this post is a little light on local players? That’s exactly what I thought when I was speaking with people there. Many of the companies above have literally had to build their own ecommerce infrastructure. In some countries, the dominant payment method is cash on delivery. That’s an interesting twist on a virtual items model. Billing aggregation didn’t exist until very recently and anecdotally, the use of credit cards online is considered a little risky.
In short, the Middle East feels like a mainstream consumer Internet market 5-7 years ago.
The obvious elephant in the corner is the political unrest across the region. The consensus amongst everyone I spoke with is that it will certainly pass and in five years time, MENA (Middle East and North Africa) will be the new China.
Dave McClure summed it up nicely at Startup100 last night: “If you want to kick the crap out of the US, go after the Arabic market.”
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See Also:
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