Maximising local opportunities amidst global uncertainty
We might not want to hear it, but there’s a global recession gathering pace in 2023. According to the International Monetary Fund (IMF), one-third of the global economy will feel the pinch of rising prices and higher interest rates. Covid-19 and the war in Ukraine are key drivers behind this period of economic uncertainty, and the longer they continue the more negative impact they will have on the cost of living across the world.
The United Arab Emirates and Saudi Arabia are expected to be largely sheltered from the worst of a global recession. This is thanks in part to the swift responses from each country’s governments, the demand for, and rising costs of oil and a robust tourism sector. The adaptability that the UAE and Saudi have shown is an example that SMEs can follow to ensure their futures are safe. However, it’s still wise to expect headwinds, reassessing how best to grow during these troubling times.
Businesses that are unable, or even unwilling, to change will be hit the hardest. But those that can think laterally and stay flexible will be able to thrive. Small internal changes can have a big impact. Improving collection methods, making changes to marketing activities, reducing costs and optimising processes will help to increase profits and cash flow. There are a number of ways UAE SMEs can navigate this global recession and come out the other side of it in a positive way.
According to DataReportal’s 2023 report, 99 per cent of UAE residents use the internet. In fact, the UAE ranks second in terms of internet utilisation globally. It’s a number that has increased significantly during the pandemic that forced people indoors and made them more reliant on technology. There’s now an expectation of a frictionless experience whenever a potential customer finds your digital channels. It’s no longer enough to simply have a website.
The opportunity now is to get back to basics. Ask yourself how digital your business really is. Could your website benefit from a revamp? Do you have a CRM that can track people throughout the customer journey? How active are you on social media? Making small, yet important changes to your digital output can keep your business relevant and breathe new life into your operations. Speaking of which…
Use AI to improve efficiency
Don’t fear artificial intelligence (AI). Despite the doomsayers predicting it will take away entire business sectors, we’re years away from it becoming 100% accurate. Chatbots such as OpenAI’s ChatGPT, Jasper and Google’s upcoming Bard will become part of everyday life in the coming months. They can save on brainstorming time by, amongst other things, helping you plan events, write basic copy and suggest marketing activities.
Most importantly, trying to understand AI during its infancy will help you better understand how to use it for your business in the future. Those behind the technology curve will be left behind.
Harness the tourism boom
The UAE’s tourism sector has proved to be incredibly robust as international travellers in their millions have poured into the country on holiday. With the right methods, tapping this ecosystem can help to support growth in a number of industries.
For example, small businesses that have the ability to supply consumables in bulk should reach out to hotels, restaurants and cafes that are currently dealing with high footfall. There’s also no better time than now to create a pop-up stall to showcase your wares in one of the region’s many tourist areas.
Understand the games industry
The video games industry is the biggest form of entertainment in the world. According to Statista, the global value will be worth an enormous $365.60bn in 2023, which is more than the movie and music industries combined. In the GCC alone, it’s worth $7bn. But despite the huge numbers, the video games industry is largely untapped as a revenue stream in the Middle East.
It’s an ideal sector for startups and established SMEs to dive into. There’s a younger generation that is completely immersed in gaming culture - when they’re not playing games, they’re buying items related to them. This means there’s an opportunity to create brand recognition and loyalty that lasts a very long time. But there are also millions of adult gamers that can be targeted with the right type of products and marketing.
Put Saudi Arabia into your business plans
The Kingdom is set to become the fastest-growing economy in the world in 2023. It has a population of 36 million people and is a short 90-minute flight away from the UAE. Any business that wants to stay afloat in 2023 and beyond should be preparing ways to take advantage of this situation. Whether it’s creating a Saudi portal on your e-commerce platform or stretching your delivery zone to reach Riyadh and beyond, there’s a lucrative new market to explore.
About the author
Rayhan Aleem, Founder and Managing Partner, Alpha Pro Partners, has over 20 years’ accounting and finance experience from the UK, UAE, and KSA. After several years working in private equity and hedge funds in various accounting, finance management, and tax roles, he founded Alpha Pro Partners in London. Rayhan has a passion for helping small business owners to achieve their financial goals, combined with a keen interest in technology and process improvement. A certified chartered accountant, he has an Executive MBA from the University of Westminster and a degree in Biochemistry from Queen Mary University of London.