Presentations On The Middle East Market Region


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A Brief Introudction on the Middle East Region & Channel Distribution,Fze

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Presentations On The Middle East Market Region

  1. 1. Presentations on the Middle East Market Region By Manoj Chhabria
  2. 2. Middle-East Market Region <ul><ul><ul><ul><ul><li>Major Markets </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>United Arab Emirates </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Bahrain </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Sultanate of Oman </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Qatar </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Other Countries </li></ul></ul></ul></ul></ul>
  3. 3. United Arab Emirates-UAE <ul><li>U.A.E is a Oil rich Middle Eastern country, comprising of 7 emirates, namely Abu Dhabi , Dubai, Sharjah, Ajman, Umm Al- Quwain, Ras al – Khaimah, and Fujairah. </li></ul><ul><li>The Total Population of UAE is just 6 million of which 80% are expatriates, with 200 Nationalities living here only because it offers tax free environment on salaries and incomes </li></ul><ul><li>A well developed, sophisticated market, exposed to high quality lifestyles, global trends, luxury brands and products due to the huge expatriate population from all over the world. </li></ul><ul><li>Strong Middle Class consumers with higher disposable incomes to spend on food, </li></ul><ul><li>drinks, clothes, watches, Perfumes and Personal care, brands and entertainment. </li></ul><ul><li> (Young, affluent, working Professionals – both Men & Women) </li></ul><ul><li>UAE has an excellent road infrastructure with Skyscrapers having Modern Architecture. </li></ul><ul><li>Business in UAE is currently witnessing a robust economic growth with construction activities at its peak all over the country. </li></ul><ul><li>UAE is a Muslim country of diversity ( People of many religions and cultures live here ) and a land opportunities , it offers a chance to live a decent and modern life style. </li></ul><ul><li>Abu Dhabi is the state capital, while Dubai is the financial & Business capital of UAE. (Termed as one of the most happening Places in the world today) </li></ul><ul><li>Dubai is a well planned city, having a very good air connectivity, most of the major </li></ul><ul><li> Airlines fly into Dubai. It was has a modern Airport (World’s fastest growing & busiest) and a very large duty free space that will be generating over 1 Billion dollars in Revenue this year. </li></ul><ul><li>English is the business language and is widely spoken by the Arab community in UAE. </li></ul>
  4. 4. Key Market Drivers for Alcoholic Beverages <ul><li>Major International Brands - All Major International brands are </li></ul><ul><li>available in this region. In fact, most of the majors have their own </li></ul><ul><li>establishments/ offices in the region, namely Diageo, Pernod Richard, </li></ul><ul><li>Barcardi, LVMH Group, Brown & Forman, Grants, Whyte & Mackay </li></ul><ul><li>and many others etc..etc.. </li></ul><ul><li> Increasing Demand - The market is growing at 30% YOY since the </li></ul><ul><li> last 3 years, A very large number of non Muslim expatriates are </li></ul><ul><li> driving the demand for Alcoholic beverages in this region. </li></ul><ul><li> UAE is currently experiencing an economic boom in commerce </li></ul><ul><li> and Industry. Business travel is at its peak. Tourism is also a key </li></ul><ul><li>driver to this Industry. (Spl. from Russia ,Germany and CIS countries) </li></ul><ul><li> (UAE is becoming increasingly popular as an international hub for </li></ul><ul><li> commerce and tourism ) UAE received 35 Million travelers in the year </li></ul><ul><li> 2007. </li></ul><ul><li>Competition – it is limited 2 major importers & distributors in Dubai, </li></ul><ul><li>(MMI, A & E) while there are others importers & distributors operating in other emirates. (Now a 3 rd license has been issued in Dubai to the Nakheel group).There is a good possibility to tie-up with the Nakheel Group to supply to HORECA ( Their own hotels in Palm Jumeriah Islands & off Premise outlets in the palms.) Currently only 1 hotel i.e. Atlantis is operational on the Palm. </li></ul>
  5. 5. Key Market Drivers for Alcoholic Beverages <ul><ul><ul><li>Home Consumption - There is a huge consumption of Alcoholic </li></ul></ul></ul><ul><li>beverages at home, in- house parties, celebrations and functions </li></ul><ul><li>(Due to very strict Drink & Drive rules) </li></ul><ul><li>Secondly, only 20,000 residents of Dubai have Liquor Permits </li></ul><ul><li>eligible to buy in Dubai while the rest come over to the Northern </li></ul><ul><li>Emirates to stock up their homes. (No liquor permits are required in the Northern Emirates) </li></ul><ul><li> Alcoholic beverages are expensive in Hotels, Bars & Restaurants </li></ul><ul><li>(almost 2.5 times more ) therefore , more than 50% of the expats </li></ul><ul><li>prefer to drink at home, hence off premise trade business is thriving in the Middle East. </li></ul><ul><li> ON Trade V/S off Trade trends - The sales between On-Premise </li></ul><ul><li> trade (HORECA) and Off Premise Trade are quiet neck to neck in </li></ul><ul><li> terms of Volume & Value. (I would put it at 60: 40) </li></ul><ul><li> Specialist Retailers - There are large format stores/ retailers that </li></ul><ul><li> Stock all the major International brands and are spread all across the </li></ul><ul><li> UAE. Namely ADNH stores in Abu Dhabi, Barracuda & Oscars in the </li></ul><ul><li> Northern Emirates. </li></ul>
  6. 6. UAE-Northern Emirates Major Outlets <ul><li>BARRACUDA The Most Premium Retail outlet in the Northern Emirates </li></ul><ul><li>Stocking all the Major International Alcoholic beverage brands. (Excellent range) </li></ul><ul><li>A one stop shopping outlet among all Western Expatriates for their Alcoholic beverage requirements. (Provides a great shopping experience) </li></ul><ul><li>License/ permit are not required for buying from Barracuda – One can buy as much as required. </li></ul><ul><li>BHATIA TRADERS GROUP (BTG ) </li></ul><ul><li>Bhatia Traders has been in the Alcoholic beverage business since 1969. It is one of the leading trading groups in the Alcoholic beverage trade based in the Middle East   </li></ul><ul><li>Bhatia Traders Group's core business is Duty Free Trade operations with DF Shops, Bonded Warehousing, Seamen's Clubs, in Jebel Ali Port, Fujairah Port, Ajman, Umm Al Quwain Port, Sharjah Port & Khofakkan Port. </li></ul><ul><li>Centarus/Spinneys are also the ones who are buyers for the Alcoholic Beverages </li></ul>
  7. 7. Abu Dhabi National Hotels (ADNH) Abu Dhabi <ul><li>ADNH is a leading hospitality group based in Abu Dhabi. With hotels being </li></ul><ul><li>their flagship ventures, their other activities cover all sectors of the leisure </li></ul><ul><li>& hospitality industry which include ownership and management of hotels, </li></ul><ul><li>catering, Liquor stores, transportation and tourism operations. </li></ul><ul><li>ADNH owns 5 Five star hotels in Abu Dhabi and Al Ain including the Hilton </li></ul><ul><li>in Abu Dhabi and Al Ain, Sheraton hotel & resort and the Le Meridien </li></ul><ul><li>Abu Dhabi. It also owns and manages other 9 hotels in UAE. ADHN is </li></ul><ul><li>further expanding its hotel operations with opening of JW Marriott , Sofitel </li></ul><ul><li>Jumeriah beach resort in Dubai in 2009. </li></ul><ul><li>ADNH has 5 Liquor stores in Abu Dhabi. </li></ul>
  8. 8. BHARAIN & OMAN MARKETS <ul><li>Kingdom of Bahrain </li></ul><ul><li>Bahrain is a Constitutional monarchy with a population of 1 million People. </li></ul><ul><li>Surrounded by Saudi Arabia on one side and Qatar to the south. </li></ul><ul><li>Manama is the capital city , predominantly built on reclaimed land which hosts the </li></ul><ul><li>headquarters for U.S. Naval Forces Central Command and U.S Fifth Fleet.. The </li></ul><ul><li>concentration of restaurants, bars and nightlife make Manama a magnet for </li></ul><ul><li>U.S. service members and Saudi weekend visitors. </li></ul><ul><li>Bahrain has the fastest growing economy in the Arab world , it combines its highly </li></ul><ul><li>developed modern infrastructure with a Gulf Identity , it is home to multinational </li></ul><ul><li>firms and is generally more liberal than its neighbors </li></ul><ul><li>Bahrain is the smallest country in the Middle East with a total Area of 665 Square </li></ul><ul><li>Kilometers, but it has around twenty 5 Star hotels and around 10 liquor Retail </li></ul><ul><li>outlets/ retailers. There is a large Liquor drinking population mostly Expatriates. </li></ul><ul><li> </li></ul><ul><li>Sultanate of Oman </li></ul><ul><li>Oman borders UAE. Muscat is the capital of Oman , the largest and the most </li></ul><ul><li>populous city in Oman. Muscat has a total population of 1 Million of which 60% are </li></ul><ul><li>local Omanis while 40% are expatriates. Oman economy is dominated by trade, </li></ul><ul><li>Petroleum and porting. </li></ul><ul><li> Muscat has around fifteen 5 Star hotels and around 7 liquor Retail outlets/ retailers. </li></ul><ul><li>There is a large Liquor drinking population mostly expatriates. </li></ul><ul><li>  </li></ul>
  9. 9. Duty Free Market / Airline Business <ul><li>Duty Free Market </li></ul><ul><li>Sales of Alcoholic beverages are quiet high in the various duty free outlets </li></ul><ul><li>in this region. Duty free ‘s mainly entertain 1 Liter bottles for sales in </li></ul><ul><li>all their outlets. So with the 1 liter bottles ready for sale , we should tap </li></ul><ul><li>all the duty free ’s namely Dubai Duty free, Abu Dhabi duty free, </li></ul><ul><li>Sharjah duty free, Bahrain duty free, Muscat duty free to name a </li></ul><ul><li> few….. </li></ul><ul><li>Airline Business </li></ul><ul><li>There are 2 major Airlines based in UAE , namely </li></ul><ul><li>Emirates Airlines based in Dubai and Etihad Airways based in Abu Dhabi. </li></ul><ul><li>ADNH supplies Spirits , wines & beer to Etihad Airways </li></ul>
  10. 10. Market Overview – conclusions <ul><li>Ramadan - is the holy month of fasting & abstinence, it last for 30 days and </li></ul><ul><li>comes once a year. This it was in month of September. During that time </li></ul><ul><li>Alcoholic beverage business is very low. </li></ul><ul><li>Alcohol beverage marketing is a tricky business in the Gulf, where most </li></ul><ul><li>countries have severe restrictions on the sale and consumption of alcohol. It’s </li></ul><ul><li>also a booming business, especially in the UAE , where each emirate has its </li></ul><ul><li>own set of rules ranging from relaxed to completely dry. Sharjah is a dry. </li></ul><ul><li>Booze marketers are understandably keen to capitalize on rising alcohol </li></ul><ul><li>consumption and marketing budgets. But they’re operating in uncharted </li></ul><ul><li>waters, legally. With no written guidelines beyond a vague remit for bidding </li></ul><ul><li>them to “openly” advertise alcohol, they are mainly restricted to pushing their </li></ul><ul><li>products at point of sale. But they’ve also developed some tactics to promote </li></ul><ul><li>their products more aggressively – and overtly. </li></ul><ul><li>Some industry professionals claim they feel freer than ever to push their </li></ul><ul><li>brands. “I wouldn’t say the line between what’s acceptable and what’s not has </li></ul><ul><li>become blurrier. There are restrictions and we stick to them. The general </li></ul><ul><li>feeling is that restrictions are easing up, but it’s difficult to say.”  </li></ul><ul><li>“ This market is a big grey area,” The fact is: Nobody really knows what’s </li></ul><ul><li>allowed and what’s not. </li></ul><ul><li>Sophisticated branding is playing an increasingly important role in the </li></ul><ul><li>marketing of alcoholic beverages in this part of the world too. </li></ul><ul><li>  </li></ul><ul><li>Market outlook is bright & we will tap all the op portunities available in this </li></ul><ul><li>Region. </li></ul>
  11. 11. Information on Drink Operations <ul><li>Do we have you own import facility? </li></ul><ul><li>Yes! We do have our own Import and warehousing facilities in Jebel Ali, Ajman and Umm Al Quwain where we import and stock all the branded spirits/beers/wines which is supplied to our Retail Shops, other retailers and whole sellers in UAE. </li></ul><ul><li>Ajman Warehouse we use for the Oscars Grand Cellar’s Retail Shop </li></ul><ul><li>Jebel Ali warehouse we use it for Channel Distribution, Fze </li></ul><ul><li>We also do regular exports to India, Africa, and Pakistan. We also plan to shift those stocks for the Local Market Distribution. </li></ul><ul><li>How does the sales structure of our business work? Sub distribution? Direct supply? </li></ul><ul><li>We have 2 Types of Business Operations </li></ul><ul><li>A} Retail Shops </li></ul><ul><li>B} Import-Export & Local Sales {UAE}. </li></ul>
  12. 12. Information on Drink Operations <ul><li>Retail-Oscars Grand Cellars {Sister Concern Company} </li></ul><ul><li>We have 2 Retail Shops in Ajman & 1 in Umm alQuwain. (Totally 3) </li></ul><ul><li>We import global brands and sell them in our Shops and also offer them to other retailers and whole sellers. We do work on a Marketing Budget/Promotional Materials & Schemes which are passed on to the end consumers. </li></ul><ul><li>Since we are the only ones Licensed to operate the Retail Shops in Ajman, we take the full advantage of this and do the maximum Sales. </li></ul><ul><li>Roughly we sell around 10 Containers on Beer Mix/1 Container of the Alco Pops/Ciders/10 Containers Mix white Spirits/6-7 Containers of Dark Spirits in a month. </li></ul><ul><li>Import-Export-Channel Distribution, Fze </li></ul><ul><li>Channel Distribution, FZE is 5 year Old Company. It’s purely involved in Import-Export Business. We buy stocks locally as well as globally all the branded spirits/beers and re-export them to countries like India , Africa and Pakistan & also sell the Duty Paid Stocks to the Whole Sellers in the UAE Market. </li></ul><ul><li>Here we sell around 4 to 5 Containers in a month. </li></ul>
  13. 13. Information on Drink Operations <ul><li>Sales force </li></ul><ul><li>We have a Sales force of 4 People working for Channel Distribution FZE catering to the UAE market. </li></ul><ul><li>Marketing legislations </li></ul><ul><li>The Government does not allow the Companies to advertise their brands in the News Papers or Mass Media. But however promotions within the Premises where the Alcoholic beverages are sold such as On-Trade & Off-Trade are allowed. </li></ul><ul><li>Size of the Company and turnover </li></ul><ul><li>We have a turn over of 4,918,032 USD $ {Channel Distribution, Fze} annually. </li></ul><ul><li>Oscar’s I haven’t mentioned, as it’s a sister concern company but involved in the Alcoholic Beverages Business. We do source brands for them in terms of spirits/beers/Alco Pops. </li></ul>
  14. 14. Thank You for your Time & Effort <ul><li>Manoj Chhabria . </li></ul>