GCP Project Clementoni Final

Date: 14 July 2016
To: Clementoni SPA
Zona Industriale Fontenoce
62019 Recanati (MC) – Italy
Dear Clementoni SPA:
Subject:: Market Expansion Analysis
The attached business report, written for Clementoni SPA, analyzes the market expansion
of Clementoni within the countries of United Arab Emirates, Saudi Arabia, and Kuwait.
The business report provides information on the traditional toy industry, a competitor
analysis within the toy industry, a market analysis based upon the three Middle Eastern
countries, and suggestions based upon results of extensive secondary research. These
insights are offered with the purpose of informing Clementoni SPA of the attractiveness
and likely success of market expansion into the Middle East, thus showing the possible
outcomes and potential market share for each market expansion.
Through extensive secondary research, the following are included within the report based
off of entry into the three Middle Eastern countries:
• Competitor Analysis, Distribution Channels, and How often Mother’s
Shop Online
• Age Groups, Average Per Capita Spending, and Main Toy Magazines
• Hottest Licenses and Television Commercial Styles
Furthermore, include in this report is an analysis of the microeconomic conditions, an
analysis of the macroeconomic conditions, and a SWOT analysis (strengths and
weaknesses of the company, threats and opportunities given by the communication system)
obtained from secondary research.
We would like to thank Dr. Lou, Dr. Young, and Dr. Lorenzo for their assistance and
availability during the construction of the report. We would also like to thank Clementoni
SPA for the opportunity to construct and present the report. Additionally, we would be
more than happy to answer any questions or concerns that you may have. Again, we thank
you for this opportunity, we look forward to hearing back from you, and continuing a
relationship within the future.
Sincerely,
Michael Cimperman
Elena Flocco
Cristina Gasparrini
Ross Reid
Stefania Ronca

Date: 14 July 2016
Prepared for:
Clementoni SPA
Flavia Verducci
Matteo Sarnari
Prepared by:
Michael Cimperman
Elena Flocco
Cristina Gasparrini
Ross Reid
Stefania Ronca

Executive Summary
This report takes an in-depth look at Clementoni SPA, a company with over fifty years of
experience, and it’s potential of gaining a higher market share within the Middle East. To
start, we believe it was essential to not only analyze the industry as a whole, but to also
analyze the macroeconomic conditions and microeconomic conditions. The industry
analysis covers traditional toy companies and the current outlook of the industry. Next, the
macroeconomic conditions takes into account a macroeconomic tool, PESTLE. Due to the
complexity of the report, three separate countries are analyzed (Saudi Arabia, Kuwait, and
the United Arab Emirates), as it was essential to cover all macroeconomic conditions for
each country. To conclude the industry analysis, the report takes into account a
microeconomic tool, Porter’s Five Forces.
Secondly, our report goes in-depth into the client’s specifics requests. The results from
extensive research on the client’s requests not only assist Clementoni SPA on how to
approach the market within the Middle East, but also provide data on how to establish a
significant market share within each country. The following provides key points on each
requests:
• Competitor Analysis: comparison of the most similar companies within the
industry and a comparison to the market share leaders within the industry
• Distribution Channels: data on distribution channels in the Middle East
• How often Mothers Shop Online: data concluding how often mothers shop
within each country and how much they are likely to spend
• Age Groups: data concluding the population percentage of the separate age
groups, thus allowing for more specific distribution of toy categories
• Average Per Capita Spending: information provided on the average disposable
income and per capita spending on toys for each country
• Main Toy Magazines: trends, features, and advertisements for magazines
• Hottest Licenses: information provided on licensing within the Middle East and
how to effectively create a market share through licensing
• Television Commercial Style: data provided on successful commercials in the
Middle East and how traditional holidays can be utilized
Finally, to conclude the report, suggestions based off of extensive secondary research are
made for Saudi Arabia, Kuwait, and the United Arab Emirates. A decision matrix based off
of the results of the secondary data is taken into account, thus showing which country has
the highest potential to establish a significant market share. One can view the final
aggregate results of the decision matric below, showing the United Arab Emirates with the
highest potential.
UAE Kuwait Saudi Arabia
3.025 2.05 2.7

Table of Contents
Introduction 1
Industry Overview 2
Macroeconomic Conditons 2-4
Microeconomic Conditions 5
Client Requests (6-26)
Suggestions 24-25
Competitor Analysis 6-8
Distribution Channels 9-13
Mother’s Online Shopping 14
Age Groups 15
Main Toy Magazines 17-19
Average Pro Capita Spending 16
Hottest Licenses 20
Television Commercial Styles 21-23
Conclusion 26

Introduction
Industry
Analysis
Client
Requests
Suggestions Conclusion
Introduction
1
In 1963, Clementoni SPA was founded by Mario Clementoni. Clementoni’s value
proposition is that “help children learn while having fun, foster their growth using the
language they know best and what comes to them naturally: playing”. In the early stages of
the company’s start, Mario Clementoni stressed continuous product innovation, thus
expanding the amount of total toys produced by the company. Currently, all toy products
are conceived, designed, and developed in the Recanati headquarters. Furthermore, the toy
products range for children aged zero months to twelve years and older. Additionally, the
company features lines like Baby Clementoni, Disney Baby and Clemmy lines, the famous
Sapientino brand, Science&Play, Art Attack, and Crazy Chic.
0
1
2
3
4
5
6
7
8
2015 2016 2017 2018 2019
Middle East Economic Conditions
GDP Inflation Rate Vol. of Imported Goods
The company currently operates in the majority of countries around the entire world and is
made up of fifty young researchers. Clementoni toys can be designed and realized in
twenty seven different languages to help expand into other markets around the world.
Additionally, the Clementoni toys are located in three different continents: including
Europe, Africa, and Asia. Clementoni SPA is looking to expand their market into the
Middle East with the hopes of establishing a major market share. Clementoni SPA is
looking to expand into Kuwait, Saudi Arabia, and the United Arab Emirates due to the high
potential of the countries for the traditional toy industry.

Introduction
Industry
Analysis
Client
Requests
Industry Analysis Overview
2
The traditional toy industry comprises
companies that manufacture dolls, doll
accessories, action figures, toys, games, and
hobby kits. The market is driven by a wealthy
consumer base in these countries that make
up most of the market. Furthermore, the toy
industry is based off of discretionary
spending. Therefore, the amount of money a
consumer currently has and the optimism of
the consumer on economic decisions impacts
spending within the industry.
The toy industry in Kuwait, the United Arab
Emirates, and Saudi Arabia have witnessed
strong growth within the past years; in 2014
alone it witnessed double-digit growth in
revenue.
From 2008 to 2014, the traditional toy market
alone jumped from 8 percent to 12 percent.
Within the United Arab Emirates, traditional
toys and games are expected to go from €313
million in 2014 to €430 million by 2019.
Strong international corporations such as
Mattel, Hasbro, and LEGO dominate the
market in Middle East’s toy market.
Clementoni currently has one branch in the
Middle East, located in Turkey. Clementoni
has already established distribution channels
within the Middle East, including Safari
House and Simba toys for example.
Macroeconomic Conditions
PESTLE (a macroeconomic tool) is designed to be a framework that attempts to analyze
macro-environmental factors used in the environmental scanning component of strategic
management. Below, one can find information based upon PESTLE (political, economic,
social, technology, legal, and environmental) factors.
The term "Middle East" is generally recognized
today to refer to a region that stretches from the
Atlantic Ocean in the west to Afghanistan in the
east, a distance of approximately 5,600
kilometres. It encompasses four distinct culture
areas: Arab, Turkish, Iranian, and the newly
evolved Israeli culture.
Islam is viewed by many Muslims not simply
as a religion, but also as a cultural identity and
heritage. Justice is administered according
to Sharia law and in recent years, there has
been a rise in Islamist activism, which has
also resulted in Islamist terrorism.
Religion in the Middle East
Muslim Christians Others

Introduction
Industry
Analysis
Client
Requests
Macroeconomic Conditions (cont.)
3
-5
0
5
10
15
20
2011 2012 2013 2014
Annual%Growth
Imports of Goods and Services
United Arab Emirates Saudi Arabia Kuwait
-10
0
10
20
30
2011 2012 2013 2014
Annual%Growth
Exports of Goods and Services
The Middle East is rich in
petroleum, as proven oil reserves of
Saudi Arabia are known to be 25%
of the world's total; those of Iraq,
Iran, and Kuwait constitute another
25%. Overall, it is estimated that
more than 62% of all proven oil
reserves are found in the Middle
East and North Africa. Furthermore,
Middle Eastern oil is both cheap to
produce and of high quality.
The richest and most open countries
in the Middle East are the United
Arab Emirates, Kuwait and Saudi
Arabia. They have developed
technologies, a young population,
and they are expecting to grow in
the next decades. Costs and labour
are competitive, resources are
available, and tourism are steadily
increasing alongside liberalisation.
These three countries seem to be the haven for those who want to open a new business, but it
is not so easy as we can think. For example, from the legal point of view, according to
Kuwaiti Commercial Laws, no foreign company can establish a branch or do any commercial
activity in the country, without doing it a through local agent or distributor. Joint-venture
business structure is often limited in Kuwait, as well. In most cases, Kuwaiti National, who is
obligatory one side of a partnership, should have not less than 51% of total capital, and more
than 60% for banks, investment and insurance companies
In order to settle your own business in the United Arab Emirates you need to find a local
partner who will detain 51% of the company. As a profitable alternative, Dubai government
encourages entrepreneurship through free zones areas, which allows the 100% ownership of
the foreign investor. These districts offer exemption from taxes and customs duties, plus no
levy on exports/imports. Other trading benefits include no restrictions on recruitment or
sponsorship. Additionally, there are 38 free zones nowadays.

Introduction
Industry
Analysis
Client
Requests
Macroeconomic Conditions (cont.)
4
In Saudi Arabia, one of the key
assumptions built into both the
Government Tenders and
Procurement Law is the
requirement that companies seek to
establish themselves in the KSA and
provide goods and services through
a local establishment. While many
foreign companies prefer to provide
goods and services from offshore,
failure to establish a legitimate
presence in the KSA will bar
companies from directly meeting with their clients and customers, and will restrict their
ability to operate effectively and receive payments.
Moreover, social and religion are key aspects to respect in order to gain trust and be
successful in the Middle East. The Islamic faith places great emphasis on behaviors such as
generosity, respect and modesty. Body language is just as important as the spoken word.
Power distance expresses the degree to which the less powerful members of a society accept
and expect that power is distributed unequally. People from Middle East accept a hierarchical
order in which everybody has a place and which needs no further justification. Hierarchy in
an organization is seen as reflecting inherent inequalities and centralization is popular
The masculinity side of this dimension represents a preference in society for achievement,
heroism, assertiveness and material rewards for success. Society at large is more
competitive. In the United Arab Emirates, the role of women in society has evolved
considerably over the years. Today, the economic and social benefits of diversity are
universally recognized and women are viewed as partners in achieving sustainable
development. On the other hand, Saudi Arabia is one of the four countries in the world that
has not granted women the right to vote. Furthermore, it has one of the highest driving ages in
the world at 25 but it does not allow women to drive.
The uncertainty avoidance dimension expresses the degree to which the members of a society
feel uncomfortable with uncertainty and ambiguity. For example, the press is characterized by
its relative independence and openness, but newspaper publishers must have licensees from
the Ministry of Information. Furthermore, publications must be licensed and follow official
guidelines on reporting while foreign publications are censored before distribution.
0
10
20
30
40
50
60
70
%ofGNIpercapita
Cost of Business Start-up Procedures

Introduction
Industry
Analysis
Client
Requests
Microeconomic Conditions
Supplier Power (Low)
5
Rivalry within the Industry (High)
Threat of Substitution (Medium)
Buyer Power (Low)
Threat of New Entrants (Medium)
Porter’s Five Forces (a microeconomic tool) is designed to be a framework that attempts to
analyze the level of competition and business strategy development within a specific industry.
Below, one can find the 5 separate categories of Porter’s Five Forces.
The primary materials used to produce the toy products include paper, plastics, cardboard,
and wooden blocks. Due to the easy access to these products, the power of suppliers is
relatively low. However, companies can increase profitability by purchasing these products
for a lower price than competitors.
There is a multitude of buyers within this industry: including Walmart, Target, and then
many small toy retail companies or shops that sell toy products. There is a many channels of
distribution for companies to sell their products, as well.
The primary factor impacting a company from entering the market or into a new area
(expanding the market into the Middle East for Clementoni) is brand establishment. When
entering into a market up against companies like Mattel and Hasbro, companies must use
effective advertising efforts to establish a market share.
Within the toy industry, companies can often replicate a product, thus allowing for the
threat of substitution to be greater. However, many top companies today have utilized
licensing efforts to reduce the amount of substitution that occurs.
In the traditional toy industry, price differentiation plays a key role in the overall
competition of the industry. The ability for a company to effectively reduce the overall
costs to sell a toy directly impacts the company's overall success. Furthermore, the brand
establishment of a company to the general target audience will affect the profitability of
the company, thus showing the importance of advertisements to the public.

Introduction
Industry
Analysis
Client
Requests
Competitor Analysis
Comparison and Analysis of Companies
6
This report aims to capitalize on the clients requests, thus furthering the possibilities to
establish an effective market share in the United Arab Emirates, Saudi Arabia, and Kuwait.
This report provides reliable information on Competitors, Distribution Channels, How
often Mothers Shop Online for Toys, Age Groups, Average Pro Capita Spending for Toys,
Main Toy Magazines, Hottest Licenses, and Style of Television Commercials within
each country.
Client Requests Overview
Categories Companies
Revenues
worldwide
Overall Market
Share (%) in 2014
Infants -
Educational
talking toys
Mattel Inc.
5072,06 (million
euro dollars)
20 %
Board games Hasbro Inc.
4447,51 (million
euro dollars)
12.5 %
Scientific –
technological toys Lego Group
4.81 (billion euro
dollars)
5.1 %
Electronic
Educational toys Vtech Holdings Ltd.
1.879,8 (million euro
dollars)
3.7 % + 3.0 %
(Leapfrog)
Adults and
children puzzles Ravensburger
358.68 (million euro
dollars) 2013
Not Available
Considering the Clementoni’s most powerful products categories, we have identified
Mattel as the most direct competitor for the infants toys, with the line product branded
Fisher-Price. This company also offers construction and arts and crafts brands, like
Clementoni.
Mattel, Inc. sells its products directly to consumers via its catalog, website, proprietary
retail stores, directly to retailers (including discount and free-standing toy stores, chain
stores, department stores, and other retail outlets), wholesalers, and through agents and
distributors. We have took into account the prices of two similar products of both
companies and we found that Clementoni’s product is cheaper than the Mattel’s one (see
Appendix E).

Introduction
Industry
Analysis
Client
Requests
Competitor Analysis (cont.)
7
We consider Hasbro as a Clementoni’s competitor for the Board Games category. Once
again we have compared two similar products and finding out that the board games of
Hasbro is more expensive than Clementoni’s one (see Appendix F). Hasbro Inc. is now
gaining on rival Mattel Inc. The gap in share performance reflects the diverging paths of
the two largest U.S. toy companies. Hasbro has ties to several strong movie properties,
including Marvel superheroes and Star Wars, while it continues to do well with standbys
like My Little Pony, Play-Doh and Nerf.
For our scientific- technological category, the LEGO Group is our most successful
opponent with a total of worldwide revenues of €4.81 billion. LEGO has already opened
its first LEGO® Certified Store in Kuwait, as it continues to build on the success of the
recent UAE store openings (2014) and expand its portfolio across the Middle East.
Revenues
worldwide
Overall Market
Share (%) in 2014
Board games Hasbro Inc.
4447,51 (million
euro dollars)
12.5 %
Revenues
worldwide
Overall Market
Share (%) in 2014
Scientific –
technological
toys
Lego Group
4.81 (billion euro
dollars)
5.1 %
Mattel, meanwhile, is in the early stage of a turnaround where it is trying to resuscitate
several long-struggling brands like Barbie and Fisher-Price, while also fixing a battered
corporate culture in which a focus on the bottom line hurt creativity. Sales of Barbie fell
19% in the second quarter.
Lego products are already available in the region through retail distributors. The new store
will be not just a new channel for sales, but it will be a new opportunity for Lego in the
region. Through our analysis we have found that Clementoni provides a cheaper product
than the LEGO rival (see Appendix G).

Introduction
Industry
Analysis
Client
Requests
Competitor Analysis (cont.)
8
For the category of adults/children Puzzle, Ravensburger could be considered the main
rival to Clementoni. It owns the hottest licenses in the Middle East area (for example
Disney Frozen and Hello Kitty). Ravensburger, in this case has a price that is almost the
double that of Clementoni’s product (see Appendix I).
We have identified an adversary for the category of Electronic Educational Toys, called
VTech. The company’s most important strengths are the cost competitiveness, due to large
volumes and good prices for raw materials and the continue innovation of products.
VTTech has just completed its acquisition of Leapfrog Enterprises, another leading
developer of educational entertainment for children. Analyzing the differential price we
have found that, in this case, it is very consistent (see Appendix H).
Revenues
worldwide
Overall Market
Share (%) in 2014
Adults and
children puzzles Ravensburger
358.68 (million
euro dollars) 2013
Not Available
Revenues
worldwide
Overall Market
Share (%) in 2014
Electronic
Educational toys Vtech Holdings Ltd.
1.879,8 (million
euro dollars)
3.7 % + 3.0 %
(Leapfrog)
Age
Groups
Scientific-
technology
Electronic
Adults/
Children
Puzzles
Board
Games
Infant
Educational

Introduction
Industry
Analysis
Client
Requests
Distribution Channels
9
Local consumer behaviours and market influences across the world are shaping channel
trends in regional markets, in different directions, and at varying rates. Hypermarkets and
superstores growth is slowing as the sector becomes saturated and as the improvement of
online shopping gains more momentum.
The Middle East is one of the richest and most developing regions in the world, even though
the store remains the retail touch point with the highest frequency. The reason why Middle
Eastern consumers prefer stores include:
 Delivery challenges: In a region with no postcodes, and often no home postal service,
getting items to consumers can be a major headache for businesses.
 The ability to touch, see and try: consumers in the Middle East require less in-store
technologies to make their shopping experience better.
 A preference for face-to-face: Social and cultural dimensions remain important for
Middle Eastern consumers. Subsequently, many Middle Easterners still prefer to buy in
person, where they can negotiate and draw on long-term business relationships; dynamics
which are seldom possible in the same way online.
 No price differential: Online prices in the region are often the same as they are in store,
thereby robbing consumers of a key financial driver for shopping online. As a result,
showrooming - whereby consumers look at items in store and then go home and purchase
the product more cheaply online - tends to happen in reverse in the region.
 Prevalence of cash on delivery: Cash remains the leading method of payment for
e-commerce in the region, due to security concerns, especially with smaller retailers.
This makes ecommerce highly inefficient and no doubt disincentives with entrants.
The GCC region remains largely untapped outside of the United Arab Emirates, which is
considered a mature retail market. In line with established consumer trends, the convenience
and value offered by hypermarkets are expected to create more competition for customers, as
well as opportunities for growth. Majid Al Futtaim Hypermarkets, a joint venture with the
world’s second-largest retailer, Carrefour, launched in the region, as well. Furthermore, as of
2013, the joint venture had a total of 50 hypermarkets and 44 supermarkets across the Middle
East, North Africa and Central Asia, thus establishing their brand name within each counttry.
Cash on
Delivery
Price
Differential
Face v. FaceSenses
Delivery
Challenges

Introduction
Industry
Analysis
Client
Requests
Distribution Channels (cont.)
10
Although there is no requirement for exclusive distributorships, the policy of the Saudi
Ministry of Commerce and Industry is that all arrangements must be exclusive with respect to
either the region or product line. Foreign exporter companies find it favourable to appoint
different agents or distributors to handle each region, specific product lines, or services.
Saudi Arabia is the largest consumer market in the GGC countries, characterised by a high-
level of disposable income. The large share of the population aged under 25 increases the
demand for a wide range of consumer goods and products.
Saudi Arabia
The main types of outlet in Saudi Arabia include:
 Hypermarkets: selling a wide range of products under one roof, ranging from grocery to
general merchandise (ex. Giant, Hyper Panda)
 Supermarkets: large scale retail shops operating at lower costs, selling at lower price;
and offering a wide variety of consumer goods of regular use such as food items. (ex.
Rammah, Supermarket, Carrefour, Tamimi Markets, Giant Stores, Al Raya)
 Department Store: a retail establishment which specialises in selling a wide range of
products without a single predominant merchandise line. Department stores usually sell
products including apparel, furniture, appliances, electronics, and additionally select
other lines of products such as paint, hardware, toiletries, cosmetics, photographic
equipment, jewelery, toys, and sporting goods.
(ex. Bin Dawood, Harvey Nichols, Saks Fifth Avenue)
 Shopping Malls: (ex. Khurais Plaza, Riyadh Sahara Mall, Al-Rashid Mall)
 Specialised Store: (ex. Paris Gallery)
SAR
million
2010 2011 2012 2013 2014 2015
Store-
based
Retailing
249,221.1 277,661.0 309,409.2 346,911.8 390,047.6 437,285.2
Non-Store
Retailing
2,152.3 2,482.4 2,955.2 3,762.7 4,705.8 5,964.0
Retailing 251,373.4 280,143.4 312,364.4 350,674.5 394,753.4 443,249.3
Sales in Retailing by Store-based vs Non-Store: Value 2010-2015
To see Retailing GBO Company Shares: % Value 2013-2015, see Appendix L

Introduction
Industry
Analysis
Client
Requests
11
The most common selling method is to market products through local commercial agents.
Multiple firms choose a different distributor/commercial agent in each emirate. The use of
franchising is rapidly expanding, as well. Supermarkets have the largest market share in the
field of distribution with 49.2% of sales. The market leaders are Carrefour and LuLu. They
share bulk sales which are responsible for 28.3% of the market share. Shopping malls come in
third with 6%, then fairs and exhibitions with 1.5%, and finally specialised stores with 0.2%.
E-commerce is worth about €3 billion in all of the member countries of the Gulf Cooperation
Council. About 72% of the population in UAE are making (or have made at least one or two)
transactions online.
United Arab Emirates
The main types of outlet in United Arab Emirates are
 Traditional Boutiques: souk stalls which are Popular with lower-income customers.
Shopping Centres: have witnessed growth with the growing wealth of the country and
the development of tourism (ex. Abu Dhabi Mall, Mall of the Emirates, Al Ghurair City)
 Specialised Shops: offer luxury products in the area of gastronomy, alcohol, garments,
fashion accessories, watches, etc.
 Multi-Product and Multi-Brand: (ex. Salam Studios, Jashanmal)
 Shop in Shop: large department stores which bring together several luxury product
brands in the same area, with a dedicated location for each brand.(ex. Paris Gallery)
 Hotel Boutiques: specialised in luxury products and monopolised by some agent-
importers who have signed exclusive contracts with hotels.
 Supermarkets: Carrefour and Casino dominate the sector
Sales in Retailing by Store-based vs Non-Store: Value 2010-2015
AED
million
2010 2011 2012 2013 2014 2015
Store-
based
Retailing
128,505.4 136,323.8 143,870.3 153,368.0 166,178.2 179,219.4
Non-Store
Retailing
1,227.7 1,375.8 1,659.8 2,129.2 2,815.3 3,365.7
Retailing 129,733.1 137,699.6 145,530.1 155,497.3 168,993.5 182,585.1
To see Retailing GBO Company Shares: Value 2013-2015, see Appendix M
To see Distribution of Traditional Toys and Games by Format in UAE: % Value 2012-2014, see
Appendix N

Introduction
Industry
Analysis
Client
Requests
12
International firms wishing to enter the Kuwaiti market are legally obligated to form a
partnership with a local guarantor. As such, franchising is a common method for overseas
brands to gain entry to the Kuwaiti market. The Azadea Group fit Clementoni’s need
effeiceintly because they have partnership with a lot of western and multinational brands and
they serve a store selling toys, Virgin Megastore.
Kuwait
In 1983, the Alshaya Group launched its first franchise operation with the Mothercare brand
in Kuwait, which was also Mothercare's first international store. This marked a partnership
between Alshaya and Mothercare which now delivers the brand to the Middle East.
Mothercare currently has 34 stores located in Kuwait, as well.
Kuwait welcomed American mall culture, embracing it as a confluence of retail and leisure,
yet the country has been slower to take on modern super- and hypermarkets. This is now
changing however, as Kuwait is seeing the rapid rise of hypermarket retail, representing the
sector’s most dynamic vector.
Shopping is a major leisure activity in Kuwait. Furthermore, the malls represent recreation
and social spaces in addition to shopping opportunities. In addition to malls, hypermarket is
an increasingly popular shopping choice in Kuwait. The main chains in Kuwait are the
French firms Carrefour and Giant. These major firms are joined by Lulu (part of EMKE
Group, an Emirati firm), and local players the Sultan Group and the Union of Co-operative
Societies of Kuwait.
Traditional retailers such as small neighbourhood shops, markets and cooperative societies
continue to account for a fairly large proportion of retail trade in Kuwait. This is partly
because they are smaller and nearer to home for many people, and are thereby able to
compete on the basis of convenience. However, this preference for convenience on the part of
the consumer may tempt big retail groups into introducing smaller-format stores, as has
occurred in a number of developed markets over the past few years.
Online shopping is becoming increasingly popular in Kuwait, according to the 2014 Online
Shopping Behaviour Study conducted by MasterCard. Over 32% of those surveyed indicated
they access the internet for online shopping, of which more than 90% said they were highly
satisfied with their online shopping experience. While hypermarkets have been present in
Kuwait since 1999, their wider popularity has increased only recently, thanks in part to
greater customer and brand awareness because of anchor tenancy in mainstream malls.

Introduction
Industry
Analysis
Client
Requests
13
E-commerce is the ability of two parties to interact, buy, and sell products digitally over the
Internet through a number of devices. Within the Middle East, the total estimated revenue
from e-commerce reached €35 billion in 2015. By the year 2017, it is estimated that the
Middle East’s online transaction revenue will reach €46 billion. The leading countries in
Middle East for online transaction include all three-target countries: the United Arab
Emirates, Saudi Arabia, and Kuwait.
E-commerce
The Middle East is still weary of online transaction, but trust that digital security has
increased the number of online transactions in previous years. Toys and Video Games are now
one of the seven most bought items online in the Middle East.
Males heavily use the Middle East e-commerce sector more so than females. The only
country in which it is equal is within the United Arab Emirates. The average time spent online
by the Arab community is between three to five hours a day, as well.
The e-commerce sector has found its way into much of the Middle East, but in some countries
the noticeable difference in the terms of penetration and revenue amount is much more
noticeable. The three leading countries in terms of penetration and number of active buyers
are as follows: Kuwait with 2.4 million buyers, the United Arab Emirates with 6.8 million
buyers, and Saudi Arabia with 10.6 million buyers.
Within in each country the leading websites for online transactions varies. In Kuwait, the
leading websites are Amazon, Talabat, X-Cite, and Souq. In the United Arab Emirates, the
leading sites are Souq, Amazon, Apple Store, and Groupon. Finally, within Saudi Arabia, the
leading websites are Souq, eBay, Ali Express, and Ali Baba. These websites see the most
visitors and transactions from the residents of each individual country.
30.0%
31.0%
32.0%
33.0%
34.0%
35.0%
36.0%
37.0%
38.0%
2014 2015 2016* 2017* 2018* 2019*
Middle East and Africa: Digital
buyer penetration 2014-2019

Introduction
Industry
Analysis
Client
Requests
How often Mother’s Shop Online
Saudi Arabia
14
Kuwait
The United Arab Emirates
Females: 40,0 percent of the population
Average Disposable Income: €13,768
Discretionary Online Spending per month: €116,10
Mathematics and Assumptions:
Similarly to Kuwait, the women in this country have an unequal gender ratio when referring
to online shopping, thus reducing the odds that mother’s will buy the toy products. But,
the women in this country do still have spending money that they can use for toys.
Discretionary Online Shopping per month: €110,2
Within Saudi Arabia, the gender ratio is very unequal when referring to the total amount of
online shopping done. Men are heavily favored to shop more, thus reducing the odds that a
mother buys a toy product online. However, the women still have spending money to spend,
but not as much as the women in the United Arab Emirates.
Discretionary Online Shopping per month: €115,10
In the United Arab Emirates, 49,5 percent of the female populations is between the ages of
18-30 years old. Furthermore, we assume the primary age for women to have children
between the ages of 0-14 years old is 18-30 years old. Then, we can determine that 49,5
percent of the female population has the ability to spend €116,10 on toys for their children per
month. Due to the gender ratio is the United Arab Emirates being almost equal, we expect this
country to have more mothers shopping than Saudi Arabia and Kuwait.
* = based upon data found for United Arab Emirates, we assume 49,5 percent of the female population
is between the ages of 18-30 years old and that these individuals are most likely to have children
between the ages of 0-12 years old

Introduction
Industry
Analysis
Client
Requests
Age Groups
Saudi Arabia
15
Saudi Arabia’s population totals 28 million currently in 2016. Population make up is more
than 56.5 percent male, while females make up 43.5 percent of the total population. Saudi
Arabia has a young population with 28.6 percent being between the ages zero to fourteen.
The United Arab Emirates total population is at 10 million people. The United Arab
Emirates has an unevenly distributed population when it comes to gender, with 73.4
percent being male, and 26.6 percent being female. The age of population is relatively
uneven, as well, with only 12.2 percent of the total population being between the ages
of zero to fourteen.
Kuwait
Kuwait’s total population is small only totaling 4 million currently in 2016. In Kuwait
the gender difference within the population leans more towards male with 60 percent of
total population being male and 40 percent being female. Kuwait’s population in terms
of age has a growing younger prevalence with more than 22.5 percent being between
the ages of zero to fourteen.
Within this segment, we researched the population of the region and of each specific
country. The GCC region of the Middle East total population is to reach more than 53
million by 2020. The average age distribution in the countries included in the GCC will be
26.14 percent will be zero to fourteen.
-
9,000,000
18,000,000
27,000,000
36,000,000
Saudi Arabia United Arab
Emirates
Kuwait
Total Population and Population ages 0-14
Total
Population
Ages 0-14
Male 0-14

Introduction
Industry
Analysis
Client
Requests
Average Per Capita Spending
Saudi Arabia
16
Kuwait
Total Population: 4,007,146
Per Capita Spending on Toys per year: €327*
Due to missing data within Kuwait, we assumed the per capita spending on toys was similar
to the average per capita spending on toys in the Middle East. Clementoni SPA’s main
objective to capitalize on the per capita spending in Kuwait, thus establishing a
market share within the area.
Per Capita Spending on Toys per year: €327*
Due to missing data within Saudi Arabia, we assumed the per capita spending on toys was
similar to the average per capita spending on toys in the Middle East. Similarly, Clementoni
SPA must capitalize on the per capita spending within Saudi Arabia in order to be successful
within the Middle East.
Per Capita Spending on Toys per year: €353
In the United Arab Emirates, the average disposable income of the is €28,518. Furthermore,
the per capita spending within this country, specifically on toys, is €353. Due to the industry
being made up of discretionary spending, Clementoni SPA must look to advertise their
products to establish a brand name within the country and to establish a market share.
* = based upon missing data for Saudi Arabia and Kuwait, we assumed the per capita spending on toys
is €327 per year for these two countries in the Middle East (for the average per capita spending on toys
in the Middle East in €327 per year)

Introduction
Industry
Analysis
Client
Requests
Main Toy Magazines
Trends and features
17
Arabic magazines, both in print and online, have increased the past 2 decades in the
Middle East. In this topic, we have discussed aspects of Arabic magazines and we have
listed some of the most known children and women’s magazines of the MENA region.
• Foreign publishers have started to produce local versions of magazines in Arabic. Some
examples following this trend include: Good House Keeping, Forbes, Entrepreneur,
Good Health, Wedding, Marie Claire, Newsweek and many others;
• Arabic magazines tend to be less text heavy, have fewer pages, and in many cases also
fewer advertisements with respect to the English version;
• Magazines from the region can typically be found in the 3 different formats print
magazines, digital website magazines, and PDF magazines;
• There are several companies across Arab World that own a disproportionate share of the
print publishing business across the Middle East: Media Quest, Saudi Research and
Publishing Company, ITP Publishing Group, MBC Group.
Advertisments in Magazines
Advertising rates in Arabic Magazines vary based on a variety of factors, such as the type
of publication, the circulation and readership of the magazine, and the brand recognition of
the publication in the region. Most magazines and other publications have rates that are
negotiable. Below you will see a range of prices you might see for a variety of ad formats
in the various publications that are focused on the GCC.
• Strip Ad – €800 - €3,000
• Full page ad – €1,500 – €7,000
• Half page ad – €1,000- €4,000
• Back cover ad – €7,000 – €14,000
• Inside cover ad €6,000 – €12,500
• Inside cover ad spread €9,000 – €22,000
Overall, Arabic magazine advertising can be an effective tool if your campaign is well
executed, the publication has enough readership, and the ad is well positioned in it. The
main challenge with magazine advertising, compared to online marketing, is that you can’t
track your campaign and figure out which aspects are successful. Therefore, in order to
have a better understanding of the most appealing messaging and the audience, to target it
is recommended to start with online advertising. Once acquired the appropriate knowledge
and experience, the company can deal with the print magazine advertising.

Introduction
Industry
Analysis
Client
Requests
Main Toy Magazines
Children’s Magazines
18
Time Out Kids is Dubai's No.1 resource for parents, providing ideas and information on ways
to entertain and educate children in the city. Originally published as a quarterly supplement for
Time Out Dubai, by popular demand the magazine was successfully launched as a standalone
product in the summer of 2008. It provides useful information about education, food & health,
events, shopping, sports and outdoor activities for children. In the shopping section we can find
also a list of toy stores within this magazines.
Time Out Kids
Me Kids Middle East
Me Kids Middle East is and Early Learning Skills Development magazine for young
children (8–14 years). This monthly edutainment magazine features environment, nature,
science, self-read, read-to-me stories, poems, riddles and games.
The Youngest Middle East
The Youngest Middle East is an essential read reinforcing the all round development of
children in the age group of 8–14 years. It is designed to positively aid the children in their
overall development and to supplement their curricular activities knowledge. The
magazine is a bundle of attractive items, covering general knowledge, current affairs, IQ,
brain games, language lab (English, Arabic and French), moral stories, picture stories,
features, material for competitive exams, career guidance, topics on public speaking and
tips for students.
Established Market Share through
Advertisements
The
Youngest
Middle
East
Me Kids
Middle
East
Time Out
Kids

Introduction
Industry
Analysis
Client
Requests
Main Toy Magazines
Women’s Magazines
19
Emirates Woman is a monthly women's fashion and lifestyle
magazine. It has over 30 years at the forefront of publishing in the Middle
East and it delivers high-end fashion, on-trend beauty, luxury lifestyle and
travel reports, as well as in-depth features looking at both global and local
issues. its frequency is monthly. The average reader is aged 26-45, affluent
and well educated, thus showing the high potential that they have a child.
Emirates
Woman
Aquarius
Aquarius is a monthly women's lifestyle magazine aimed at smart, busy,
stylish women who are committed to nurturing all aspects of their lives. It
offers a UAE perspective on typical issues facing women around the world in
their day-to-day lives and helps them manage the roles they juggle as wife,
mother, friend and career woman. In addition to the print publication and
online environment, Aquarius also offers a monthly app, Aquarius Edit.
Advertisements within this magazine would effectively interest he United
Arab Emirates women.
Ahlan!
Arabia
Ahlan! Arabia is the most popular celebrity weekly magazine in the
Middle East. It offers the latest celebrity news from home and abroad,
along with exclusive interviews and star style. It also provides information
about fashion, beauty and events. In addition, it offers an app. Popularity
can effectively increase a market share, as brand establishment is created
and more people buy the toy products.
Mother,
Baby &
Child
Mother, Baby & Child magazine is the biggest parenting publication in
the Middle East. The magazine is available in all key retail outlets; from
hypermarkets to gas stations, and bookshops to groceries. Mother, Baby &
Child is also distributed through outlets frequented by pregnant mothers
or new parents such as pre-natal classes, doctors’ and gynecologists'
clinics, hospitals, mother & child groups, day care centers, nurseries,
and expat groups. Parental figures would easily be looking to buy their
new born children toys product, thus furthering the success
of the company.

Introduction
Industry
Analysis
Client
Requests
Hottest Licenses
20
With a stable economy, traditional toys and games continue to see healthy growth. Parents
were particularly more receptive to toys with a learning element in them, although the
category for scientific/education toys itself continued to account for only 2% of the overall
category in 2014.
Analyzing the different offers of the main online toys dealers in the Middle East area, we
found out that the most appealing license for the Arabian countries are the Western brands.
All the distributors we examined, have a wide range of products with this feature. On the
ToyTriangle website, a leading toy distribution company, established in Saudi Arabia and
operating in all the MENA region we can easily see that their offer is composed by Disney,
Disney Frozen, Barbie, Star Wars branded toys.
For this reason, also our multinational competitors, like Mattel, that are already strongly
present in this market have not adapted their licenses portfolio.
On the other hand, the movie and TV culture highly influenced children, attracting them to
licensed toys related to Spiderman, Avengers and Disney Princesses, giving Hasbro a boost in
sales. Movies, have solely created a cultural revolution and transformed the toy industry
starting primarily with the “Frozen Effect”. In 2013, Disney’s Frozen grossed €1,3 billion at
the box office and in licensing merchandise, as well. This cultural revolution has led many
companies to stress the importance of licensing in order to effectively sell toys products.
Children are now more inclined to buy the toy products, more so than ever, when the products
are televised to them.
Clementoni
Licensing
Efforts
Established
Market
Share &
Profitability
0
10
20
30
40
50
2010 2011 2012 2013
inBillion(€)
Disney Brand Licensed Merchandise
Generated Revenue

Introduction
Industry
Analysis
Client
Requests
Television Commercial Style
21
Most of the commercials focus on the imagery of community and family. In fact, Arabs are
considered to be collectivists since they show a high degree of loyalty and commitment to
their group, family, and tribes. They are committed to their extended family unit and they feel
a strong responsibility as a representative of their group.
When designing a television campaign in Middle East it is important to honor and respect
tradition, status, and cultural maxims. Many marketing campaigns targeted seasonal holidays
and celebration to increase profitability.
It is important to understand the power of language. In countries like Saudi Arabia, Arabic is
used for nearly everything, while a large portion of the population does not speak English. In
addition, even if your Arab audience speaks English it is much less likely to buy products
from English-language websites. 55% of respondents in a language survey stated that they
only buy from websites where information is clearly presented in their own language.
Starbucks has gained impressive market share in the Middle East partly because they
understand the power of language.
Companies have to take into account that there are significant differences between Arab
nations, therefore it is important to understand these differences and localize advertising in
each country of the Arab world.
Commercials should include imagery of the product in a setting that makes it appear more
expensive. In fact, Arabs come from a society that is mainly focused on honor and shame.
Great amounts of time are spent trying to earn or maintain honor while avoiding shame. In this
context, luxury products represent a way to attain a form of honor and respect very quickly.
Most Arab nations rank very high in the cultural category of uncertainty avoidance. As a
result, extreme importance should be given to make things very clear and easy for your
audience. In order to avoid uncertainty, when designing the commercial it is important
to avoid imagery that could, confuse the end user, make language clear and concise,
provide easily understandable information, and include trust symbols.
0.
0.5
1.
1.5
2.
2.5
3.
2014 2015* 2016* 2017* 2018* 2019*
TV Ad Spending in the Middle East
(in billions)

Introduction
Industry
Analysis
Client
Requests
Television Commercial Style (cont.)
22
Despite the abundance of seasonal marketing in major markets around the world, only few
companies are taking advantage of the opportunities for seasonal promotions offered by the
Arab world. However, it is proved that Arabs respond quite well to this type of promotions.
Below is a list of Islamic holidays, their religious significance, and their dates for the 2016
year. (Note that the Islamic holidays listed have different Western dates each year since the
Islamic calendar is roughly eleven days shorter).
Seasonal Promotion in the Middle East
Ramadan (7 June to 5 July)
Ramadan is celebrated during the 9th month of the Islamic calendar, and during this time
Muslims around the world fast in reverence of the first revelation of the Quran to the Prophet
Mohammed. Much of the online activity shifts from daytime into the evening hours, meaning
marketing campaigns should be adjusted accordingly. It’s important to remember that while
Ramadan presents many valuable seasonal marketing and promotional campaign
opportunities, the behaviors of Middle Eastern consumers also shift with their altered work
and social schedules. Marketing in the Middle East during this time is particularly valuable for
food, clothing, and electronics retailers, though many companies with smart advertising
campaigns see an uptake in business.
Eid al-Fitr (7 July)
One of the most important Islamic celebrations, the Eid al-Fitr festival marks the end of
Ramadan.. Before the special Eid meal is served, young children will line up in front of each
adult family member, who dispense gifts either in the form of toys or money to children. For
most countries in the Arab region, the Eid festival is celebrated with a three-day government
holiday to allow time for traditional charity and family focused activities. In Saudi Arabia,
both Eid celebrations are a ten-day government holiday.
Hajj (9 September- 12 September)
Hajj is a five-day pilgrimage that begins on the eighth day of the final month in the Islamic
calendar. Each year, millions of Muslims travel to Mecca from all over the world to perform
Hajj. This means not only a huge increase in travel related spending to Saudi Arabia, but also
in many goods and services available in Mecca. Reports suggest the impact of Hajj on the
Saudi Arabian economy represents roughly seven percent of GDP. Though a religious
experience, many marketers have been able to capitalize on the yearly cropping of fresh
consumers during Hajj, particularly for those companies that sell products that can be taken
home as gifts, including perfume, electronics, and small appliances.

Introduction
Industry
Analysis
Client
Requests
Television Commercial Style (cont.)
23
Seasonal Promotion in the Middle East
Eid al-Adha (11 September)
Celebrated globally by Muslims, with most countries in the Middle East declaring it a three-
day holiday, Eid al-Adha is the second most important Muslim holiday. During the
celebration, a sheep or goat is typically sacrificed, and families gather to eat and exchange
gifts and well wishes. This festival is another huge opportunity for retailers to run seasonal
promotions in the Middle East, as spending on gifts for family and friends spikes during the
holiday.
Islamic New Year (2 October)
Unlike New Year celebrated around the world on January 1 each year, the Islamic New Year is
a more quiet and personal affair. Generally not a large celebration, it falls on the first day of
the month of Muharram and marks the beginning of the new calendar that is used to determine
all the dates of the Islamic holidays that liturgical year. Though not an official holiday, like
Eid, it is celebrated across the Arab region with prayer, reflection, and a retelling of
the hijra (flight) of the Prophet Mohammad from Mecca to Medina in 622 CE.
Prophet Mohammad’s Birthday (11 December)
The birthday of the Prophet Mohammad is celebrated by Sunni Muslims on the 12th day of the
third month in the Islamic calendar, and by Shi’a Muslims on the 17th day of the same month.
Depending on which countries you are targeting this could be a good time for a seasonal
promotion but you should be careful to consult local experts to make sure it is appropriate for
the target countries.
Other Holidays
Across the Middle East, many countries celebrate Christian holidays in addition to the Islamic
holidays mentioned above. Most notably, Easter and Christmas are celebrated in countries
with sizeable Christian minorities, including Lebanon, Jordan, Egypt, and Syria. It is
important to note that the Orthodox and Coptic calendars differ from the Western Christian
calendars, and while Easter is celebrated on a different date every year, the Orthodox and
Coptic Easter is normally different from the Western Easter. Marketing and advertising
campaigns during these seasonal holidays are very popular with both local and expat
populations, with many retailers running successful promotions that capitalize on these
celebrations.

Introduction
Industry
Analysis
Client
Requests
Suggestions
Decision Matrix
24
Client Requests Weight UAE Kuwait
Saudi
Arabi
UAE
Aggregate
Kuwait
Aggregate
Saudi Arabia
Aggregate
Competitors 5% 3 3 3 0.15 0.15 0.15
Distribution
Channels
15% 4 2 3 0.6 0.3 0.45
Mother's Online
Shopping
15% 3 2 2 0.45 0.3 0.3
Age Groups 25% 2.5 2 4 0.625 0.5 1
Ave. Per Capita
Spending
40% 3 2 2 1.2 0.8 0.8
3.025 2.05 2.7
To determine which country has the highest potential of establishing a significant market
share, currently, we conducted a Decision Matrix (as shown below). The Decision Matrix
takes into account a number of factors, all being the client’s specific requests within the report
of the project. Next, the client’s requests are weighted based off of importance to establishing
a significant market share within each country. According to our consulting team, average per
capita spending and the amount of children within the area (age groups), are the primary
factors in establishing a market share. Without parents willing to spend within a discretionary
industry and without children to by products for, success is difficult to obtain.
Next, within our Decision Matrix, we compared each countries potential with one another,
alongside the specific client’s requests. The 1 -5 scale is based off of potential, with 1 having
the lowest potential to establish a market share on that specific client request and 5 having the
highest potential to establish a market share on that specific client request.
Finally, after all mathematics are worked out, we concluded with an aggregate score for each
client request, for each country. After all client requests are brought to their aggregate score,
we are able to apply simple addition to all aggregate scores to find the country with the
highest potential based off of these client requests. As seen below (in the bolded text), the
countries are ranked with highest potential to lowest potential as the United Arab Emirates,
Saudi Arabia, and then Kuwait, respectively. Based off of these factors, Clementoni can
establish a market share the quickest in the United Arab Emirates, for this area has the highest
potential to be successful.

Introduction
Industry
Analysis
Client
Requests
Suggestions (cont.)
Main Toy Magazines
25
Separately, there was also a number of clients requests and factors not included in the previous
Decision Matrix. These three request include the Main Toy Magazines, Hottest Licenses, and
Television Commercials. Although not in the Decision Matrix, our consulting team still vital
suggestions that assist Clementoni establish a market share within the United Arab Emirates,
Saudi Arabia, and Kuwait.
Increasingly today, one can see toy companies gaining licensing to mass media establishments.
In 2013, the world stood in awe as the “Frozen Effect” took over the toy industry,
revolutionizing the industry. We suggests to continue licensing partnerships with mass media
establishment within the Middle East area. For instance, if there is a popular television show,
commercial icon, or movie production that has already established their identity in the Middle
east, it would be in Clementoni’s best interest to partner will that company. Currently, within
the Middle East, Clementoni already has established excellent licensing agreement.
Clementoni must continue to these successful agreements within the future.
Within the Middle East, Arabic magazines (in print and online) have increased the past 2
decades. This trend is continuously growing and can serve as a vital aspect to advertising
campaigns for the Clementoni toy products. Advertising campaigns will not only create more
brand establishment, but it will get the product out to the consumer, thus increasing overall
sales and profitability. Our consulting team suggests feature the toy products in numerous
children’s magazines and women’s magazines to increase toy sales. Our children’s magazines
suggestions include: Time Out Kids, Me Kids Middle East, and The Youngest Middle East.
Our women’s magazines include: Emirates Woman, Aquarius, Ahlan! Arabia, and Mother,
baby & Child.
Hottest Licenses
Television Commercial Styles
The majority of Middle eastern commercials focus on the imagery of community and faith, as
the majority of Arab are considered to be collectivists themselves. Therefore, certain
procedures must be taken when advertising the Clementoni product on television commercials.
One of the primary procedures we believe can effectively connect to the Middle eastern people
is tying in their seasonal holidays to the Clementoni products. There are a number of Middle
eastern holidays that have a strong family tie and in which gifts are exchanged, as a result. Not
only will the commercial be accepted within the culture, Clementoni will become more
profitable and establish an identity within the Middle east.

Introduction
Industry
Analysis
Client
Requests
Conclusion
26
The United Arab Emirates, Saudi Arabia, and Kuwait have increasingly experienced economic
growth. Within the Middle East, gross domestic product has steadily increased from 2015 and
is expected to grow into 2020. As economic conditions increase within the Middle East,
consumers will gain consumer confidence, thus assisting Clementoni SPA. Consumers will be
more optimistic about economic conditions, thus spend more within the highly competitive
discretionary toy industry. Furthermore, consumer will look to spend more on the
discretionary toy products as the inflation rate is expected to steadily decrease into 2020.
Additionally, the volume of imported good is expected to increase into 2020, thus assisting the
toy industry and profitability of toy companies imported goods.
Efficient
Market
Share
Main Toy
Magazines
Hottest
Licenses
Television
Commercial
Styles
Within the Decision Matrix, our consulting team analyzed 5 client’s requests: including
Competitors, Distribution Channels, Mother’s Online Shopping, Age Groups, and Average Per
Capita Spending. After extensive secondary research and weighting the overall requests
(specifically on importance to establish a significant market share), we have conclude that the
United Arab Emirates has the highest potential to be successful and has the most potential to
currently establish a significant market share.
Finally, after doing extensive secondary research on Main Toy Magazines, Hottest Licenses,
and Television Commercial Styles, our consulting has identified various ways to increase
Clementoni’s overall market share in the United Arab Emirates, Saudi Arabia, and Kuwait. The
main children and mothers magazines can effectively bring the Clementoni brand to the
Middle Eastern people. Continuing licensing partnerships with mass media establishments can
effectively assist Clementoni and the brands overall profitability. Finally, Television
Commercial can assist Clementoni establish a market share if the culture is taken into account.

References
A Toy Story from the Gulf. (2015). Retrieved July 11, 2016, from http://www.bq-
magazine.com/industries/2015/01/toy-story-gulf
Dosoqi, M. (2016, January 19). Explore Latest Middle East eCommerce Statistics & Trends
You Need to Know about in 2016. Infographic, 1. Retrieved July 12, 2016,
from https://www.linkedin.com/pulse/explore-latest-middle-east-ecommerce-
statistics-trends-maher-dosoqi?forceNoSplash=true.
Effective Measure. (n.d.). Monthly online retail spending per online shopper in Middle
Eastern countries in 4th quarter 2012 (in U.S. dollars). In Statista - The
Statistics Portal. Retrieved July 7, 2016, from
http://www.statista.com/statistics/278239/monthly-online-retail-spending-per-
online-shopper-in-middle-east/.
Effective Measure. (n.d.). Monthly online retail spending per online shopper in Middle
Eastern countries in 4th quarter 2012 (in U.S. dollars). In Statista - The
Statistics Portal. Retrieved July 7, 2016, from
http://www.statista.com/statistics/278239/monthly-online-retail-spending-per-
online-shopper-in-middle-east/.
Kuwait: Country Profile. (2016, February 16). Retrieved July 11, 2016, from
http://www.portal.euromonitor.com.proxy.library.ohiou.edu/portal/analysis/tab
Ligaya, A. (2009, June 13). Toy Sales Soar in UAE. Retrieved July 11, 2016, from
http://www.thenational.ae/business/banking/toy-sales-soar-in-uae
Middle East toy industry worth $1 billion annually. (2002). Retrieved July 11, 2016, from
http://www.albawaba.com/business/middle-east-toy-industry-worth-1-billion-
annually
S. (2008, April 1). Value of Middle East toy market put at Dh5.5b. Retrieved from
http://gulfnews.com/business/economy/value-of-middle-east-s-toy-market-
put-at-dh5-5b-1.95895
Saudi Arabia: Country Profile. (2016, February 16). Retrieved July 11, 2016, from
UAE: Country Profile. (2016, February 16). Retrieved July 11, 2016, from

Appendix A
Business Model Canvas

Appendix B
SWOT Analysis
SWOT
Strengths:
Young and numerous people working
in R&D department;
Wide range of products;
Quality (EC conformity marking) and
creativity;
Design;
Made in Italy;
Internal production for the most of
products (except for the electronic
components developed in China);
Combination of technology and
tradition;
Brand identity;
Strong brand awareness
in Europe.
Weaknesses:
Lack of experience in the non-
European market;
Weak brand awareness worldwide;
Lack of market share.
Opportunities:
High purchasing power of
Arabian people;
The toy market in Middle
East shows rising sales;
Rising number of children
and young people in this area;
Low presence of local toy’s
manufacturers;
High appeal for western
toys.
Threats:
Socio-cultural differences;
Political problems;
Legal restrictions;
Strong presence of multinational
companies as competitors;
Complexity of the Middle East.

Appendix C
Middle East Population
0
10000000
20000000
30000000
40000000
50000000
60000000
70000000
80000000
90000000
100000000
Middle East Population
Total 438.086.044

Appendix D
Hofstedee Model
The Hofstedee Model studies how values
are influenced in the workspace by
culture. Hofstedee defines culture as “the
collective programming of the mind
distinguishing the members of one group
or category of people from others”. Within
the charts shown on this page, four
dimensions are shown: including power
distance, individualism, masculinity, and
uncertainty avoidance for the United Arab
Emirates, Saudi Arabia, and Kuwait.

Appendix E
Competitor Analysis

Appendix F
Competitor Analysis

Appendix G
Competitor Analysis

Appendix H
Competitor Analysis

Appendix I
Competitor Analysis

Appendix J
Well Known Arabic Commercials
1. Panda Cheese: https://youtu.be/XYz3sl0LEA4
2. McDonalds Arabia: https://youtu.be/fYsLDhDRUeI
3. Snickers Chocolate: https://youtu.be/I36boqQsgJU
4. Chipsy: https://youtu.be/1V_vLeILAgI
5. Moro Chocolate Arabia: https://youtu.be/BHRzKoIuseA
6. Toyota HiLux: https://youtu.be/GHcm8TBXZMo
7. MTV: https://youtu.be/cats9xoDhqo
8. IKEA: https://youtu.be/vFJNPfpK2Tk
9. Gulf Bank: https://youtu.be/PT3LK9fkxY4

Appendix K
Country Specfic Holidays
Saudi Arabia
September 23: Saudi National Day/ Unification of the Kingdom
Kuwait
February 25: Kuwait National Day
February 26: Kuwait Liberation Day
February 27: Public Holiday
May 5 (2016): Prophet’s Ascension
United Arab Emirates
May 5 (2016): Prophet’s Ascension
November 30: Marty’s Day
Dec 2: UAE National Day

Appendix L
Saudi Arabia
% retail value rsp excl
sales tax 2013 2014 2015
Savola Group 3.1 3.1 3.2
Landmark Group 1.6 1.8 2.0
Al Nahdi Commercial
Group 1.4 1.8 1.9
Saudi Co For Hardware
(SACO) 1.3 1.3 1.3
Abdullah Al-Othaim
Markets Co 1.4 1.3 1.3
Inter Ikea Systems BV 1.2 1.3 1.3
Al Mutlaq Group 1.0 1.1 1.2
Jarir Marketing Co 1.0 1.0 1.0
Axiom Telecom LLC 1.0 0.9 0.9
United Electronics Co 1.0 0.9 0.9
Bin Dawood Group 0.8 0.7 0.7
Arabian Oud Co 0.5 0.6 0.6
El Faleh Group 0.6 0.6 0.6
Al Aamer Furniture Co 0.5 0.5 0.5
Inditex, Industria de
Diseño Textil SA 0.4 0.5 0.5
Abdul Samad Al Qurashi
Co 0.4 0.4 0.5
Al Mawarid Holding Co 0.3 0.4 0.5
Al Romayzan Co 0.4 0.4 0.5
Hussein Bakry Gazzaz &
Co Ltd 0.5 0.5 0.4
Yassen United Group 0.4 0.4 0.4
Others 81.3 80.6 79.8
Total 100.0 100.0 100.0

Appendix M
% retail value rsp excl
sales tax 2013 2014 2015
Consumer Co-operative
Union (CCU) 6.2 6.2 6.1
Carrefour SA 5.4 5.6 6.0
Emke Group 4.5 4.7 4.8
Landmark Group 3.2 3.4 3.7
Casino Guichard-
Perrachon SA 1.0 1.0 1.3
Al Fahim Group 1.0 1.0 1.2
Life Healthcare Group 0.8 0.9 1.2
Damas International Ltd 1.2 1.2 1.1
T Choithram & Sons 1.0 1.0 1.1
Sharaf DG LLC 1.1 1.2 1.0
Al Khayyat Investments 0.7 0.7 0.9
Inter Ikea Systems BV 0.7 0.7 0.7
Al Safeer Group of Cos 0.6 0.7 0.7
Spinneys Group Ltd 0.7 0.7 0.7
Majid Al Futtaim Group
LLC 0.7 0.7 0.7
Rivoli Group 0.6 0.7 0.7
DM Healthcare LLC 0.4 0.5 0.6
Emirates National Oil Co
(ENOC) 0.6 0.6 0.6
Jumbo Electronics Co
LLC 0.7 0.7 0.6
Souq Group Pvt Ltd 0.3 0.5 0.5
Others 68.5 67.5 65.9
Total 100.0 100.0 100.0

Appendix N
% retail value rsp 2012 2013 2014
- Store-Based Retailing 97.3 97.0 96.5
-- Grocery Retailers 19.0 20.5 20.7
--- Modern Grocery
Retailers 19.0 20.5 20.7
---- Hypermarkets 14.3 15.7 15.8
---- Supermarkets 4.7 4.8 5.0
-- Mixed Retailers 20.2 20.6 20.9
--- Department Stores 13.4 13.8 14.1
--- Variety Stores 6.8 6.8 6.8
-- Non-Grocery
Specialists 58.0 55.9 54.8
--- Home and Garden
Specialist Retailers 1.8 1.8 1.9
--- Leisure and Personal
Goods Specialist
Retailers 49.9 49.9 49.8
---- Traditional Toys and
Games Stores 46.8 46.8 46.7
---- Media Products
Stores 1.3 1.3 1.2
---- Other Leisure and
Personal Goods
Specialist Retailers 1.8 1.9 1.9
--- Other Non-Grocery
Specialists 6.4 4.1 3.1
- Non-Store Retailing 2.7 3.0 3.6
-- Internet Retailing 2.7 3.0 3.5
Total 100.0 100.0 100.0

Appendix O
Online Payment Methods
The online payment options in the Middle East are quite different from other areas of the
world. In fact, despite the opulent wealth of many of the Gulf countries, payment methods in
the Arab world are still catching up to what they are in many western countries. Many Middle
Eastern countries have typically been cash-based societies and the use of credit cards has
been a relatively new thing in the region. The reasons behind this fact are mainly two: Arab
nations rank very high in the cultural category of uncertainty avoidance; laws about interest
in the Quran and the Hadith have made it hard for many interest-based payment methods to
take hold in the region because they are considered to be against the practices of Islam.
Below some of the most common payment methods available in the region.
Cash On Delivery is probably the most popular payment method in the region. It has gained
popularity also because it allows consumers to see the products they bought online before
they actually pay for them. Due to this fact many online retailers in the region say that cash
on delivery has a rate of restitution much higher than any other payment methods. This can be
very costly for the e-commerce merchant as they have to pay the delivery cost without
receiving any type of refund. As a result, some retailers in the region have chosen not to use
cash on delivery. However, it is important to note that in countries like Saudi Arabia, up to
75% of the online transactions are conducted by using the cash on delivery method.
Considering the Saudi Arabia is the wealthiest market in the region, successful regional e-
commerce companies can’t afford to ignore this method.
Debit and credit cards are probably the second most popular payment method in the region.
Due to the Islam rules about credit and interest, many banks and financial institutions do not
offer credit cards but only debit cards. Indeed these cards provide many of the benefits of the
credit cards without being subject to interest and other aspects that go against the rules and
traditions of Islam.
Despite the problems related to the Islam rules, many consumers in Middle East use credit
cards to buy online, especially the expatriates that in most cases are much more than the
nationals. In addition, not all Arabs are Muslims and many Muslim Arabs do not adhere to all
the rules regarding interest. The two most commonly accepted credit cards are VISA and
MasterCard.

Appendix P
Online Payment Methods (cont.)
CashU is a specific MENA region payment method. Thousands of vendors and merchants
across the Middle East use CashU as a payment option to get access to millions of young
online buyers across the GCC North Africa and the Levant. Basically, CashU is a prepaid
payment card. Consumers around the Middle East can go to different locations and use cash
to top up their cards and later on they can use that same card to make purchases online. This
card has become very popular in countries like Saudi Arabia among those who have limited
access to credit cards or think that buying things online is unsafe or unreliable.
PayPal, in 2014, launched the Arabic version of its mobile app. Currently PayPal is stated to
have a 5% share of the region’s e-commerce market. The company has mentioned that they
plan to roll out many new features specifically for the region and they also plan to partner
with local banks in the region to offer their services to more customers and bring consumers
more flexibility with their online shopping in the Middle East. PayPal is a great option for
many consumers in the region. However, for some consumers in the region it’s very hard to
get a PayPal account. For example in Jordan to our knowledge there is only one bank that will
allow you to set up a PayPal account through it. In addition, in many countries in the region
banks aren’t trusted by many segments of society. Therefore, it’s hard to see PayPal totally
dominating online payments in the region.
Wire Transfer is probably the most complicated online payment method in the region.
Although there are some retailers in the Middle East offering this payment option, the
challenge with wire transfers for the e-commerce is that there is no way to fully automate this
payment method. Despite this problem some retailers chose to allow wire transfers to reach
certain types of demographic segments.

Appendix Q
Partnership Possibility in Kuwait
Kidzania, is a company that “provides children and their parents a safe, unique, and very
realistic educational environment that allows kids between the ages of four to twelve to do
what comes naturally to them: role-playing by mimicking traditionally adult activities”.
Located in Kuwait, Dubai, and Saudi Arabia, this company would be an excellent
partnership for the Clementoni toy products. For instance, both of the company’s value
propositions involve children at play.
Within this company’s theme, children “perform ‘jobs’ and are either paid for their work (as
a fireman, doctor, police officer, journalist, shopkeeper, etc.) or pay to shop or to be
entertained”. The Clementoni toy products could easily be implemented within this business
structure and idea, thus creating a higher amount of brand awareness for Clementoni,
especially within Kuwait.

GCP Project Clementoni Final

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