Arab B2b Takes New Direction in North America

The New York Times conducted an interview with Ms. Janine Jaouni, Director of Business Solutions, an entrepreneurial e-commerce figure in the Middle East; the interview was part of a research and collaborative efforts by Microsoft, Google and eBay to explore markets in the Middle East and North Africa (MENA) for introduction of new product lines and services. According to Ms. Jaouni, the e-commerce environment in the Middle East and North Africa faces several obstacles which deprived consumers in the region from commodities which [surprisingly] they can afford.

“The major issue is lack of a free market economy, companies are encouraged to export, yet customs and red-tape are a trade mark of most Arab economies, perhaps with the exception of the Emirates.” Ms. Jaouni continues: “the population of MENA stands at approximately a quarter-billion people, yet the economic boundaries have defeated the purpose when it comes to creating economies of scale.”

Microsoft, Google and eBay realize that MENA is an untapped consumer environment, yet the challenge remains on how to make such fragmented demands make economic sense, after all, the American business model is based on centralized operations of scale, particularly when it comes to the services sector, the challenge is the many borders, each with its own set and often contradictory rules of doing business.

Ms. Jaouni points out that her company Business Solutions has identified three challenges. The first challenge is lack of infrastructure for transportation and speedy delivery and reliable mail services; the second is lack of credit (less than 2% of the population of MENA has credit cards, 5% of those in her estimates have PayPal accounts), and the third is lack of trust – this is due to the fact that prosecuting someone in a different country is very difficult, particularly for consumer size transactions. Ms. Jaouni discounts the challenge of the centralized business model; “the web and e-commerce in particular lend themselves to a decentralized model,” she adds.

Then, how do you do e-business in the Middle East and North Africa, isn’t that what you do?, we asked.

Many young Arab entrepreneurs have realized that they can setup simple e-commerce (business-to-customer, B2C) sites catering to European and American customers. The nature of the products ranges from souvenirs to specialty or traditional items. These businesses, while profitable, require extensive marketing and dedication, something which is not easy to do for a part-time entrepreneur. Ms. Jaouni states: “Our approach and company philosophy is different; we help these and others setup a network of Business-to-Business (B2B), and from there B2C, thus creating a web of tiered network referred to as B2B2C.”

Business Solutions realized the potential of B2B marketing and produced its first EXPO package in 2003. This B2B package is designed for export oriented markets and includes categorized listings of businesses, each business with online catalogs, inquiry baskets, PDF brochures and utilities to export spreadsheets for large scale marketing campaigns. EXPO is most suitable for markets with specialized product sectors, like in Jordan, Palestine, Iraq, Egypt, Syria and Morocco. The platform has significantly contributed to exports of pharmaceuticals, cosmetics, marble and stone, leather products, textiles and furniture.

Based on the success of EXPO, the company launched the Arab Travel Network (ATN) in 2005. ATN is a site totally administered by travel agents, tour operators and companies which provide related travel and tourism services. For businesses, it functions as a B2B platform creating a travel and tourism marketplace in an area long ignored by Expedia, Travelocity and Orbitz. Tour operators are now capable of organizing tours and selling packages to travel agents world-wide. Travel agents in turn offer travel packages to customers, also online, a very successful B2B2C model. The major tourism sectors benefited by this package are in Egypt, Morocco, Tunisia, Lebanon, Palestine and Jordan. Ms. Jaouni states that Business Solutions has also experimented with hotel reservations and other services related to Hajj and Omra in Saudi Arabia, and is currently looking for local partnership and representation. The Emirates market also has great potential, but requires a unique model which Business Solutions is looking into.

The latest release by Business Solutions is ArabCityUSA.com which is a super-portal targeting the Arab Community in North America. The planned release of ArabCityUSA.com was postponed by six months in order to re-design the site to make full use of the latest AJAX technology. This technology enables vendors and users alike to get results effectively without having to “mine” for information. The site is focused on travel services with airfares and packed offers, and online airfare quotes system to many airports in Arab countries and world-wide destinations. The portal has a comprehensive list of restaurants offering Middle Eastern and traditional Arabic (particularly Lebanese and Moroccan) cuisine, where each restaurant self publishes specialties and menus which appear in a compiled easy to browse pages. The site also offers a comprehensive business directory with categorized listings and online catalogs for products and services. In addition to AJAX, the site utilizes US zip codes to calculate distance to such businesses and sorts results by distance. The site has a social platform which offers a meeting place similar to MySpace.com; among the innovative features is Skype.com online status for members and statistics about who is online using IP-to-Country detection technology. Ms. Jaouni adds that the target Arab communities in the US are primarily in Paterson and Jersey City in New Jersey, New York City, Boston, Baltimore, Washington DC, Houston, Dearborn, Chicago, Detroit, Los Angeles and San Francisco. All services offered through ArabCityUSA.com are free, except for the advertisements, preferred and featured listings.

The future of e-business in the MENA region remains promising, evident by the high number of internet users. “Somehow we need to turn browsing time into a shopping experience”, Ms. Jaouni comments, “I see people taking shopping trips to London, Paris and New York; we need to make the same products available here for the middle-class, it is all products they can afford.”