Hunting in the Middle East's business jungles
Updated: 2010-07-15 07:07
By Emma An(HK Edition)
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It's metaphorically an oxymoron, but the developing desert economies of the Middle East have become, from the business standpoint, a competitive jungle and test of business fitness and adaptability for Hong Kong investors and companies.
The last decade has witnessed a "gold rush" in the Middle East, thronged with investors from around the globe looking to share in and tap into the region's prosperity. "To make a livelihood here, you have more than the local companies to compete with. You have competitors with diverse backgrounds to outperform," Stephen Wong, regional director for the Middle East and North America at the Hong Kong Trade Development Council, said in an exclusive interview with China Daily.
He talked about the prospects for Hong Kong companies doing business in the Middle East and advised as well on what they could do in order to survive the cutthroat competition.
The biggest challenge for Hong Kong companies who are seeking a presence in that market is competition, according to Wong. "Most of the companies operating here are of foreign origins. You can see companies from the US, Europe, Africa, Japan, South Korea, etc. The best a company can do in order to survive is to offer the best value for money," he added, suggesting that Hong Kong companies with no obvious advantage over others from elsewhere should be aware of their relative strengths and tailor their products and services accordingly.
Wong mentioned that companies from Hong Kong are relatively more experienced at managing business, designing products and providing financing, which has helped them earn recognition across the region. "I have seen plenty of Hong Kong involvement in the retail and hotel sectors as well as in the mega construction projects undertaken here," he added. Hong Kong's Mass Transit Railway Corp (MTR) has been providing consultancy service to Dubai Metro, which has lately introduced the Octopus system initiated by the MTR, according to Wong.
"But this market is open not only to big corporations. It is open to small- and medium-sized companies as well," said Wong, in light of the fact that quite a few SMEs from Hong Kong have done a brilliant job in providing customized services for local projects.
"The Middle East market promises tremendous opportunities to Hong Kong's investors despite the financial hardship lately seen in the region," Wong said while commenting on the breakout of a debt crisis that has caused a temporary lull in investment frenzy and a significant shelving of construction projects in that region. However, the first half of this year has seen investors come back, encouraged by the recovery of the region's economy, he said.
Suggesting that this is the wrong time to desert the desert, Wong said, "It is a market too good for us to desert," adding that "the top-notch facilities and infrastructures are excellent back-up to business operations." According to Wong, goods from Hong Kong, once cleared through customs at the UAE port, can now be directly loaded on airplanes and transported to other areas, thanks to the international airport newly opened right beside the seaport.
"A slew of projects are in the pipeline, opening huge possibilities for Hong Kong companies," Wong said, suggesting that $140 billion worth of hotels are under construction in Dubai, while infrastructure projects worth over $50 billion will soon be launched in Iraq. Qatar, currently bidding for the 2022 World Cup, is expected to build 40,000 new rooms once it succeeds with its bids. "We will see foreign participation in all these projects. But to edge above the competitors, Hong Kong companies should learn to produce cheaper and to turn out customized services with competitive prices," Wong concluded.
China Daily
(HK Edition 07/15/2010 page3)