Australian Products Growing in Popularity in the UAE (Part-2)

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Following on from the success of the Hong Kong market insights online forum in July, Export Connect arranged another online forum, this time on the UAE market and what Australian businesses can expect when it comes to exporting Australian grocery and retail products into the market. In this final installment of the two-parter blog, we share the key insights gleaned during the online forum on Australian products in Choithrams, marketing strategies, expectations from suppliers, regulatory hurdles and other pertinent information for Australian food businesses looking to enter the UAE market.

The UAE Market Insights and opportunities online forum attracted over 160 registrants, with 70% being from the food and agribusiness sector. 82% of the participants are exporters, with 52% currently exporting to the UAE. It was encouraging to see some of the biggest brands in Australia, including Arnotts, San Remo, Coles, Bundaberg Ginger Beer and Sun Rice, registering for the webinar, showing that whether there is a pandemic happening or not, it’s important to stay up to date on information surrounding exporting Australian products.

The online forum was presented in collaboration with the Australian Food & Grocery Council and Choithrams, and Export Connect was joined by Samantha Blake, Director of Industry Affairs at AFGC, as well as expert panelists from T Choithrams & Sons, Kirti Meghnani, Procurement Manager and Amit Nihalchandani, buyer responsible for Australian products.

Australian Products on the Shelf

When the topic of how many Australian products are on the shelf at Choithrams, Amit Nihalchandani mentions that there are around 700-800 SKU’s they buy locally from distributors or have exclusive distribution rights to sell.

Mr Nihalchandani explained that consumers are mainly interested in Australian products due to the quality of the product they are getting from Australia. “That is the biggest reason people are ready to buy Australian products.”

On the subject of how Australian suppliers can compete with cheaper brands, Mr Meghnani said that “Australian products are known for their quality, and quality doesn’t come cheap”. These products tend to be well managed, however, they may move less. The more expensive products tend to need promotion, and consumers need to be educated on the benefits of the more expensive product.

Mr Meghnani spoke about gourmet products being stocked in store by saying that Choithrams never closes its doors to very expensive or gourmet products. They do dabble in those products, but generally in very small quantities.

The 360 Degrees of Marketing

Marketing in the UAE is slightly different from marketing in Australia. Choithrams has found that a 360-degree approach works best. This includes sampling in stores, displaying the product prominently in-store and promoting it through social media channels. Very rarely do they discount or offer twin packs of products.

Mr Meghnani mentioned that Choithrams run the “Australian Goodness Festival” yearly, working with most of their partners and Australian Government bodies to run successful customer promotions. This festival runs for approximately two weeks, and is a “very effective way of telling consumers of how many Australian products we have and which brands on the shelf are Australian.”

On the social media and promotion side of things, it is interesting to see that Choithrams have stopped all print and radio media, now focusing on social media for advertising and promotions.

Expectations from Suppliers

As with any FMCG distributor and retailer, there will always be expectations for the supplier to meet. When discussing the expectation Choithrams has for their international suppliers, it all comes down to the quality and consistency of the product. Consumers want a product that is fresh and has value.

Mr Nihalchandani notes that Choithrams also looks for suppliers who are looking for long term strategic partnerships to build a business relationship and bring the brand to the UAE market. It is these long term strategic partnerships that contribute to the success of Australian products in the UAE markets.

For new products, Mr Meghnani says that testing the market with small quantities of product is the first step. If successful, they then take it to all their stores within the UAE. He notes that distribution in the UAE is not easy, nor is it cheap, noting an investment of around $35,000 to get into the entire market.

What You Need to Know

As with any market, it is important for suppliers to understand the market and the segment they wish to target. It is worth considering avoiding markets that are already flooded – ketchup, cereals and standard chocolates to name a few – and to focus on the growth markets of health products and organic products.

Australian suppliers will also need to have a good understanding of branding and label information, particularly since labelling needs to be done at the source rather than at the distribution centre. Products are required to have an Arabic label done at the source.

Being that the UAE is a predominantly Islamic country, it is important that suppliers have the correct Halal certifications on many of the products going into the country, particularly if they are not vegan products. This does require the supplier getting their products certified as Halal.

Regulatory Hurdles

Like many countries, there are regulatory hurdles that must be overcome for suppliers looking to enter the UAE market. Labels need to meet sugar tax and other tax registration, and as mentioned, there needs to be an Arabic label added at the source.

The Bottom Line

The UAE certainly has potential for those Australian suppliers who can meet not only the consumers wants and needs but also regulatory requirements. With the retail and grocery sector looking at the massive growth in the coming years, suppliers who can provide high-quality products, likely have a good chance of success.

The second online forum held by Export Connect was received very well , with plans to repeat these monthly.  We hope you’ve found this overview of our recent online forum on exporting into the UAE helpful. As always, if you’ve got any questions or want to discuss export opportunities for your company, feel free to drop us a line at Export Connect – we’d love to hear from you.