Regional businesses should aspire to internationalise through alliances, technology

Ninety per cent of the businesses in the Middle East region are classified as small and medium enterprises (SMEs). In their next wave of growth, these businesses stand to gain substantially from adopting strategies to grow internationally, with the help of their logistics providers among others.

Currently, five per cent of the SMEs in the region can be classified as “scale-ups” – otherwise described as companies with proven business models that are undergoing a rapid growth phase.

These are the businesses that are ripe to take advantage of the possibilities offered by growth and expansion beyond domestic borders, especially if they are bringing something unique to the market.

The increasing rate of technological change, globalisation of markets, and rising customization creates opportunities for businesses everywhere. Ultimately, how successful a business is, in terms of international growth, depends on the viability of the product itself, and how it fits the unique needs of customers. Technology adoption is a crucial step towards internationalization, allowing for faster communication and easier connectivity.

Advancements in technology also allows for more integrated supply chains, and increased visibility when it comes to product fulfillment.

Working with their logistics partners, businesses can deliver new opportunities including a better understanding of financial viability when distributing in-market or cross-border. Logistics providers offer access to a wealth of information and insights on trade, customs clearance, inventory management, storage, warehousing, and last-mile distribution.

Logistics companies have access to intelligence and expertise to guide their customers on matters related to trade laws and the implementation timeline for their internationalisation plans. Such insights can also guide a business on whether it should centralize inventories in these new international markets to be able to meet local demand in peak seasons or when customs procedures take longer than desirable.

Gaining access to a new market that consists of countries with various consumer preferences and national infrastructures means that businesses, in addition to accommodating specific cultural nuances, must consider a new set of variables.

These can include the mode of transport and various handling practices that are incorporated within the supply chain domestically; all these factors can be entrusted to the logistics service provider. SMEs must continue to operate their business models to gain the most from such collaborations with logistics providers; together, the collective power of technology, transportation, information, and ideas can compound and multiply.

Relationships within the logistics industry will continue to be the differentiator for SMEs in order to develop and make the most of their resources and assets as they enter new markets.

SMEs that have successfully scaled up in the GCC region will have a significant multiplier effect, supporting its diversification goals and the advancement of the non-oil economy.

Nathalie Amiel-Ferrault is vice president, customer experience and marketing at FedEx Express Middle East, Indian Subcontinent and Africa