Casablanca and Tangier are the primary ports of entry for foreign manufactured goods for direct distribution. Ferry services between Morocco and Spain allow goods to be imported and exported by truck. The Tanger Med port on Morocco’s Mediterranean coast, has a throughput capacity of fifteen million containers annually, allowing it to surpass the Mediterranean’s largest ports Algeciras and Valencia in terms of container capacity.
Using an Agent or Distributor
Morocco has an established distribution system with wholesalers and dealers. For technical products, after-service sales support is key to attracting customers.
For example, there is a well-developed software distribution network supported by IT integrator companies and resellers of multiple types of software products. Pharmaceutical sales are also supported by a well-developed network of pharmacies. For a U.S. exporter, it would be relatively easy to identify the major players in these sectors. However, other types of products are still distributed through very fragmented market channels. Hardware store items, for example, are available in stores smaller than 100 square feet and in large chain stores. Selling into these markets requires dealing with several key buyers or working with an intermediary or wholesaler who has access to a broad base of smaller shops.
Establishing an Office
Morocco’s sixteen Regional Investment Centers (CRI) are the government’s “one stop shops” for the entire registration process. The CRIs are required to provide a registration certificate within one week of receiving a completed application, which includes a passport or other form of ID (or a copy of an ID document if the applicant is not personally present) and payment of the registration fee. If the approved certificate is not retrieved within one month, it automatically becomes void, and one must begin the process again. All businesses are subject to inspection by the CRI.
The link to the “World Bank “Doing Business in Morocco” guide” to opening a business is below.
Business Enabling Environment (worldbank.org).
Consult these websites for additional information on the CRI:
- Morocco Now
- CRI de Casablanca-Settat (casainvest.ma) (the CRI for the Casablanca region).
For the latest Investment Climate Statement (ICS) which includes information on investment and business environments in foreign economies pertinent to establishing and operating an office and to hiring employees, visit the U.S. Department of Department of State’s Investment Climate Statements website.
Franchising
Over four hundred franchises currently exist in Morocco; nearly 40% are French. U.S. franchises hold the third position in the market, after France and Morocco, with nearly 12% of the market share. They operate in the fast food, clothing, office supply, furniture, cosmetics, real estate, office cleaning, and auto repair sectors. Master franchise holders are attracted to the marketing image and name recognition of well-known U.S. products and brands. In recent years, several malls have opened in Morocco including the Morocco Mall in Casablanca, which is North Africa’s largest shopping center.
Over the past decade, Morocco has enjoyed stable annual growth. Moroccans, joining the middle class in increasing numbers, desire convenience and demonstrate keen brand awareness. Franchise outlets are concentrated in metropolitan Rabat and Casablanca due to higher population density and purchasing power. Other urban centers with franchises include Tangier, Tetouan, Marrakech, Agadir, Fez, and Meknes.
Franchising in Morocco is appealing to an expanding base of young entrepreneurs, many of whom are U.S.- educated and have the financial means to develop master franchises. Franchising is also seen as an efficient way to promote small business creation and employment in Morocco.
Challenges:
- Weak trademark protection.
- Counterfeit products within the market (especially in apparel).
- Limited financing options: while banks are often comfortable with financing franchises, financing typically excludes franchise fees.
- Lack of a well-defined franchising regulatory framework.
- Dense regulatory system for leasing store space.
Opportunities:
The sectors of interests to Moroccan franchisees are:
- Restaurant/beverages
- Apparel
- Education/training (languages, executive training, and higher education)
- Supermarket, hyper-market chains
- Housewares and linen retail
- Temporary employment services
- Business building management services
- Entertainment (movie theaters, theme parks)
Resources
Moroccan Association of Franchises (Association Marocaine des Commerces en Réseau, AMCR) :
www.observatoiredelafranchise.ma.
For more information about future Franchising Trade Shows in Morocco or information on legal firms specializing in Business Transactions and Joint Ventures, contact the U.S. Commercial Service at Office.Casablanca@trade.gov.
Direct Marketing
The Moroccan market is split between the urban wealthy and middle class and the poorer rural communities; therefore, marketing campaigns must be targeted accordingly. Marketing may include point-of-sale promotions, rotating billboards, direct mail, and door-to-door sales. With an adult literacy rate of nearly 74%, and knowledge of Arabic and French varying widely, promotion campaigns are often image focused. Three-dimensional product mock-ups are often used to introduce new products and sustain brand awareness. Marketing services and advertising agencies are increasing their use of direct marketing. Flyers are often distributed directly to consumers in public spaces.
There is a strong focus on internet and mobile phone promotions. In both of these mediums, it is possible to target consumers directly based on past purchasing habits. This segment will become increasingly important due to the growth in the number of young people in Morocco who rely on mobile phones and the internet for entertainment and information. Young adults aged 15-29 make up almost 26% of the total population (https://www.cia.gov/ ). Morocco has a high per capita internet penetration in Africa at around 83%.
Joint Ventures/Licensing
Companies, both private and state-owned, as well as wealthy investors, seek joint venture business opportunities with U.S. partners as a way to modernize Moroccan factories, license new technology, and create employment. Competent law firms exist in Morocco capable of negotiating joint-venture agreements. See the ‘Investment Climate Statement’ chapter for more information on investing in Morocco.
Express Delivery
Reliable courier services are available in Morocco through both international and local express delivery services. Moroccan Customs officials check all parcels, and a duty or tax fee may apply depending on the value, provenance, and the nature of the merchandise. International shippers such as DHL, FedEx, and UPS are established in the larger urban areas.
Due Diligence
Potential U.S. investors in Morocco and U.S. exporters of goods and services should perform due diligence on potential local agents, partners and customers, particularly when extending credit. There is a central repository of information on Moroccan companies under https://www.directinfo.ma/. This government-maintained repository lists the tax filings, balance sheets, and profit and loss information for a large number of Moroccan companies. The portal is not comprehensive, but information for most large companies can be found. There are also independent credit ratings companies that can be contracted to execute a credit evaluation.
U.S. firms, especially those with no previous Morocco experience, should consider the U.S. Commercial Service’s International Company Profile (ICP) service prior to signing any agreements. The ICP provides information on the reputation, reliability, and financial status of a potential partner in a confidential report, along with a recommendation from the U.S. Commercial Service as to the partner’s suitability.
For more information, please check the following link, or contact us at Office.Casablanca@trade.gov
Advise companies on need to perform appropriate due diligence on their business partners and agents [and in what areas it is necessary for a U.S. company]. Include information on Commercial Service International Company Profile service (ICP).