There are a variety of selling factors and techniques to keep in mind when doing business in the UAE.
Understanding the business culture of the UAE is crucial to success. The UAE business style emphasizes personal relationships and integrity. Because the personal relationships emblematic of the UAE business environment take time to nurture, it is important to invest time in the market, establish a local presence or, at the very least, make frequent contacts and visits. Face-to-face contact and participating in local trade events are essential.
Culturally, the UAE is relatively less conservative than some other Gulf States. English is widely spoken but sensitivity to local traditions and Islamic beliefs remains essential. The use of Arabic in packaging and advertising is desirable and effective (and sometimes mandatory) in marketing consumer goods.
There is a growing emphasis on quality, after-sales service, maintenance requirements, and cost. U.S. products and services have an excellent reputation for advanced technology, quality, and durability. However, U.S. companies face tough competition from foreign companies that may have a larger or more active presence in the region or offer lower prices. Providing after-sales maintenance services is essential and can be supported by establishing a presence in the UAE or appointing a trained service agent. A local sponsor, agent, or partner can help with access and influence in relevant business circles, distribution channels, and customers.
Price is an increasingly important factor in the UAE. For selling to traders, an important business model in the UAE, there is no substitute for being price competitive. Government procurement also places heavy emphasis on selection of the low bidder and bidders with a presence in the UAE market, as long as the lowest price bidder is compliant with all technical and vending specifications.
The UAE is a regional trade hub with a long tradition of trading with South Asia, the Gulf, and East Africa. The UAE still serves those traditional markets along with those of North, South, West, and Central Africa, and the rest of the Middle East.
Trade Promotion and Advertising
The UAE, and Dubai in particular, serves as a commercial center for the region. From late September through May, the UAE hosts many well-attended trade exhibitions and conferences. These trade events attract an impressive number of exhibitors from the region and around the world, providing all international firms the opportunity to research the local market and evaluate the potential of their products or services before making a business decision.
Advertising plays a significant role in sales promotion. About 40% of the UAE’s population is native Arabic speaking, and Arabic serves as the official language of the nation. However, given the diverse population of the UAE and the large number of non-Arabic speaking residents, English serves as the business language of the UAE. Although the language of business is English, Arabic is the official language and is required for all governmental documentation. In addition, combined English and Arabic usage is common on signage and for many publications. English-only promotional literature is acceptable, but those that are in both English and Arabic have a decided edge. Arabic speakers in key decision-making positions appreciate the extra effort and sensitivity to their culture that bilingual publications imply. Arabic labeling for consumer products, especially foodstuffs, is an important requirement and an advantage in competitive marketing. Moreover, all foods and products claiming to be halal (often a prerequisite when selling to the 76% of Muslims making up the UAE) must bear the Halal National Mark and have certification to be sold.
There are several Arabic and English language daily newspapers and weekly and monthly magazines that are effective for consumer market promotion. Third-country language publications are also available. Below is a list of English and Arabic newspapers in the UAE. The mostly widely circulated English-Arabic newspapers are Gulf News, the National, and Khaleej Times. The Emirates News Agency (WAM) is the official news agency of the UAE. It provides daily news coverage of official and other events throughout the country. It is also a reference for UAE news for all mass media.
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Arabic Publications |
English Publications |
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Akhbar Al Arab (Abu Dhabi) |
Emirates 24/7 (Dubai) |
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Al Arabia (Dubai) |
Gulf News (Dubai) |
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Al Bayan (Dubai) |
Khaleej Times (Dubai) |
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Al Fajr (Abu Dhabi) |
The Arabian Post (Dubai) |
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Al-Ittihad (Abu Dhabi) |
The Gulf Today (Sharjah) |
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Al-Khaleej (Sharjah) |
The National (Abu Dhabi) |
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CNBC Arabia (Dubai) |
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Emarat Al Youm (Dubai) |
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WAM (Emirates News Agency) |
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By law, the National Media Council, which is appointed by the President, licenses all publications and issues press credentials to editors. Laws also govern press content and proscribed subjects. The National Media Council reviews and censors all imported media for content. This includes establishments in free zones such as Dubai Media City (DMC), twofour54 in Abu Dhabi, and RAK Media City in Ras Al Khaimah. These free zones are intended to attract media and marketing services, business and information services, news media, multimedia and internet, broadcasters, music companies, and production firms. In addition to tax benefits, companies operating in these free zones have been guaranteed that the government will not censor their news and information content, provided certain relatively liberal guidelines of taste and propriety are met. The content should not criticize leadership in the region, disparage religion, foment religious or ethnic hatred, or invade a person’s privacy. Cultural sensitivities should be kept in mind in all promotion activities.
Online advertising is increasingly prevalent throughout the nation and serves as the second-largest advertising medium in terms of revenue after newspapers. Social media has played a significant role in online advertising. UAE residents spend an estimated 3 hours and 11 minutes a day on social media, the highest average in the MENA region and 6th highest globally. This is largely due to the UAE’s significant 173% mobile penetration rate, which is the largest globally. Radio and television broadcasts are primarily in Arabic, English, Hindi, and Urdu and can also be considered as a medium for advertising.
Pricing
Price is a key factor in the UAE. There is intense price competition from foreign competitors. In many product categories, price is the key factor that buyers and consumers prioritize.
For consumer goods, price is the main consideration for middle and lower-income groups in the UAE. These market segments are served through small shops (referred to as “B-Category” stores) in traditional souks or markets, also known as baqalas. Retailers in this category operate under relatively lower margins and rely on fast-selling brands. The UAE Government has promulgated consumer protection laws to monitor the prices of consumer goods, advocate for healthy competition, and fight monopoly and commercial fraudulence in this sector.
At the other end of the spectrum are the segments of the society with high purchasing power, made up of largely of UAE nationals, white collar workers, businesspeople, and tourists. For this group, pricing is not always the primary buying factor and such retail outlets generally retain a high margin. These segments are serviced through Western-style malls and specialty shops (referred to as “Modern Trade Outlets”).
U.S. exporters should be ready to use pricing aggressively to encourage market acceptance of their products while keeping in mind various pricing factors, namely, listing fees (applicable per SKU’s), annual rebate (percent), non-return fee (percent), and annual promotional commitment ($ or percent), etc.
Once products are listed and depending on product categories, local agents frequently must negotiate space charges and need to appoint merchandisers for maintaining shelf space in stores and to ensure product facing. U.S. companies entering the market must be mindful of such costs, which may add approximately 25% to product costs, depending on turnover volume. The retail chain would then add another 20-25% profit margin to recover their costs.
The 5% VAT has been in effect since 2018 on most categories of goods with limited exceptions including basic food items, healthcare, and education. While there is no VAT on exports in the UAE, there is a 5% VAT on imports and domestic supplies with some exemptions.
As a stable economy with generally modest inflation, fluctuation of prices are generally not accepted by major retail stores unless substantiated with valid rationale. Even with circumstantial evidence for price increases, retail chains often insist on verification that such changes have been incorporated by their competitors before accepting any change. In some cases, U.S. companies may leverage UAE consumer perception of higher quality and higher transport costs for products from the United States, enabling pricing relatively higher than Indian, Chinese, Korean, and Japanese suppliers. Many European companies offer quality products and are tough competitors.
Sales, Service, and Customer Support
Customer service and after-sales service are crucial success factors in the UAE market. Business customers and consumers place a premium on service and support and will not accept substandard service. Having satisfied consumers who keep returning and recommending others is critical to business success.
Key Factors
Product availability and display. Companies selling through supermarkets and hypermarkets must be prepared to engage merchandisers to ensure prominent shelving displays and to optimize inventory reordering.
Appointed local UAE agents must be willing to undertake annual category management planning with retailers and participate in their national promotions and campaigns for greater product awareness and visibility.
Training of agent staff to ensure timely after-sales service is also of prime importance.
The principle of ‘consumer sovereignty’ is applicable in the UAE. According to the Consumer Protection Law, UAE consumers are granted the following rights:
Right to Safety: to be protected from products, production processes, and services that may cause harm to health and safety.
Right to Know: to know accurate information concerning the goods and services (ex: origin of products, expiry date, ingredients of food items, etc.).
Right to Choose: to have multiple options of items and services at competitive prices and quality.
Right to Representation: to express opinions to develop the goods, services, prices, and availability.
Right to Be Informed: to acquire knowledge and skill and awareness of consumer rights and responsibilities through continuous awareness programs.
In 2019, the UAE Cabinet approved a consumer protection law to align with the Unified Law on Consumer Protection of the Gulf Cooperation Council Countries (GCC). The new law aims to:
- Guarantee the protection of consumers and stability of prices.
- Ensure the delivery of goods and services according to production and distribution patterns tailored to the consumers’ needs.
- Limit practices that may have a negative impact on consumers and control increase in prices.
- Encourage sustainable consumption.
- Provide adequate protection to consumers in the area of eCommerce.
- Regulate the work of suppliers, advertisers, and commercial agents regarding consumer protection.
- Provide the necessary conditions for creating a free market where consumers are granted the right to choose freely with fair prices.
- Encourage the creation of a code of ethics for producers and distributors of goods and services.
Consequently, companies wanting to do business in the UAE are advised to:
Avoid misleading advertising and provide consumers accurate information. Establish clear policies regarding refunds, replacement, warranties for defective or damaged products and incomplete services.
Display prices clearly in UAE currency (AED) for goods and services in Arabic in addition to any other language.
Label the product condition visibly and clearly for sellers of used or repaired goods.
Offer products with valid guarantees and warrantees.
Guarantee service quality for a period of time. If services are not carried out with due care, the service must be provided again for free or refunded.
Ensure that employees knowledge is sufficient for the range of products and services offered.
The current business environment thus favors foreign companies that deal with local distributors with adequate parts inventory, regular maintenance capabilities. and after sale care.
Local Professional Services
The Business Service Providers (BSP) program is designed to help U.S. companies identify professional service providers to assist them in the assessment, completion, and/or financing of an export transaction.
Companies listed under our Business Service Providers are an experienced group of firms that offer useful services to individuals/companies interested in traveling to or doing business within the UAE.
Our Business Service Provider program provides a list of qualified professional service providers. Contact https://www.trade.gov/united-arab-emirates.
Principal Business Associations
There are a variety of business and industry associations and chambers in the UAE. This list is a starting point:
U.S.-UAE Business Council
2001 K Street, NW Suite 201 North
Washington DC 20006
Tel: (202) 863-7285, Fax: (202) 863-7289
Email: info@usuaebusiness.org
American Chamber of Commerce Abu Dhabi (AmCham Abu Dhabi)
P.O. Box 43710, Abu Dhabi, UAE
Tel: +971-2-631-3604, Fax: +971-2-633-0489
Email: director@amchamabudhabi.org
American Chamber of Commerce Dubai (AmCham Dubai)
P.O. Box 74648, Dubai, UAE
Tel: +971-4-242-0020
Email: info@amchamdubai.org
Federation of UAE Chambers of Commerce and Industry
P.O. Box 3014, Abu Dhabi, UAE
Tel: +971-2-621-4144, Fax: +971-2-633-9210
Email: info@fcciuae.ae
Abu Dhabi Chamber
P.O. Box 662, Abu Dhabi, UAE
Tel: +971-2-621-4000, Fax: +971-2-621-5867
Email: contact.us@adcci.gov.ae
Dubai Chamber
P.O. Box 1457, Dubai, UAE
Tel: +971-4-228-0000, Fax: +971-4-202-8888
Email: info.member@dubaichamber.com
Ajman Chamber of Commerce and Industry
P.O. Box 662, Ajman, UAE
Tel: +971-800-70, Fax: +971-6-747-1222
Email: info@ajmanchamber.ae
Fujairah Chamber of Commerce and Industry
P.O. Box 738, Fujairah, UAE
Tel: +971-9-223-0000, Fax: +971-9-222-1464
Email: chamber@fujcci.ae
Ras Al Khaimah Chamber of Commerce and Industry
P.O. Box 87, Ras Al Khaimah, UAE
Tel: +971-7-226-0000, Fax: +971-7-226-0112
Email: info@rakchamber.ae
Sharjah Chamber of Commerce and Industry
P.O. Box 580, Sharjah, UAE
Tel: +971-6-530-2222, Fax: +971-6-530-2226
Email: scci@sharjah.gov.ae
Umm Al Quwain Chamber of Commerce and Industry
P.O. Box 436, Umm Al Quwain, UAE
Tel: +971-6-765-1111, Fax: +971-6-765-5055
Email: uaqcci1@eim.ae
Limitations on Selling U.S. Products and Services
Business and government contracts must be in Arabic or Arabic and English. In cases of inconsistency or ambiguity in terms contained in English documents, the Arabic document would prevail. This may be challenging for foreign companies as they are dependent upon local support for translation work and documentation.