Capturing opportunities in Qatar

Qatar’s importance in your MENA portfolio will increase in 2023

Multinationals will need to work closely with their local distributors and partners to engage in a very targeted strategy of capturing Qatar’s opportunities. Key actions to consider:

1. Align with partners on cost increases on the ground, along with their outlook, as well as how distributors are managing these increases. Understanding which areas the partner is cutting costs from (e.g., marketing, headcount, and logistics) and guiding their focus will be critical. 
2. Work closely with distributors to align on pricing strategy. For B2Cs, we expect the government to maintain price controls over certain commodities, including essential goods. Work closely with distributors to better communicate price increase needs to customers and officials. For B2Bs, engage with distributors to encourage better monitoring of competitive price increases and train them to better communicate your value proposition. 
3. Update market size assumptions. For B2Cs, we expect expat dynamics to shift following the World Cup, with a decrease in blue-collar workers and a gradual increase in white-collar expats. Expect to see weaker purchasing power amid expats, as price sensitivity lingers. Align with distributors on periodic increases in demand as the country hosts a number of events. For B2Bs, identify priority government spending areas for increased revenues to be invested, and align across HQ and local partners on timelines for when the opportunity can be realized.
4. Update your product portfolio. For B2Cs, consider bringing in new products to justify price changes and better target specific customer segments. For B2Bs, ensure alignment with your product portfolio via product modifications to fit project demands.

Overview

Qatar is a medium-sized economy in the MENA region. While it has a small population and moderate economic activity size, Qatar’s importance in the MENA portfolio will increase in 2023. Some key regional markets, such as Egypt and Algeria, are struggling to deliver, creating the need to support portfolio growth in Qatar and diversify GCC exposure away from Saudi Arabia and the UAE, where competition is intensifying. Capturing any additional growth from Qatar will be critical in bolstering MENA portfolio performance, but MNCs will have to use targeted strategies to capture the narrow set of opportunities the country has to offer.

Our View

• Healthcare: Demand for healthcare services will continue to increase in Qatar, with the population estimated to reach 2.5 million by 2027. Healthcare needs are increasing; obesity affects nearly 35.1% of the adult population, with diabetic patients accounting for 16.4% of the total. Healthcare access is expanding, and Qatar passed a mandatory Health Insurance Scheme in 2021, requiring private health insurance for residents, expatriates, visitors, and tourists. Qatar Insurance Company (QIC) has introduced a digital insurance plan, whereby visitors with Hayya Cards can get a long-term plan valid until January 2024. Efforts to expand PPP use in healthcare are also becoming a priority. 
• Tourism: In 2021, Qatar Tourism launched a promotional campaign targeting 17 visitor source markets as part of the country’s tourism strategy, alongside investments worth US$ 45 billion in tourism, aiming to double the sector’s share of GDP over the next 16 years through investments from government and business. As such, Qatar has built a strong pipeline of hospitality-related infrastructure projects, including the Banyan Tree, Pullman West Bay, and JW Marriott West Bay hotels. After hosting the 2022 FIFA World Cup, Qatar’s tourism strategy will be event based for the next few years, including hosting major sporting events, as well as the Expo 2023 Doha, scheduled for October 2, 2023, to March 28, 2024.
• Retail: The country’s organized retail space is currently going through a period of rapid expansion, credited to a strong pipeline of projects in the run-up to several global sporting and business events that are set to take place over the next few years. Newly opened malls, such as Place Vendome, are focusing on higher-quality restaurants, entertainment, and leisure to complement their retail offerings. Alongside this, local businesses are preparing for the post-Ramadan season with plans to introduce new products, expand operations, diversify businesses, or move to better locations. 
• Oil and Gas: Revenues from gas exports amounted to US$ 132 billion in 2022. Qatar, having long been a major exporter of LNG to Asian countries, is poised to become a critical energy source for Europe, which is looking to lock in long-term supply deals for LNG. This could result in Qatar’s North Field East project being more balanced, with roughly half of its output flowing to Europe. The country continues its efforts toward capacity expansion, with investments in the North Field project, as well as investments in the Golden Pass LNG terminal in the US Gulf Coast region.
• Infrastructure: High energy revenues will continue to drive higher spending on infrastructure projects. The country’s main infrastructure projects include the completion of highways and the expansions of water and electricity networks. A major project that may be procured in 2023 is the second phase of the Doha Metro Project, which involves the construction of the Blue Line extension of the current Doha Metro network. Another project is the long-awaited Sharq Crossing—the multibillion-dollar construction of a three-part bridge connected via underwater tunnels that will connect Hamad International Airport with Katara Cultural Village.

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