Zeynep Kosereisoglu, Director for Middle East Africa and Turkey Research at FrontierView, spent the month of May in Dubai meeting with clients to discuss the MENA region’s performance in 2023. Below is an exclusive look at the key trends, challenges, and a fresh perspective on opportunity in the region.

Insights from industry leaders in MEA

  • B2B firms were still experiencing relatively robust demand in H1 2023, benefitting from the wind of higher oil revenues trickling through to project expenditures. However, price negotiations and cheaper competition have been rising as the major challenges.
  • B2C firms on the other hand have been experiencing a slowdown in terms of volume of sales because of their price increases, especially those in the FMCG and semi durables segments. Premium consumer goods companies have generally reported a more resilient customer base, which has allowed for price increases and the ability to maintain volumes accordingly.
  1. Stabilization: The biggest emerging challenge for multinationals is the semblance of “stabilization” in global cost pressures, which is fueling push back from customers in response to upcoming price increases. Even with global prices on shipping, food commodities and fuel, lower relative to 2022, many companies are still seeing significant cost pressures.
    General sticky inflation, rental and talent cost increases, and varying degrees of supply chain costs all are creating pressures on profitability. However, as companies diverge in their cost structure and are less able to use global cost shocks for price negotiations, identifying the right price increase and communicating this to customers has become more complex.
  2. Capturing opportunity in the Gulf: From a market portfolio perspective, multinationals are massively increasing their attention, expectations, and investments into Saudi Arabia. Capturing the opportunity across the kingdom, as well as the UAE, are the top areas of focus.
  3. Managing risky markets: Meanwhile, the operating challenges in Egypt are becoming more acute, with firms – even selling basics, such as food and pharmaceuticals, are experiencing extremely severe payment delays and FX access issues. Executives are reducing exposure to the market and focusing on a narrow resilient customer base if they can, or simply even reducing selling in the market until the FX availability improves.

2024 planning is happening now. As you refine your one-, three- or five-year plans, it’s important to think carefully about the Outlook for MEA, and the impact of local ebbs and flows on inventory, pricing, and your ability to hit your short, mid, and long-term targets. Against the backdrop of our post-pandemic, post-inflation-shock “new normal” for the global economy, FrontierView is standing by to support you.

At FrontierView, our mission is to help our clients grow and win in their most important markets. We are excited to share that FiscalNote, a leading technology provider of global policy and market intelligence has acquired FrontierView. We will continue to cover issues and topics driving growth in your business, while fully leveraging FiscalNote’s portfolio within the global risk, ESG, and geopolitical advisory product suite.

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