Cracking the Code: How is the Middle East Shaping Global Business Strategy

News

1. Gemini Named Most Culturally Aligned AI in UAE’s First-of-its-Kind Index

2. UAE Approves National Encryption Policy for a Post-Quantum Shift

3. OpenAI API Users Hit With Third-Party Security Breach

4. Uber and WeRide Launch First Driverless Robotaxi Service Outside the U.S. and China

5. UAE Unveils Its First Marketplace for Buying and Trading Trademarks

6. ACI Flags Sharp Rise in ‘Friendly Fraud’ as Thanksgiving–Cyber Monday Spike Looms

Success in one market doesn’t guarantee the same in another. This is a practice mastered by Netflix. The ability to pivot, stay ahead of the competition, set trends, and recover from downturns has made it a global leader in online streaming, even after a modest DVD-rental subscription model.

​In 2006, the retail giant, operating a chain of hypermarkets, discount department stores, and grocery stores in the US and 23 other countries, made a rare admission to exit Germany, after struggling to make a mark in the market for nearly a decade. Walmart, despite being a success across major global markets, realized its model of converting a country’s shoppers and regulators to its low-price, American-style trading was not being accepted by locals.

Why the Gulf Market Matters

The Middle East is a key market for global players. The region holds global influence due to three key factors: its vital role in the global energy supply chain, the massive financial resources managed by its sovereign wealth funds, and its strategic location as a major trade and logistics hub connecting three continents.

However, to succeed in the Middle East, companies must be aware of the region’s unique socio-economic, cultural, and regulatory landscapes. ​Let’s take a look at foreign players who have had to adapt or modify their offerings to remain competitive in the region.

The Localization Playbook

The region heavily prioritizes its cultural norms and respects cultural adaptation. The key strategies for entering the Middle East market include cultural alignment, legal setup, and digital growth, all of which contribute to lasting business success. 

The market is unique due to its blend of deep-rooted cultural traditions and rapid digital transformation, a young and digitally savvy population, and a strong emphasis on personal relationships and hospitality.

​“Leading companies rotate to new opportunities successfully not despite their legacy businesses, but because they strengthen them to release the resources needed to scale new business activities,” says Accenture veteran Omar Abbosh.

1. Acquisitions and Agreements

Much like Walmart, a similar phenomenon occurred with Uber, as it exited promising markets such as Russia and China. And a similar fate awaited them in the Middle East after its 2013 debut. It failed to dominate the market against a six-year-old startup, Careem.

In 2019, Uber acquired Careem in a $3.1 billion deal, making it a wholly owned subsidiary of the ride-hailing giant. ​As of 2024, Uber holds the leading position in the Middle East ride-hailing market, with over 43% market share, mainly through its subsidiary Careem.

​E-commerce platform Amazon also grew its presence in the region by acquiring local Souq.com. “Souq.com pioneered e-commerce in the Middle East, creating a great shopping experience for its customers. We’re looking forward to both learning from and supporting them with Amazon technology and global resources,” said Russ Grandinetti, Senior Vice President, International Consumer, Amazon.

2. Data Sovereignty: Due Diligence  

UK-based IT firm RedoQ entered the market aware that its approach would need to be informed by a cultural lens. The region is going strong on advocating for data sovereignty, a concept that data is subject to the laws of the country or region where it was generated. A growing momentum is being led by Saudi Arabia, the UAE, and Qatar, driven by their need to control data generated within their borders for national security, economic growth, and digital trust reasons.

McKinsey notes that localization rules have forced companies to develop IT architectures tailored to specific countries. ​RedoQ tweaked its offering to comply with the region’s data sovereignty requirements. “The product was architected for data sovereignty, ensuring customer data is stored and processed within specific Gulf-based data centres to comply with local regulations such as the UAE’s PDPL and Saudi Arabia’s PDPL,” says Dipal Dutta, CEO, RedoQ.

​Software firm Zoho entered the region in 2023 and, much like RedoQ, realized the importance of data sovereignty. It inaugurated its first two Middle East data centers in Saudi Arabia (Jeddah and Riyadh) to ensure that local data is stored within the geographical boundaries of the kingdom, in line with the Personal Data Protection Law (PDPL).

​“With our philosophy of transnational localism, we are committed to building strong roots here to serve the businesses and the community long term. We are here to stay, build and serve,” says Sridhar Vembu, CEO and co-founder, Zoho Corp.

​Large technology companies, such as Microsoft, have also adjusted their models to comply with this practice. The company announced that it would process its generative AI solution, Microsoft 365 Copilot, within the UAE to provide public and government entities with complete control over their data.

3. Design Inclusivity

For a company to establish a foothold in a market and expand, it must commit to providing an accessible and inclusive digital experience that is equitable and user-friendly for all. To deliver inclusivity, designs must address the needs of people of all ages, abilities, and technical skill levels.

​“The integration of full, native Arabic language support is primarily a fundamental market prerequisite for effective regional entry and scale,” Dutta says, adding that while English gets you a foot in the door, native Arabic is needed for achieving mass user adoption, securing government contracts, and compliance with official documentation standards.

​This understanding led the IT firm to extend its support for simple translation to include a Right-to-Left (RTL) interface design, consideration of local dialects for conversational AI, and Arabic language support for all product documentation.

4. Localized Offerings

In 2015, Indian gifting company Ferns N Petals entered the Middle East market. The customer base was quite a contrast to the home ground, as it was a cosmopolitan country with people from almost all parts of the world. “Our plans had to keep this diversity in mind,” said Rajesh Kumar, CEO, GCC and South East Asia, FNP, in a press statement.

The company overhauled its entire product line and introduced new verticals and catalogues to better serve the country. The fresh lineup included popular flowers such as tulips and sunflowers, along with others, in a pastel colour palette, with perfumes or attars being a popular choice of gifts among Emiratis.

Having entered the market in 2019, Shan Kadavil and Mathew Joseph of FreshToHome, a meat delivery startup, were confident of capturing and dominating the segment, much like they had in India, within just three months of operations. In reality, it took a little over a year to generate significant revenue from the region. 

In 2023, approximately 12% of the company’s $130 million annual revenue came from the UAE. 

Kadavil advises D2C founders to focus on two key aspects when entering a new market: understanding the local buying culture and building a robust local support network. 

In this case, Joseph permanently relocated to the UAE, building a team of 400 people and rebranding the startup as a premium brand, evaluating the ability and affordability factors of the target audience. 

The meat delivery startup is now seeking up to $50 million in funding to expand its business in the region.

With the UAE having one of the highest expatriate populations in the world, comprising nearly 88% of the population, the visa platform Atyls is working to simplify visa applications. “This diversity creates a wide range of nationality-specific visa rules and requirements,” says Mohak Nahta, CEO & founder, Atlys.

The UAE has emerged as Atlys’s second-largest market after India.

Atlys creates a singular digital journey unique to an individual. For this, the platform consolidates documents, captures exact requirements by nationality, and provides transparent status updates throughout the process, making it a smooth and faster process. 

“With its digitized visa flow and built-in transparency, Atlys aligns with Dubai’s paperless government vision and the Emirate’s broader Digital Strategy,” Nahta adds. 

The evolving offerings underscore the Middle East’s rise as a major market—one where global companies must adapt to thrive amid growing economic sophistication and a discerning consumer base that increasingly sets the terms for foreign players.