Amazon & MENA eCommerce Market Prospects with Daria Tkachenko

Oleg: Hi everyone, welcome to Navigators. Today, we are happy to bring Daria into our conversation. How are you?

Daria: Good thanks!

Oleg: Daria helps brands to get to this amazing market, opportunities in the region that are very underserved in the Amazon community. So, I know very few people that work there, and I hope we can learn something very helpful and insightful. So, could you please introduce yourself and how you got to this region and how you got to the Amazon and e-commerce space?

Daria: Sure. First, thank you very much for having me. We are actually an analytic tool which gives data on different niches, market opportunities, etc. Originally, they started the China market in 2020 to work with Chinese cross-border sellers. Although we started to look into different markets and we realized there are a few markets we didn't cover yet, where we have corporate clients such as P&G, L'Oreal, etc., and also entrepreneurs. One of the markets was Soviet Union countries like Russia, Ukraine, Belarus, and Kazakhstan. The second exciting market for us was actually MENA because as a software provider, we need to choose some kind of market where we don't have much competition and also where we can see that the number of types of sellers is going to grow. We started our adventure in this region like one year ago, and we really see significant growth. They can see real potential for Amazon and for local player Noon as well. My personal experience, I used to live in China for 11 years. It was a really long time of my life. I also used to work in e-commerce during all of this space. I started to sell on marketplaces a long time ago, in 2011. I owned a fulfillment center, then I worked for a big Chinese company, etc. I used to work for a marketplace as well for many years. At some point, I just decided to start doing what I really like, and this is actually working with sellers, working with data, and helping companies to scale their business.

Oleg: Well, that's a great journey. I like to talk to people that have all kinds of different experiences because I believe the more diverse experience you have, you can be more creative as an entrepreneur, right? I'm really curious about what the main kind of problems or issues the brands from the U.S. or from Europe that want to enter this space are having, like just a few things.

Daria: Everybody thinks that this is an exciting market, that there are rich sheikhs that buy everything from everywhere. People also understand that it's a market of great potential because, for example, in Saudi Arabia, there is a population of 40 million people, which is very significant. Also, when you come into Dubai or Saudi Arabia, you can feel the prices because everything is quite pricey, so you can understand that the spend level is quite high. Even though the United Arab Emirates market is not that big, the beauty of the market is that it's pretty much consolidated. For example, for us as a resource provider, we work with companies who have regional headquarters in Dubai, and they cover all GCC, including Turkey and actually Pakistan. So for us, it's quite a good solution. In terms of logistics, Dubai is very ambitious. They built an ecosystem where they actually have a logistic hub and financial hub for the whole GCC region. For example, when companies start to consider working seriously in the region, they need to have a license. For example, when you start on Amazon, it's quite easy. You can start with a license from one of the 16 countries. Most of the countries, you can open their license and start to sell on Amazon just like that. But then the issue comes when you need to protect your brand. To protect your brand, the brand should be registered in the UAE, etc. In case of any server, at that moment, people consider opening their company there and opening a bank account there. Dubai is one of the best places to do this because there are very few taxes. It was a tax haven, but now it's like a nine percent corporate tax on revenue, although it's applicable only for those companies whose revenue is crossing over 100,000 USD.

Daria: It's a really great place, not only to consider being in the UAE but also to consider going to KSA, Gulf countries, and such. What companies usually don't understand is they try to first of all, like, check the data, check the database with other tools or with any other tool available in the market. They can understand what the size of their category, what the size of the niche, what potentially they're going to get out of the market. But the challenge is that not all of the market is consolidated around marketplaces. There are two main marketplaces, Amazon and Noon as a local player. There is also a D2C channel which every brand is going to take care of, maybe not from the beginning but eventually every brand takes this channel seriously.

Oleg: It's a similar story because I live partly in Europe, so all the European VATs are understandable for me. But when we help some brands from the U.S. get to European soil, it's getting a lot of frustration. So, I see it's like a parallel when you go to your area. It's the same, like different legal stuff, different financial stuff. But I believe you have all the providers that can help with all the organizations. And then you also mentioned some external kind of DTC traffic. What about the language and influencers, like Instagram or, I know in China, it's very different platforms, right? I'm mostly curious about the language issues. I understand in Dubai everyone speaks English, but still, you have to be Arabic, right? And the influencers?

Daria: Yeah, so basically, there are different influencers. The beauty of Dubai is that there are a lot of people who speak Arabic, although there are a lot of people who don't speak Arabic. A lot of people actually speak Hindi and Urdu. It's 40-40. So basically, India, Pakistan, and the rest is a mix of different languages. And when they talk about SEO in Amazon UAE, it's actually only in English. It's usually automatic translation into Arabic, although it can also be manually. And when they talk about Noon, there is more audience like local audience because they like to support the local player, more Arabic audience. But it's still, honestly, not the key factor which you are like to. For influencers, they are from everywhere, and some of them, that's true, they speak only Arabic because they have blogs in Arabic, but most of the especially big influencers, they usually have their blogs in English.

Oleg: Interesting. And what do you think of the size of the market comparison, for example, to Europe? You mentioned like 40 million people. It's more or less the size of the Germany market, right? But I believe there is a different kind of products have more demand, like there is less winter
clothes, I believe, popular. What do you think the brand that really can get to this area and feel less competition? Because I think the idea of new markets is less competition. For example, the U.S. is crazy competitive, Europe a little bit less. We have some players in Japan; sometimes it's like almost no competition from international brands.

Daria: So, if we look at the market totally, there are around 1 million sellers in U.S. Amazon, around 700,000 in Europe. There are millions of sellers in Southeast Asia and LATAM, around 4 million according to Statista. The reason why it's not a gated market is basically there are a lot of Chinese sellers which are not restricted yet; they can open a few multiple accounts. So, there's a lot of sellers; it's very intense. If we talk about MENA, Turkey, Pakistan, this region, we consider this region around the size of around 85 billion. If you compare this to Southeast Asia, Southeast Asia itself is around 170 billion, so it's basically half of Southeast Asia. But the number of sellers in this market is actually around 100,000. In the UAE and KSA only, the number of sellers on Noon and Amazon together is uh there and you know like try to understand how to how this work if they uh understand the market they go incorporate their uh separately so um basically because this is gated Market uh these local the very um very interesting like uh mixture of everything of different cultures uh there is like not much sellers who willing to work in such environment and also the market is quite underestimated by like local brand but by many Brands so for example uh we work with number of Brands like big Brands and they say like I was asking like why in the home appliance category the latest is actually not quite the same as anywhere so for example the guess what is the largest Home Appliance brand in the UI it's actually Black and Decker and I never saw it in any Market I used to work uh it's like very local phenomenal uh why so because they care about Market they uh I'm just like very aggressive on marketplaces so uh and and some kind of there are a lot of Turkish Brands there is like uh lots of small Brands so basically like from smaller Brand appliance the market looks like very very different like in terms of the market share of different brands if you compare it to Europe us or any in any other part of the world I guess except Africa or you know like uh in the uh other countries so um that means the small Brands it's actually they have a good chance to be uh very well established uh and you know they get in very sizable Market uh if they focus on the on this Market nice and uh yeah I totally think this is under um under violated Market yeah there's a lot of low hanging fruits and um and what do you know about the regulations because uh for example in Europe they have very strict to bring something new to Europe you need to have a lot of papers before in U.S it's easy you need to have a paper since up to you to have it before or a little bit later and how does it work in your area so uh in UAE it's quite easy uh so basically the government fee for certificate new certificate is around 50 Dirhams which is like basically 15 like very little money uh although they can ask you know like for example if it's like some specific like cosmetics and it has like multiple ingredients they can ask you know like for a certificate from of a region from your country or you know like or some specific test in the UAE uh but I guess if brand is okay if like it's uh like it's it's not it's not big money to be honest and usually uh this is all of the issues is uh is is is easy to solve for example we have a partner they uh actually uh doing fulfillment and certification uh and in part of those products so they launch uh around 5 000 SQ every month so you can imagine if they can launch a 5000 desk queue every month that means that actually it's like uh it's uh quite easy and cheap and they mostly focus on fcg so it's Cosmetics it's food Etc and another beauty of uh Yogi Market that you actually uh you don't need to have the sticker even sometimes uh on your products or you need just have the sticker uh but packages could remain the same so you don't need to do any kind of uh any kind of changes before you start to sell.

E-commerce in the region are developing very fast so we have like a number of [Music] clients who need to list a lot of products and also this is the specific if of GCC Market to be honest because if you're a seller like for of generic products let's say uh there is like very a little number of products we generate in like very high revenue for example in Amazon us you can launch a few bestsellers uh and it's gonna bring you Millions right if if if it's like becoming big ndcc because of the market is not that big so especially in the uie so the the the there are limits on your growth for each SQ so what sellers do they actually launch more sqs so they have like wider wider portfolio to in order to to to to to have a good Revenue um and what we do usually be because we asked describing right like basically all of the data so they have all the pictures of like everything all the uh descriptions and play it using that kind of big data we can play and they can give it to the Ai and just generate really amazing descriptions uh and do it in bulk like basically like if if there are like large number of skus need to be uploaded uh it's for us it's easy to generate uh everything in terms of text uh content and uh in terms of pictures we are now working the integrated one of the AI so it's also going to be available for our clients to just to to to to change the pictures to change the background this is stuff it's already in the market I'm sure it's like kind of boring but it's actually what what clients need um then they are trying to build something scalable and the other thing what we now doing now it's actually maping data between different marketplaces uh this is more like big clients ask but uh I'm sure for small clients it's also that it's going to be much more easy much more much more uh Pleasant to use this thing so basically when you see your SKU and your competitors on different marketplaces in the One dashboard it's kind of also very boring technical task but uh for those who operate marketplaces and have a lot of products in their portfolio it's like something kind of helpful yeah but I think this is a big part of uh of all the game on marketplaces and in general in Commerce you cannot be in the world right you always need to compare yourself to others and it's very Dynamic correct correct of course yeah thank you very much

Oleg: It was pleasure talking to you I personally learned.

Daria: It was nice talking to you !