CEO of the technology company Bayzat
Research Summary: The Greek Presence in the UAE
The activity of the Greeks and the Greek Business abroad is one of the areas that hasn’t always been researched and analyzed in much depth. Specifically, apart from the research reports of IOBE (Foundation of Economic and Industrial Research), concerning the Greek Business activity in a national level, research in Greek Bilateral Business Activity is almost non existent. Given the fact that more research is need in this area, Dr. Konstantinos Tsanis, who lives and works in the UAE, along with researchers from the Universities of Edinburgh and St. Andrews, conducted a large scale research project (511 participants, working in –among others -68 Greek businesses), between March and October 2016, which is summarized in the following sections. Greeks Population in Emirates: Constantly Increasing The precise number of the Greeks living in the UAE isn’t known, as this data isn’t made publicly available from the local authorities, and its not documented from the Greek authorities. Based on different estimates from Greeks living in the Emirates for long time, this population is between 9000 and 10000. Concerning this specific research, from the 511 participants, 45.4% were men, and 54.6% women. Considering this sample as representative, based on common statistical methodologies, the majority of the Greeks living in the Emirates is between 30 and 40 years old (39.2%), while these belonging in the age group of 40-50 are 36%, as it can be seen in table 1. 55.1% is married, 37.4% not married yet, and 7.4% divorced.
The level of education and the industry in which Greek residents of the UAE are working is particularly interesting: In accordance with existing studies in the higher level of education, relative to other countries, 90.2% has at least a University degree. Specifically, 52.6% has a masters degree, 30.6% university degree, and 7.1% doctorate degree. Furthemore, as it can be seen on table 2, the sector in which most Greeks are occupied is the construction industry (26.9%), followed by tourism (13.2%), education (8.4%), general trade (8.4%), and the wider sector of services (7.2%), among others.
Greek Business Presence in the UAE: Making the most of the competitive advantages of Greece The presence of the Greek companies in the UAE is also quite significant (defining Greek companies based on the nationality of their owners, not the location of their headquarters). Similar to the case of the Greek population, their exact number isn’t known. Based on estimates from experts however, their number is around 300, with the majority of the companies occupied in the following industries: Food, Shipping, Clothing (Furs), Construction and Tourism. It needs to be mentioned at this point that from the 511 participants of this study, 108 of them work in 68 Greek companies. In terms of the entry mode of Greek companies in the UAE, as it can be seen from table 3, 44.4% of the companies entered the market by forming a joint venture with a local partner, and 41.7% by opening an autonomous entity through direct investment. The reasons that made Greek companies enter the UAE are quite interesting. As it can be seen on table 4, 33.9% of them did it to try to ‘’increase their sales’’. 14.1% did it in order to offer a specialized “unique product” in the local market, 13.8% did so because of the limited opportunities in the Greek market, while 11.2% appears to have it as a part of a wider strategy for entering new markets. It needs to be acknowledged at this point that this specific categorization might come across as very detailed, as it is based on academic research classifications, within the field of internationalization strategies.
Table 2: Sectors in Which Greek citizens in the UAE are occupied in
|Sector that the company you work for belongs to:||Percentage||Nr. of responses|
Table 3: Entry modes of Greek companies in the UAE
|How did you enter the UAE market?||Percentage||Nr. of responses|
|Autonomous company through direct investment||41.7%||45|
|Licensing of franchising||2.8%||3|
Table 4: Reasons for internationalization of Greek companies
For which of the following reasons did your companydecide to enter the UAE market (please choose up 3 reasons)?
|Percentage||Nr. of responses|
|Enter new markets||11.2%||34|
|Specialized <unique> product||14.1%||13|
|Technological advantage of the company||1.9%||15|
|Increase regional knowledge||2.6%||8|
|Will to expand company for internalization||0.7%||2|
|Economies of scale||0.0%||0|
|Reputation of the company||1.3%||4|
|Access to international resources||3.6%||11|
|Will to learn from the new market||0.0%||0|
|Pressure because of intense home county competition||13.8%||42|
|Residual production capacity||0.7%||2|
Table 1 Age distribution of the study’s participants
|Age group||Percentage||Nr. of responses|
Having presented some quantitative information on the Greek business activity in the UAE, in the following paragraphs some qualitative analysis on the most important sectors is presented. These sectors have had the highest revenue, in terms of bilateral trade, in the last five years. Food Exports Food exports, as it has been previously documented, are one of strongest industries of the Greek economy. Many companies have focused in the production of traditional food products (Feta Cheese, High Quality Olive Oil), in production of frozen foods, and in vegetables and fruit exports. However, as it happens in other markers as well, their relatively higher production and distribution costs results on them being priced quite highly compared to similar products from other countries. Simultaneously, ‘Healthy Living’, is still a relatively new concept here, and not that familiar to the local populations, thus allowing for a small market for the companies who are competing on this field. Shipping As expected, the shipping industry has quite a strong presence in the Emirates, which, in the recent years, have developed to one of the most important global shipping hubs. Specifically, Greek companies have developed strong presence in Fujairah, which is a hub for the shipping companies specializing in oil and oil products transportation, and in Dubai, in Jebel Ali, which is a hub for the commercial ships. The first Greeks arrived here 25 years ago, and at the current moment around 100 Greek families live and work there. Simultaneously, almost all the large Greek shipping companies have presence there, either through a subsidiary, or with a local representative. Shipping specialists within the UAE believe that there is large potential for further development, and are expected that the recently developed Maritime City will be among the most important global hubs, in terms of the commercial value being transported, between Europe, Middle East and Africa. Clothing (Furs) The value of the furs being sold in the UAE, made in Greece, has been quite important , in terms of annual value of transactions. Specifically, between 2008 and 2013, they made 20-30% of the annual trade. The consumers were mainly Russian citizens, who have a special appreciation about furs, and are willing to spend the money required to purchase them. However, as the Russian economy has been hit from an economic crisis the last 3 years, the value of the total sales has decreased by 80%. Oil Products One of the sectors whose trade value has increased significantly in the recent years is the refining of oil product. This sector has to do with the processing of oil products in Greece, which are then sent back to the UAE, in order to then be distributed to the global markets. The trade value of this sector has increased a lot in the recent years, reaching 30-35% of the annual trade values. This happens specially because there aren’t many oil refineries with close proximity, which, combined with the residual capacity of the Greek refineries, allows for a perfect match of demand and supply. Greeks in Emirates: Strong presence, with a clear growth potential As presented in the previous paragraphs, the Greek population has a significant presence in the UAE. The close proximity of the UAE to Greece, as well as the somehow similar business practices, and everyday habits, make clear the opportunities arising for further growth and development, especially at these times, where the need for expansion out of Greece is needed more than ever. A strong prerequisite for that is the development of strong relationships in a national level, so that there will be strong fundamentals to support the growth of the economic activity between the two countries.
"The close proximity of the UAE to Greece, as well as the somehow similar business practices, and everyday habits, make clear the opportunities arising for further growth and development, especially at these times, where the need for expansion out of Greece is needed more than ever."
*Dr. Konstantinos Ilias Tsanis is the CEO of the technology company Bayzat, who has been recognized from the Forbes Magazine as the fastest growing company in the Middle East. Previously he worked as a Business Development Manager for Middle East and Africa with Bloomberg LP. He is also a Research Fellow at the University of Edinburgh and a Strategy Consultant with Kaiser Associates. Detailed results of this study will be made publicly available on Spring/Summer 2017.