If you are a company that wants to enter the Saudi Arabian market targeting big players like banks, telecoms, oil and gas, real estate, manufacturing, and other companies, this article is just for you. Convincing decision-makers in those companies that your product or service is great and they have to purchase it is not enough.
If you are new to this market and want to sign your first big client, you will definitely face the procurement department, which can be as challenging as convincing the decision-maker to buy your product. So, in this article, I will talk about how to navigate through those procurement challenges.
I am going to share two personal stories, where one is a failure, and the other is a success. They will give a complete range of learnings on procurement issues in Saudi Arabia and the other GCC countries.
A few years ago, I had my startup aimed at providing some technology to telecoms in the GCC region to help them serve their customers better. I have approached all telecoms in Saudi Arabia, the UAE, and Qatar, and this is what I got.
I arranged a meeting with the Senior VP responsible for acquiring my technology in one telecom company. His feedback was great and he said he would love to work with me. To make it work, I had to pass the registration process of their procurement department. So, I contacted their procurement department, and they sent me all the forms and requirements. It took me two weeks to collect and prepare all the documents, and I finally submitted them through the electronic system.
Then I waited for months, and nothing happened. I tried to reach out to the procurement department, but they never responded to my emails. Then I started looking for someone who works in that procurement department so they can provide me with some assistance. I was lucky to find one manager working there, who told me I had registered in the old system and arranged a link to the new one. I submitted the registration form again and waited for another few months, and nothing happened.
At that time, I heard about several telecoms I had approached earlier to announce tenders for the same technology I was ready to provide without informing me or inviting me to participate in those tenders. These tenders were distributed among their certified vendors. So, I lost hope in telecoms, pivoted my startup to focus on other industries, and then closed it because of COVID-19.
I learned a few lessons from that story, which were confirmed by other cases I had with my and my client’s projects.
The first lesson is that if decision-makers say they want to work with you, that’s not the end until you pass the procurement registration. And if they don’t tell you they’ll help you through it, you are likely to be stuck like I was.
The second lesson is that if procurement does not register your company within a few weeks, and you don’t hear anything from them, your file is likely to have been put aside, and you need to take extra action to push it through.
Following up with people in procurement is useless most of the time because they are just following the orders of their supervisors as well as complying with procedures established in their company.
I have to say there have been major improvements in local procurement systems in Saudi Arabia: it has introduced a unified electronic platform called Etimad, where you can see all tenders of large companies and government entities and can register and submit your proposals online.
There is another positive story on how I managed to pass the registration, with some important learnings.
I was pitching my clients’ product to a large well-known consumer brand company. I had meetings with several VPs, whose feedback was generally positive but not too exciting. They promised to get back to me within a few weeks, but after a couple of months, they never did that.
Then, I decided to go to this company from the top, and through my network, I found a way to arrange a meeting with the company’s CEO. The meeting went extremely well, and I was asked to submit my registration as a vendor for the company. This time, I got registered within one working day. The deal was done, and we had a successful presentation of the product.
Not only from my own story but from the experience of many people I know, companies in the GCC region are quite vertically structured. It means that CEOs and COOs usually have the power to streamline your registration process by giving direct orders to their procurement departments. They also have the power to identify your product as unique, having no competition, or the one in which the company has critical and urgent needs. This will help you streamline your registration process and lead to a signed contract much quicker.
So, if you feel that your product is great and represents big value to your potential client, try to get to the big boss and get a meeting with them.
But what if your product is not that big to be worth the attention of the CEO? There is an alternative way to get through. If your registration with the procurement department is not working, there is a way for you to go to their registered vendors and offer your product or service through them. In that case, you will have to give up some part of your profit, but most importantly you will get a use case, which you can use to market your product to other companies within the same industry or to register with the same big client directly.
That was a simplified picture of the very complicated procurement system of Saudi Arabia and other GCC countries. I am sure that some of you may have your unique cases. If you need help with those, you can reach out to the CFC Big Ideas team and we’ll work on your challenge together.
