The six gulf countries (Saudi Arabia, the United Arab Emirates, Qatar, Kuwait, Oman and Bahrain) have an internet penetration rate of at least 84%. Also, these gulf countries have recorded an ARPU (Average Revenue Per User) of about US$20, which puts it amongst the highest in the world.
As local Internet businesses develop slowly (due to lack of investment and human capital), and the Western enterprises are not highly localized (lack of interest, and perceived risks), this has created an excellent opportunity for a Chinese-led entry and investment into the region.
Entertainment under cultural and religious constraints
Many of our colleagues once worked in the Middle East. Because of culture and religion, there are limited means of “offline and physical” entertainment in the Middle East. Unrelated men and women are forbidden to have intimate contact. In addition, there are few places for public entertainment in the six gulf countries. Shopping malls and restaurants are also designed to separate men and women.
But, it does not mean that the general population do not seek trendy apparels, or other forms of entertainment. Infact, Saudi women, for example, often wear delicate heels, shiny nail polish and golden chains under their black robes.
The needs for entertainment and social interaction with the opposite sex are gradually brought online through various means.
In Saudi Arabia, for example, 95% of its netizens watch online videos – ranking it the world’s first. Saudi Arabia also has the world’s seventh largest number of registered social networking users, with an average of seven accounts per person, according to Go-Gulf.
The Middle East makes an excellent market for for businesses that combine both video content and social elements. Among all products, the most popular live broadcasting platforms are BIGO LIVE by YY Inc., and 7 Nujoom by Fission Technology. Both companies focus on overseas markets. But how did they win users in the Middle East?
BIGO LIVE: meet online social needs
BIGO LIVE is an example how YY expands into several new overseas markets by relying on the technological and operational experience accumulated in China. Combined with many social and interactive features, it builds up a social network in the virtual world.
The rank of BIGO LIVE in social networking category, in the Google Play in major Middle Eastern countries. It ranks the top five in Gulf countries, the United Arab Emirates, Saudi Arabia and Qatar. (Source: App Annie)
There are many online groups in BIGO LIVE. If the anchor in the group starts live broadcast, the rich users in the group will give gifts to the anchor. The rich users can make anchors famous, or otherwise. Groups will compete with each other to see which anchor receives most comments and gifts.
BIGO LIVE also has multiplayer chat rooms and random matching. In addition to anchors, other people can communicate with each other through video and voice, rather than text alone. As a result, the network of users is gradually formed.
7Nujoom: respect local cultures and localize the product
If BIGO LIVE is a versatile player in the international markets, then 7Nujoom is a sophisticated player focusing on the Middle East. Its localized operation is reflected in the following aspects:
- Seeking local partnerships
On 7Nujoom, there are anchorwomen without headscarves. This is because in Middle East, though the gulf women need to wear all-black clothes, women in relatively open north African countries, such as Lebanon and Egypt, don’t have too many restrictions in clothes.
In response, 7Nujoom’s strategy is to generate revenue in the rich but conservative gulf region and recruit anchors in the open North African region. The first is to set up a local team. Second, it works with Rotana, the biggest local entertainment group, to create synergies in networking and resources. The third is to seek advice from other Chinese companies that expanded and developed local markets earlier.
- Localised product design and experience
7Nujoom has runs a local team to design features purely catering to Arabic speakers. The Chinese team is also proficient in Arabic, making cooperating with the local team possible.For example, 7Nujoom’s UI, text, and icons all follow the local “right-to-left” reading habit.
Gifts are also designed according to local customs, such as little camels. During Eid al-Fitr, 7Nujoom also organizes online and offline activities such as concerts and lantern collection, and encourages anchors to do charity work during the festival to build a good brand image.
SWOO: the local rising star
Momentum Works learn that although Chinese enterprises performed well in the localisation of live broadcasting in the Middle East market, there is still room in the market, creating opportunities for local players.
Momentum Works recently spotted a rising star, SWOO, a live-streaming product developed by a local company in Saudi. In just eight months after its launch, it has gained 4 million registered users. According to Similarweb, SWOO is the sixth most popular social app in Egypt.
The secret is that SWOO focuses on high quality content and professional anchors (hosts). The certified anchors are mainly professional experts in technology, food, fitness and tourism. At present, SWOO also voiced plans to cooperate with schools, and educational companies.
Conclusion
Momentum Works believes that to succeed in the Middle East, companies must first learn to respect and adapt to local customs. It should also be very careful not to violate religion.
Businesses entering Middle East need to invest on connecting with local communities and build up trust with local talent and partners. Team and product localisation is important for cooperation.
In addition, content regulation should be a norm – in order to effectively avoid risks of consumer backlash and government intervention.