In 2014 a Ukraine-based manufacturer of ultrasonic flow meters addressed us with a request to support their expansion into the UAE, Saudi Arabia, and other GCC countries. The company had a proven track record in Central Asia and sought to replicate its success in the Arab Gulf.
Market Entry Strategy
Our engagement began with identifying key client segments. Given the ongoing construction boom across the region, we targeted engineering and contracting firms working on large development projects. We also identified regional equipment suppliers serving these contractors as potential partners, aiming to integrate the client’s products into their distribution pipeline.
Over a 12-month period, we facilitated more than 30 in-person meetings with potential customers and partners across the UAE, Saudi Arabia, and Qatar.
The Product-Market Fit Challenge
Despite initial interest and securing participation in over 10 major RFPs, as well as two pilot projects, the company was unable to secure any confirmed orders.
The primary obstacle was the product-market fit. GCC markets were dominated by Chinese-made electromagnetic flow meters, which—although less accurate—were significantly cheaper and already widely adopted. In addition, the Ukrainian flow meters required additional certifications to qualify for many tenders to compete with more expensive ultrasonic meters produced by global manufacturers and used in projects, where high-quality measurements were compulsory.
But lack of certification, and the high cost of it, prevented the client from making a decision to apply for it. So the only way for us was to look for projects in which the high measurement accuracy was required, while international certification could be omitted.
We were actively looking for such projects across three countries – UAE, Saudi Arabia and Qatar, and also secured some RFPs and test projects, but those did not lead to any confirmed commercial orders.
Lessons Learned: Understanding the Nature of Competition
This project highlighted several critical insights about the competitive dynamics in the GCC:
Competition is multifaceted. It’s not just about price and quality. Local market standards, technical specifications, and long-standing vendor relationships heavily influence purchasing decisions.
Vendor registration matters. Many companies in the region work only with pre-approved or registered suppliers. Existing vendors enjoy a competitive edge that is difficult to overcome without offering a clearly superior product (price – quality – specs), combined with high-level relationships.
Even best relationships without product-market fit don’t work. Despite having good personal connections with decision makers in some companies, the product-market fit was not enough for us to secure contracts.
Navigating Representation and Exclusivity Agreements
A second major challenge involved managing agency and representation agreements. We encountered numerous local intermediaries—potential partners and agents—who demanded exclusivity in return for representing the product in tenders. However, many of these agents contributed minimally, sometimes only participating in a single tender.
In several cases, they requested exclusivity for an entire country or even the broader region for periods of up to five years. Such demands, if accepted, could have severely limited the client’s flexibility and control in future market engagements.
With guidance from my local contacts, I recommended the client to develop a more balanced approach. When exclusivity was justified—for example, due to strong relationships with a specific client—we limited it contractually to representation in a single RFP or with one customer only. This protected both parties: the agent was safeguarded from being undercut by other intermediaries, and the manufacturer maintained broader market access.
This project, which I conducted between 2014 and 2016, provided foundational lessons that remain relevant today. While administrative systems and tendering processes in the GCC have evolved, the nature of competition—especially the importance of relationships and market-adapted specifications—has largely remained the same.
These experiences have since guided my work with other companies in industrial equipment, technology, and related service sectors seeking entry into Gulf markets.
