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Dubai Attracting More Korean Investment and Interest

Posted July. 22, 2008 09:07,   

한국어

The United Arab Emirates is seeing an explosive increase in the number of Korean companies entering the Dubai market.

The advances of Samsung Electronics, LG Electronics and Korean builders into Dubai since the early 2000s have prompted Korean makers of chinaware, furniture and flooring material to build their own presence there.

○ Bridgehead to the Middle East

Soh Joong-hee, marketing team leader at the chair manufacturer Sidiz, has visited Dubai six times this year alone. After witnessing a positive response to its products in the Dubai Office Exhibit in February, Sidiz selected the city as its bridgehead to expand into the Middle East.

Soh is searching for a dealer in Dubai for his company.

Home appliance maker Tongyang Magic attended this year’s International CES/Hometech in May for the second time since 2005. This year, the company said it is striving to appeal to Dubai consumers, demonstrating the cooking of UAE cuisine using its steam oven and running ads featuring an Iranian actor.

Tongyang held consultations with some 150 potential clients and secured orders worth five million U.S. dollars.

The Consumer Electronics Association said the Middle Eastern market for home appliances has risen to about 28 billion U.S. dollars, up 66 percent from last year. This has prompted Tongyang to open a showroom in Dubai.

The lumber company Dongwha Holdings began exporting wooden panels for furniture to the Middle East from the mid-1990s, but stopped in 2004 due to deteriorating competitiveness. Dongwha, however, participated in the Dubai Index 2007, an exhibition for interior materials, in trying to re-enter the Dubai market.

○ Dubai’s charms

Soh of Sidiz said, “Since Dubai lacks production infrastructure, world-class products are all flocking to the [United Arab Emirates] and engaging in a marketing battle. As capital from the United States, Europe and Russia is concentrated in the rich Arab country, it is fair to say that if you do well in Dubai, you’ll do well in the world.”

According to market trend data released by the Korea Trade-Investment Promotion Agency, the UAE will spend 325.9 billion dollars on development projects over the next five years, the largest amount in the Middle East.

The International Monetary Fund’s growth outlook for the UAE this year is 6.6 percent, higher than the global average of 4.8 percent.

Dubai accounts for half of the UAE retail market. The number of tourists to the city in the first nine months of last year was 5.1 million, four times the country’s population and serving as a catalyst for economic growth.

The outlook for Dubai, however, is not all rosy.

A source from a small company doing business in Dubai said, “It is hard to establish an independent distribution network in Dubai, since dealers all demand an exclusive supply contract.

“Foreign ownership is also limited to a maximum of 49 percent and a large gap separates the rich and poor.”



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