From mobile phone shops to burger joints, Jordanians like nothing more than flogging a good retail concept to death. We desperately need new business ideas.
The Strategist- Nader Museitif
Did you know that Jordan has more than 1,600 pharmacies? That works out to be an average of one pharmacy for every 3,750 Jordanians. The same metric applied to Canada works out at more than 5000, despite it being the second largest country in terms of geography and supposedly having one of the best health care systems around.
We can make several inferences from such a metric. Yes, we beat First World countries in ready access to Panadol and Pampers; and that says a lot about the state of health care, but that’s not the case I’m trying to make. There’s one sad, undisputable fact that applies not just to pharmacies, but also to other commoditized and undifferentiated services. The fact is: we Jordanians love to crowd a market until it’s milked dry of any return or value.
Take mobile shops: Some streets in Amman have so many of them lined up next to each other, defeating any accepted sound economic theories on competition and supply. In retail, PC Zone is shutting down and Fun Directory has a fruit and vegetable section. The latter being an attempt at capturing a share in another insanely crowded space—groceries.
And our love for crowding goes beyond the commodity services. It’s unfortunately very visible in new economy sectors. Lack of innovation and the inertia against differentiation have become differentiators in themselves. Startups jump into launching copycats that have no barrier to entry, little or no margin, and a guaranteed path of cash-burn. These entrepreneurs don’t fully understand where the money is and how to capture it.
A lot of startups came online during the last five years or so, supported by VC funds and incubators. Statistically, most of them are destined to close and that’s a given. Many of the early ones have already shut down, many will, and the Google of Arabia is yet to show up.
Are we looking in the right direction? Are we investing in the right businesses? Are we missing opportunities under the radar, entrepreneurs who have their heads down and cracking away at successful business models? Is the next Google or Amazon the right target to aim for, or should we also consider the factories, the creative designers, and the good restaurants to be the next GEs, IKEAs, or McDonald’s of the Arab world and beyond?
It’s definitely a mix of both, and the beginning is always difficult and even painful. Anyone taking a serious stab at trying something innovative deserves recognition and support. But the serious ones are not in it for recognition, they are in it to succeed and build so they avoid being the next mobile shop in Sweifieh. Invest in them, mentor them, and work with them—they will build good businesses, in any space.