Redefining Retail: How Local Brands Can Thrive Amidst Global Franchise Shifts
Introduction: A Shift in Consumer Sentiment
The Egyptian public,
along with many others across the Arab world, have recently expressed their
solidarity with Gaza through a significant movement: boycotting products from
global companies seen as supportive of the Israeli occupation. This article explores
the ripple effects of such consumer activism and the potential for local brands
to rise in the wake of international franchise shifts.
The Boycott's Impact
The call to shun
products from companies perceived to back Israel has seen an unprecedented
success, leading to a noticeable decline in sales for these global brands.
This, in turn, has opened the market wider for Egyptian and national products,
resulting in a sales boom like never before.
The Russian Model of Localization
Some social media
users are advocating for a business strategy akin to the successful Russian
model. In response to the Russo-Ukrainian war, Russian franchises of global
names have disassociated from their parent companies, rebranding and continuing
operations under local guises, thus keeping their doors open and maintaining a
source of income for employees.
Can Franchises Detach from Their Origins?
In 2022, amidst the
Russian conflict with Ukraine, McDonald's, Starbucks, Domino's, Pepsi, and
other major American brands severed ties with their corporate parents. Their
local agents quickly adapted, renaming branches and continuing operations as
local entities. With popular support, these local versions not only maintained
their business but expanded, opening more outlets than before.
Success Stories from Russia
Svetlana Gritsay, the
marketing director of Vkusno & tochka, the Russian successor to McDonald's,
stated: "We have 506 outlets, with about 46 in Saint Petersburg and the
Leningrad region and 160 in Moscow. In contrast, in 2021, there were only 250
McDonald's outlets in Russia."
Starbucks' Russian Rebrand
The Russian chain
Stars Coffee opened in Moscow with the tagline "Packs left, stars
remained," a nod to the departure of Starbucks due to the war in Ukraine.
Approximately 80% of the 2,000 former Starbucks employees agreed to continue
working with the new brand.
Feasibility of Localizing International Franchises
Ahmed El-Melwani, head
of the Foreign Trade Committee within the General Union of Chambers of
Commerce, believes this proposal is practical and timely. He asserts that such
a move has more than an 80% chance of success, especially considering its
previous effectiveness.
Selective Boycotting and Government Support
Dr. Mohamed El-Bahi, a
member of the board of the Federation of Egyptian Industries, notes that while
a blanket boycott of all foreign products is not feasible, targeted boycotts
can be effective. He urges the Egyptian government to support newly successful
local brands to ensure their growth, export potential, and sustained
competition with major companies.
The Rise of Egyptian Brands
An official from the
Federation of Industries mentioned that newly emerged Egyptian companies could
evolve into strong local brands, exporting to neighboring countries. Fueled by
the success post the October 7th boycott, they could become formidable competitors
to foreign brands in Egypt and other Arab nations.
Finally
The ongoing discourse
highlights a growing trend: local businesses seizing opportunities created by
changes in global brand operations. The Egyptian market, mirroring the
successful Russian blueprint, could potentially foster a new era of
self-sufficient and competitive local enterprises, turning challenges into a
thriving landscape for domestic commerce.
