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.
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.