Commercial Reasons to Localize for MENA Region

The MENA region is currently undergoing economic development, which is a step towards global economic integration and offers strong, sustainable growth. It has a wealth of labor, natural resources, and entrepreneurial resources. The population, public/private sector mix, economic scale, and availability of financial and natural resources vary widely among MENA countries—in some cases quite widely.

In recent years, there have been considerable economic advancements. The majority of economies have reinforced their structural foundations as a result of financial sector, payment, and exchange system, and public finance reforms. Many nations have had decreased inflation, and despite their decline, foreign assets are still quite important.

While economies adapt to more efficient structures that promise high sustained economic growth, lower vulnerability to unfavorable external developments and enable countries to benefit from changes in the global economy, there is a chance of short-term costs as well as the potential for significant gains. Through careful planning and sequencing of policies, the costs may be reduced, with the residual elements being mitigated by social safety net provisions that are well-targeted.

Here’s how MENA is changing and why you should start the Arabic localization of your business.

The Most Important Growth Opportunities in MENA Region for Investors

Many sectors in MENA have been growing in the last few years, some have been fast growing and others are on the roller-coaster.
These are the performing sectors in the MENA region:

1. Video Games and E-sports

Around $1.8 billion in income was generated by MENA-3 (Saudi Arabia, UAE and Egypt) games in 2022, and that amount will rise to $2.8 billion in 2026, representing an average yearly growth rate of roughly 10% during the preceding five years. This reflects a rise of 56%. The MENA-3 region is expected to have 67.4 million gamers in 2022 and 87.3 million in 2026, with an average yearly growth rate of around 6% over the course of those five years. This suggests that average revenue per user, or ARPU, will rise over time.

Mobile gaming, public and private sector investments, and e-sports will all contribute to growth. The MENA-3 region has 76% of gamers under the age of 35, with Egypt having a higher proportion of gamers under the age of 25, who are referred to as "digital natives," than Saudi Arabia and the UAE. 73% of gamers in MENA-3 engage in some form of e-sports activity, whether it is watching e-sports-related media, playing e-sports games, or taking part in amateur or professional competitions. According to Time Out magazine, Riyadh is building its mega e-sports city that will cost Saudi Arabia more than $500 million. Which is one of its biggest investments in the gaming industry to attract major e-sports teams and players from around the world. This large gaming and e-sports audience in MENA requires a great Arabic localization to keep this audience engaged to the game.

2. E-commerce and Digital Platforms

E-commerce MENA market reached $37bln in 2022, with a double-digit growth rate from 2021 and a 32% CAGR over the 2018 - 2022 period. According to Gulf business, it is predicted that the market value in the MENA region to surpass $57bn by 2026.

The entire sector is simply attempting to meet this demand. The demand is coming from both the consumers who want their goods and services provided through e-commerce and the suppliers who recognize this as an opportunity that needs to be taken advantage of. And every sub-service, including finance, payment gateways, online portals, last-minute delivery, and logistics, is now in high demand. The growth in the e-commerce sector demands websites that speak the same language as their audience, which can be by Arabic localization.

3. Technology and Innovation

The digital economy in the Middle East and North Africa region is growing rapidly. The amount of money given to tech startups quadrupled, particularly in the financial technology sector. MENA has gone through progress in digital transformation. This development changed the structure of labor and education, increasing people's reliance on Internet connectivity and requiring regional and local actors to give the digital economy a top priority.

Since COVID, lots of changes have been happening, and the transition into digital has been a priority to many countries that have set a great budget to make their vision real, especially investing in fintech, e-commerce, and AI, which made the Arabic localization essential for many startups and business to communicate with their audience in their mother tongue.

4. Education and E-Learning

The Middle East has a sizeable portion of the e-learning economy. A sizable e-learning market exists in Saudi Arabia. This is the outcome of ongoing investments in cutting-edge digital technologies. As a result, Saudi Arabia became the region's largest shareholder in e-learning.

78.86% of the population in Saudi Arabia uses smartphones, with the adoption of smartphones and the migration of e-learning systems to the cloud-based approach, information is now available to everyone, anywhere.

The demand for high-quality education in the MENA region is on the rise, and governments are working on arming their students with the skills and knowledge necessary for a digital future. Yet the market potential is huge. The region’s education market is estimated to expand to U.S.$175 billion by 2027 at a compound annual growth rate (CAGR) of 8.5 percent. The growth of e-learning in MENA has been attracting those who are interested in investing in this sector in the region and attracting more students. This creates the need for e-learning localization to help these students learn faster and to understand the materials in a much better way.

5. Healthcare and Pharmaceuticals

The MENA region is witnessing a surge in demand for top-notch healthcare services and pharmaceutical products, driven by a growing population and increased health awareness. As a result, there's a strong focus on bolstering medical infrastructure and adopting advanced medical technologies. Healthcare facilities, medical equipment, telemedicine solutions, and pharmaceutical manufacturing are promising investment avenues.

Governments in the region are actively supporting these sectors through tax incentives, favorable regulations, and public-private partnerships. Emphasizing research and development further paves the way for groundbreaking medical solutions and region-specific drugs, addressing the region's unique healthcare requirements.

How Are MENA Governments Shaping the Economic Future of the Region?

Over the years, MENA governments have been working on creating an economic environment that supports growth and diversity.
There have been many issues MENA governments have worked to fix, and that led to the growth of the region’s economy, especially the Saudi’s economy.

Statista says that the Gross domestic product (GDP) for Saudi Arabia is 1.108.05 billion U.S. dollars, the (GDP) for UAE is 507.54 billion U.S. dollar, and the (GDP) for Egypt is 475.23 billion U.S. dollars.

This growth is a result of governmental and nongovernmental efforts. They are investing in non-oil sectors such as technology and prioritizing infrastructure development to support economic growth. Governments are investing in research and development, supporting startups and tech ecosystems, and fostering a culture of innovation.

Why Arabic Localization Is Essential for Any Investor in the MENA Region?

Arabic localization is going to unlock the MENA region for your business, as it will help you gain a strong connection within MENA governments and audience.
Here are some of the Arabic localization benefits:

• Access to a Vast Market:
With over 400 million native speakers, Arabic is a language of immense opportunity. By localizing products, services, and marketing content into Arabic, foreign businesses can tap into this vast market, connecting with a large number of potential customers.
• Cultural Relevance:
The MENA region boasts a rich and diverse cultural heritage. Consumers here value products that align with their customs and values. Arabic localization allows businesses to tailor their offerings to suit the local audience's preferences, elevating brand relevance and appeal.
• Building Trust and Credibility:
Communication in customers' native language fosters trust and credibility. Arabic localization shows commitment to understanding and connecting with the local audience, forging stronger customer relationships and loyalty.
• Enhancing User Experience:
Language barriers dissolve with content and interfaces in Arabic, providing seamless experiences for Arabic-speaking customers. Easier navigation on websites, mobile apps, and platforms leads to heightened engagement and conversion rates.
• Legal and Regulatory Compliance:
Language barriers dissolve with content and interfaces in Arabic, providing seamless experiences for Arabic-speaking customers. Easier navigation on websites, mobile apps, and platforms leads to heightened engagement and conversion rates.
• Competitive Advantage:
Stand out from the crowd! Embracing Arabic localization offers foreign businesses a competitive edge over competitors yet to adapt to the local market. Addressing the unique needs of Arabic-speaking consumers opens doors to market share growth.
• Long-Term Growth Potential:
Demonstrate a commitment to sustainable growth in the MENA market. Arabic localization positions foreign businesses as partners in regional development, unlocking opportunities for expansion and market penetration.
• Increased Brand Visibility:
Speak their language, connect deeply. Localized marketing content and campaigns in Arabic allow foreign businesses to engage with consumers effectively. Elevate brand visibility and recognition, establishing a lasting impact in the MENA region.

MENA region is blooming, and some predict great things to happen in the future. Be part of this growth and invest in the Arabic localization of your business.