I am republishing this article on my website because my remarks were quoted in the original piece. The original article was published in 2016 on the arabianbusiness.com website.
Sanctions on Iran may have just been lifted, but Damien Duhamel, CEO of Solidiance, believes foreign companies need to act fast if they want a meaningful stake in the country’s economic resurgence.
Last month’s lifting of sanctions sparked quiet excitement among top executives at multinational firms—especially those based in Europe and Asia. But not everyone is moving at the same pace. U.S. and Chinese firms are more cautious, held back by regulatory hesitations and legacy positions in the Iranian market.
The Iran Opportunity
To grasp the urgency, one must first understand the opportunity. With a GDP of approximately USD 1.4 trillion, Iran accounts for 1.5% of global GDP and ranks as the 18th largest economy in the world—right between Turkey and Australia.
Unlike many Asian and Middle Eastern economies still transitioning from agriculture or oil dependency, Iran has a more sustainable and diversified foundation. The country boasts:
- The world’s 2nd largest proven natural gas reserves
- The 4th largest proven oil reserves
- A balanced economy—oil and gas contribute only 25% of GDP
- Strong sectors in automotive, agriculture, manufacturing, and mining (each 10%)
China’s Head Start and Potential Setback
While global sanctions isolated Iran, Chinese firms forged ahead, securing strong positions in both oil and non-oil sectors. But now, as Iran reopens, consumer demand is shifting. Iranians are actively seeking higher-quality European goods and industrial equipment.
There are signs of backlash against China’s dominance: local consumers have boycotted both Chinese and domestically made vehicles due to subpar quality. As European and Asian brands return, Chinese firms may begin to lose their inflated market share.
Europe and Asia: Well Positioned
Though they lacked China’s open access, European and Asian multinationals are poised to leap ahead. Strong brand reputation and product quality give them a competitive edge—provided they move quickly and form solid local partnerships.
U.S. companies, by contrast, are held back by tighter compliance requirements. While their European and Asian peers have been traveling in and out of Iran, American executives have remained sidelined. This delay could cost them: in Iran, being late to the party means missing out entirely.
Speed Matters
First-mover advantage is especially critical in Iran. According to the World Bank’s 2015 Ease of Doing Business Index, Iran ranks 130 out of 189. The local landscape is complex, and success hinges on finding a strong, trustworthy local partner.
There are only a limited number of experienced and reliable distributors or joint venture partners in the country. Once they’re claimed by early entrants, latecomers will have few viable options left.
Move Now or Miss Out
The market opened on January 16th. But there’s a world of difference between companies already building local relationships and those still waiting to make a move. Those who act now—developing thoughtful entry strategies and execution roadmaps—will be best positioned to succeed in one of the most exciting markets to re-enter the global stage.
Source: https://www.arabianbusiness.com/business/companies-must-move-quicker-for-slice-of-iran-624978
