Learn more in our exclusive interview with Arseny Kosenko, Fortis's executive vice president, strategy and product
Recently, the UAE has become one of the world's largest entrepreneurship centers, a hub for developing business projects worldwide. The unique location between Europe and Asia makes the UAE a convenient platform for further business development in MENA, Europe, and Asia.
According to the World Bank, the MENA market has 19-23 million micro-, small, and medium-sized businesses. Due to the development of the entire region and the growth of business and tourism attractiveness due to visionary policies, governmental strategic plans, and global projects like Expo 2020 in Dubai and Expo 2030 in Riyadh, this number is expected to grow significantly, and their role cannot be overemphasised. As for the UAE market, the number of SMEs has increased by more than 60 percent in the last four years and is expected to exceed 1 million by 2030.
We are confident that micro-, small, and medium-sized businesses require powerful but easy-to-use and customer-centric tech solutions to compete successfully with larger players and provide residents, businesses, and tourists with a first-class customer experience. Technological advancements are pivotal in shaping the SME landscape.
We are building a retail tech company with global ambitions, and so we see that the UAE and MENA are excellent regions for this.
While SMEs are our primary focus, as they represent a pivotal segment shaping the trajectory of our product, we recognise the potential to extend our value proposition to other stakeholders in the market. Since our product is developed as a cloud-based software with open API, we do not see any limits that stop us from working with large businesses. We first aim to deliver a response to small business challenges with a focus on simplicity and usability. If it fits the demands of the enterprise, we're totally okay with that.
However, to focus, we see a lot of opportunities for us in the mass business segment, which is represented by micro-, small, and medium-sized businesses. We understand that SMEs compete for customers and their experience – with marketplaces, giant e-commerce platforms, and supermarkets. Large enterprises are conventionally more digitalised and equipped with performance-boosting tools. It's crucial to acknowledge that SMEs predominantly operate within an analog paradigm. Their toolkit often comprises no more than a payment terminal, notebooks, or Excel. Meanwhile, consumers inhabit a digitally driven realm, where every need, from products to services, can be fulfilled within a few clicks on a smartphone app. Bridging this digital divide is at the heart of our vision.
On the other hand, we see a trend for patchwork automation and consumer-implemented solutions even in large businesses, which opened additional market opportunities for us. But to be really powerful and efficient, automation tools must be seamlessly designed. That's why our focus on integrations with other services is crucial.
Yes, but we cannot agree that large and medium-sized businesses will replace small businesses. Small businesses are the unsung heroes of our economy, creating jobs and delivering truly unique products and soulful service. Every successful business started small. In fact, according to the Ministry of Economy, SMEs make up over 94 per cent of all companies in our country and employ more than 86 per cent of the private sector workforce.
The fundamental value proposition of SMEs lies in their ability to offer customized experiences and personalised service to their customers. This is something that larger businesses, despite their resources, often struggle to replicate. It's not just about targeted marketing campaigns or data-based personalisation. It's about enhancing the overall customer experience, encompassing emotions, personalized interactions, a 'customer-centric' approach, and other crucial and invaluable elements unique to what SMEs offer. Today, customer experience is paramount, and our mission is to empower small businesses with the right technology to excel in this aspect.
Considering the current retail landscape and emerging trends, SMEs must not lag behind. According to Mastercard's findings in 2023, SMEs in the MENA region increasingly embrace digitalization, focusing on omnichannel payments, digitizing operations, and upskilling their workforce.
However, the flip side of technological advancement is complexity. Many existing global or local products tout themselves as all-in-one solutions, often overwhelming small businesses with their complexity. Our task is to simplify technology, making it accessible and user-friendly.
Several key factors stand out in assessing the current trends impacting SMEs in MENA. First, the widespread use of omnichannel experiences represents a pivotal trend in contemporary commerce. The omnichannel also increases the emergence of social commerce, integrating social media and e-commerce platforms.
Customers want to buy where they want, how they want, and when they want. So, the omnichannel approach is essential for every large or small business. It offers consumers a seamless shopping experience across various channels: online, in-store, social media, etc., ensuring uniformity in promotions and simplifying the purchasing process. However, it is not only about combining offline and online, seamless interaction.
First, it's about the customer experience, which consists of finding and choosing a merchant, selecting and ordering a product or service, paying for it, receiving what was ordered, and further interacting with it. In this sense, our omnichannel concept is built around a combination of OMS (Order Management System), multichannel POS (Point-of-Sale), payments, CRM (Customer Relations Management), and customer engagement and retention tools. These elements should work together to provide a seamless customer experience.
Investing in customer interaction is especially important for small and micro businesses. Where large businesses can win the battle for customers through other factors (brand, traffic, etc.), it is the territory of interaction with customers, the ability to sell, accept payments, and maintain contact with the customer through any channels convenient to the customer, that becomes the key factor for survival and success of smaller businesses.
The second important thing to pay attention to, including regarding MENA, is that when talking about omnichannel, they usually talk about the technological side of the issue. This is not tech-centric but consumer-centric. What needs to be done? To constantly explore and integrate new ways of merchant-customer interaction into our product. As one of the tools, we learn the customer experience in MENA, the results of which will be actively used for both product development and merchants' education.
The retail landscape is rapidly evolving due to technology and changing consumer preferences. Key trends include personalized customer experiences driven by data analytics, sustainability initiatives, and ethical consumerism. Integrating AI enhances operational efficiency while AR and VR reshape the retail experience. Cost-saving measures and effective loyalty programs are crucial, alongside prioritizing data security.
A trend worth mentioning is the increasing tendency for people to save money. They expect personalized offers, discounts, loyalty programs, and the like from brands. Recent research by Visa and Euromonitor suggests that traditional loyalty programs may fall short of meeting these expectations and driving meaningful customer engagement. So, this presents yet another challenge that small and medium-sized businesses must address. One of the solutions here is BNPL products, which convert purchases of goods into subscriptions for goods. This is a rapidly growing segment that is well-represented in MENA.
Another trend is personalisation, which combines a deep understanding of your customer's needs and preferences and the opportunity to communicate with them directly online and offline. We see that small businesses understand the importance of customer contact but often implement this in an analog format. For example, they offer printed loyalty cards, give business cards with QR codes with a link to WhatsApp, or record customer contacts in the Notes App on a smartphone. They expect their staff to remember the customer by sight, their preferences, and be able to offer them something they might like next time. Another situation users often face is merchants' choice of communication channels. There is a clear trend towards messaging, but merchants themselves prefer calls, which causes inconvenience and negative customer reactions.
This is where an omnichannel platform like Fortis can help the business owner reduce the human factor and increase customer engagement and loyalty through enhanced customer profiles, customised triggers, and other communication tools.
Fortis is designed as an omnichannel platform for B2C businesses, built around OMS (Order Management System), multichannel POS (Point-of-Sale), payments, CRM (Customer Relations management), and customer engagement and retention tools.
On its basis, Fortis will offer a combination of point-of-sale, customer profile and relations features and merchant accounts, accommodating a variety of payment methods, from cash and cards to online transactions. Right now, smart POS devices in MENA are mainly used to process payments, even in middle-sized and large retail enterprises. But we can turn them into powerful business management tools for micro-merchants at a very affordable price.
One of the critical features of our platform is the Order Management System (OMS), which stands at the heart of our omnichannel implementation. This system allows businesses to manage and process orders across multiple channels seamlessly, ensuring that whether a customer shops online, via mobile, or in a physical store, the experience is unified and consistently high-quality. Integrating and synchronising sales channels in real time helps businesses reduce errors, save time, and improve customer satisfaction.
Furthermore, interaction with customers is another area in which Fortis excels. We're integrating advanced features for customer loyalty, communication, and overall customer experience (CX). Our platform will enable businesses to deploy tailored loyalty programs, communicate effectively through preferred channels, either messaging or calls, and deliver personalized shopping experiences that foster stronger customer relationships. By leveraging these tools, businesses can not only attract new customers but also enhance the retention of existing ones, ultimately boosting their growth and profitability in a competitive market.
The revolution spearheaded by ChatGPT and various AI technologies over the past year is hard to overstate. It has significantly streamlined many processes, becoming a growth asset for large businesses, and it can become an asset for small businesses. One of the most significant challenges small business owners face is the lack of time, resources, and energy. AI can enhance customer communication by providing personalised recommendations, facilitating upselling opportunities, and tailoring marketing efforts to individual preferences. Additionally, AI-powered tools can streamline business operations and aid in decision-making processes.
As part of our product vision, we are now working on offering our clients AI-based merchant-to-customer communication tools, AI-based reports to help them better understand what's happening with their business, recommendation services to drive incremental sales, and more.
It is important to note that AI services run on customer data, including detailed customer profiles, purchase history, etc., which raises the issue of client data security. You need to think about how to ensure the security of this data as much as how to use it. This is a priority for us.
We've recently established our headquarters and launched product operations in the UAE. Currently, we prioritise accelerated product development (the omnichannel platform), building partnerships (focusing on payments and banks), and establishing a solid brand. This also includes ramping up marketing activities to build brand awareness and fine-tuning our lead generation process. We're focusing on improving user interface communications and engaging with customers through online and offline channels. Additionally, we aim to establish methods for fast, seamless, and cost-effective customer onboarding. We're also dedicated to nurturing existing partnerships while actively seeking new ones to deliver more value to our customers.
We see significant potential for expansion across the MENA region, with plans to enter 1-2 additional countries by the end of 2024 and most MENA countries by the end of 2025. Potential new markets may include Saudi Arabia, Morocco, Egypt, and Algeria, among others. Entry into each country will be strategically timed to coincide with our readiness to initiate operations. We are keen on forging regional partnerships with payment providers, equipment suppliers, software development, and integrators. These collaborations are crucial as they ensure the availability of our solutions and create mutual success.
Our business is built within the realm of buyers and sellers, where many interests converge. That's why we're keen to foster wide-ranging partnerships with banks, telecom companies, utility companies, and government agencies. We firmly believe in the effectiveness of strategic alliances. By creating the right synergy, we aim to enhance our business and support our partners in their growth endeavors.
For our partners, integrating technological products entails lengthy development cycles and resource allocation for non-core services. We aim to incorporate our products into our partners' portfolios, allowing them to address their challenges while we address ours and ensuring that customers benefit from tailored solutions.
Fortis managed to raise $20 million in Series A funding led by Opportunity Venture (Asia), with several tranches within 2024.
Emphasizing the importance of a cohesive user experience, Fortis will prioritize the development of omnichannel capabilities. This strategic approach aims to facilitate seamless interactions across various touchpoints, ultimately boosting customer engagement and satisfaction. Fortis must establish a robust presence within the fintech and retail tech sectors. We will invest in comprehensive brand-building initiatives to amplify our market visibility and enhance our credibility as a trusted industry player.
Fortis recognises the value of collaboration and will forge strategic partnerships with key industry players such as banks, payment systems, and B2B service providers.
A portion of the investment will fuel our expansion efforts across the MENA region, allowing us to broaden our reach and capitalise on emerging opportunities. Additionally, we remain committed to attracting top talent to bolster our team, ensuring we have the expertise needed to drive innovation and achieve our ambitious goals.