The past year has been one of transformation across the Middle East. What has happened on the ground has been mirrored online. Today fewer people out there across the Arab world would deny that the internet will make a difference.
The Arab Spring as it has been labeled by the media has affected the way that consumers interact with brands and their products/services. Arab consumers, particularly young consumers, are much more willing to voice their frustrations and concerns online. If pushed, they will also take on brands and coordinate their actions with others online in what could be dubbed concerted campaign-like actions.
We’ve seen a number of examples of consumer-led action in 2011. There’s been the widely publicized #Qtelfail campaign which highlighted how unhappy both foreigners and Qataris were with Qatar’s government-owned telecommunications firm Qtel. Then there was the #VodafoneShokran hashtag which was used by Egyptians to criticize the global telco for its decision to turn off its network during the Egyptian uprising.
Even Saudis have gotten into the habit of getting online to flex their consumer muscle. On July 3 the largest dairy producer in the Middle East Almarai raised the price of a two-liter bottle of fresh milk from seven to eight Saudi Riyals and reduced the size of its one Saudi Riyal laban from 200ml to 180ml. The company had justified the price hikes by pointing to increasing costs for raw materials, packaging and higher wages.
Saudi consumers went online to protest at the price rises. Those on Twitter used the hash tags #mara3i, #StopMara3i to voice their concerns, noting that other diary companies had not raised their prices. A Facebook page calling for a Gulf-wide boycott also attracted hundreds of followers.
Boycott-related images posted on Twitter internet included a photo of Almarai-branded laban bottles in a store overlaid with text reading “Let it rot.” Another picture, from a Saudi Twitter user, featured a bottle of Almarai laban with the caption “Go to Hell My Friend – Saudi Citizens.”
“Usually, companies raise their prices if it suffers losses,” said statement written on a Facebook page set up to boycott Almari’s products. “Well, this is absolutely not the case for Almarai, one of the biggest Saudi companies in terms of revenue. Why does it want to raise profits? Is it willing to form an economic empire at the expense of the crushed citizen?”
Egyptian newspaper Al-Ahram published a few of the thousands of comments published online. “They exploit us by increasing prices and consumer protection doesn’t turn a hair,” Abdul Aziz Al Qobeishy said on “together to face the greedy Marai.”
Another Facebook user, Yasser El-Harbi, said “Go on people and AlMarai will remain an unforgotten lesson for vendors in different sectors.”
The outburst and consumer backlash was so pronounced that the Saudi Ministry of Commerce stepped in. The Minister himself issued a decree to force Almarai to revoke the price rises which the company duly did on the 11 July.
In a written statement Almarai defended its initial decision to raise the price of its products.
“In compliance with the resolution issued by the ministry … Almarai is taking the price of its two litre fresh milk and laban pack sizes in the kingdom of Saudi Arabia to the level that prevailed with immediate effect,” the company said on its website the day after complying with the ministry’s ruling.
“However, Almarai believes that the rationale and justification for the price increase is still valid. We will continue to work with the relevant government authorities to address this issue.”
What’s so striking about the Almarai incident is that it took less than eight days of anger to surface through sites such as Facebook, Twitter and blogs or discussion boards for the Saudi authorities to take action. Almarai is listed on the Saudi stock exchange and its founders/owners include the Saudi Royal family.
It’s even more remarkable when you consider than hardly any traditional media outlets had covered the story prior to the ministry’s decision. That the ministry took notice of the thousands of Saudi consumers who had vented their anger online is an indication of how powerful social media has become.
Contrast this to the decision by Coca Cola and Pepsi to raise the price of a can from one Riyal to one and a half Riyals several years back. Despite a consumer backlash which was led by traditional media outlets such as newspapers the Ministry of Commerce did not step in to rescind the price rise.
I feel in part that social media has become a much better barometer of consumers’ feelings than traditional media in countries like Saudi Arabi. The Almarai boycott is a simple example of this.
What Almarai also proved is how bad Saudi firms are at communications and public relations. Rather than reaching out to consumers the company acted as if it was immune to criticism. The company’s CEO talked to a business news channel, MBC Al Arabiya, rather than talking to his customers. Almarai issued statements to the Saudi stock market rather than getting people online to start a discussion with disgruntled consumers. The company failed to talk with Saudis who buy its products and was duly punished for ignoring them.
Following the boycott Almarai has set up a communications department, in part to tackle reputational management issues as well as crisis communications. However, I’m not optimistic that if Almarai does try for a second time to raise prices the company will be ready to tackle the backlash. For that to happen, the management needs to understand that they have to reach out to consumers, talk with them both online and offline, and understand their concerns. I hope I am proved wrong.