Tag Archives: consumer boycott

Saudi Telecom, Boycotts, Social Media (راح_نفلسكم#) and Stock Price Impact

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Forgive my wordy headline, but there’s a lot to get into this story. Before anything else, let me spell out the context. Saudi and Saudis love social media, but they haven’t been enthused by the efforts of the telecommunication providers in the country to block free call apps or services offered by the likes of FaceTime, SnapChat and WhatsApp. To add insult to injury, consumers have claimed that the Kingdom’s three telcos (Mobily, Saudi Telecom and Zain) have rolled back unlimited data services.

So what have the country’s social media-crazy consumers done? Yes, you guessed right. They’ve taken to social media to call for a boycott. Under the hashtags (which basically means we’ll bankrupt you) and  (boycott telco companies), the idea is simple.

Starting from last weekend, Saudi users have begun to switch off their phones. The hashtag and others have gone viral, and users have taken to Twitter to demand action against the telcos, including physical boycotts of stores.

The ultimate mark of consumer sentiment is cartoons, and Saudi’s most prominent cartoonist Abdullah Jaber stepped in to pen his own thoughts on the issue (the below translates as the Telco company on the right, saying to the consumer, “why are you angry?”

Saudi Telecom in particular has been hit, both in terms of its social media following (the carrier has lost almost 150,000 followers on its Twitter account), as well as its share price which dropped by several percent on Sunday morning after trading opened on the Saudi bourse.

stc-followers

Saudi Telecom’s Twitter account @STC_KSA lost over 140,000 followers in the space of two days as boycott calls spread (source: Twitter Count).

stc-stock-price

Saudi Telecom’s stock price was also hit on Sunday, with an initial fall of 8% (source: Google Finance)

There’s a further dimension to this story, with some online accounts in the UAE calling for similar action to be taken against the two telco incumbents (see the hashtag  and ).

Is this type of online activism on a single economic issue going to become more common, particularly with the state of finances across the region? And what can communicators do about an issue that is about a product and a strategy that consumers don’t like?

As always, it’d be good to hear your thoughts.

Does the Gulf need media advertising watchdogs?

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Most of us act pretty sensibly all of the time. We know the limits and we tend not to cross them. An advertising creative exec should know the red lines better than anyone. Their job often involves the use of humor while at other times they will intend to shock consumers to attract their attention. Many of us will know of campaigns launched by Benetton which aim to cause offense. When such adverts are released they’re often pulled very quickly due to a wrap on the wrists both by consumers as well as national advertising watchdogs such as the Advertising Standards Authority.

I and countless others watched on over the past two weeks as one Dubai-based gym launched a series of adverts online via its Facebook site. While it was obvious that the adverts were designed to be controversial the use of an image of Auschwitz and the tagline kiss your calories goodbye was a step too far for many people.

In what seems to then have been a concerted PR campaign the Dubai-based Circuit Factory reached out to a number of media outlets in the country to apologize for the advert. The gym’s owner has explained that he didn’t see the advert, that the designer behind the advert was fired (strangely this person isn’t named and shamed), and that a donation of 3,900 Dirhams would be made to a Holocaust-related charity. The first and best article which was featured in The National can be found here.

The one point which wasn’t picked up by the journalists covering this story was the perception of the Holocaust in the Middle East. Most of those covering the Circuit Factory debacle were European writers, who in my own view have a different view to the importance of the Holocaust as opposed to most natives of the Middle East. Here the Holocaust is viewed through the prism of the Palestinian issue, and it could be argued that there is less sympathy towards the victims of the Holocaust due to the antipathy felt towards Israel by Arabs.

Whether this featured in the thinking behind the Circuit Factory’s advertising or not, the question that one has to ask is why is there no advertising watchdog in the UAE, or any other country in the region? I would have assumed that the Gulf’s various ministries of information and culture would oversee the advertising industry. But despite the obvious thought there seems to be little desire to introduce such a concept in the Gulf (there are exceptions such as Dubai’s real estate watchdog vetting foreign real estate advertising in the Emirate but these are the exception rather than the norm).

Certainly, the Holocaust advert would have been pulled in the UK by the advertising watchdog. The Circuit Factory would also have been censured and could have been fined a hefty amount. Would firms think twice about releasing shock advertising if they’d be wrapped over the wrists? I’d hope so. The initial apology was released via Twitter.

https://twitter.com/#!/CircuitFactory/status/154164519931887617

The Circult Factory has certainly benefited from the free publicity. The Auschwitz advertising coverage has gone global and the owner has admitted that the demand generated by the publicity has been remarkable.

In contrast the price paid for this coverage has been virtually nil. The donation made by the gym’s owner wouldn’t even cover an advert equivalent to the space taken by a single story published in The National. I’m being cynical here, but I very much doubt that this advert was put out without awareness of the PR buzz that would be generated. I hope I’m wrong, but having worked in comms and media for so long nothing surprises me.

For more fun images from The Circuit Factory’s owner have a look here (yes, we’re giving more free PR for the company but they’re interesting to look at to get a view of why I feel this wasn’t just a mistake). And why not throw in a second classy image while we’re at it, from the Vietnam War.

What do #brands do with #franchises when consumers get #socialmedia angry?

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A couple of recent events, both personal as well as public, have highlighted the challenges facing brands when it comes to franchises and customer service. Social media has given consumers the ability to interact directly with brands in ways which were never before possible. Today’s consumers expect a response from brands’ social media feeds, be it on Twitter or Facebook.

So what do brands do when they’re not in full control? How do brand communication teams deal with a consumer who is angry at a franchise? It’s an interesting question, especially for us consumers and comms professionals here in the Middle East.

A number of high profile examples have brought to light the limited scope for communications between consumers here in the Middle East and brands from locations outside of this region. The best case study would be the #noshaya Twitter-led campaign against the Kuwaiti-based retailer M.H. AlShaya. The call to boycott the company’s stores back in December was a response to AlShaya’s decision to stop providing cash refunds to customers throughout its stores.

AlShaya owns tens of franchises across the Gulf, including Top Shop, BHS, and H&M. It’s by far the largest retailer in the Middle East and thousands of Saudi consumers took to social media to vent their anger at AlShaya’s decision (for the full reasons behind the boycott please see this previous blog post).

After only a couple of hours of the campaign going live online activists started messaging the retail brands directly.

https://twitter.com/#!/Maialshareef/status/143021336778903553

Activists sent hundreds of messages to the official Twitter accounts of retailers who had franchise agreements with M.H.AlShaya. While I may be wrong (and I hope I am) I didn’t see a single response from these retailers. These retailers weren’t helped by promoting their own refund policies on their websites, most of which were much more generous that AlShaya and included cash refunds on returned products – the activists’ key demand.

Another consumer-led campaign which hit the headlines this week relates to a nightmare incident in Saudi involving a Toyota Landcruiser which was stuck in cruise control at a speed of 210 kilometers per hour. For those Arabic readers out there check out this harrowing news piece from Al-Hayat newspaper. #ToyotaCruiseFailSa has been a top trending hashtag in Saudi for the past two days.

Out of all the car brands in Saudi Toyota probably has the best reputation for reliability and customer care. Does Toyota rely on its distributor Abdul Lateef Jameel to step in a repair the public relations damage done (so far, there’s been little word from the distributor) or do they step in themselves to reassure Saudi drivers? The response of one Toyota Landcruiser owner is typical of those trending the topic on Twitter.

The Arabic translates as, “I haven’t used the cruise control since buying the car because of this story.”

To ask again, when do brands step in to protect their brand value? How or what do they agree with their franchise and distributor partners as to who is responsible for what? Social media has changed the communications sector in ways that few could have envisaged. One short but interesting article online has found that consumers who contact the brand via social media are much more likely to expect a response to their queries. Check out The State of Social Marketing 2011 – 2012 by Brian Solis

I wonder how many of us in communications are taking note of what is happening around us before the same thing happens to the brands that we are entrusted with?

The power of social media in Saudi – How consumers took on Almarai and won

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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.