Croatian Companies Seek Opportunities in Saudi Arabia

Adapting offerings to the specific needs of the Saudi market also increases competitiveness and is extremely important, emphasizes Željko Hanžek, CEO of Aqua Power International, Business Consulting and Development, in an interview for ICbusiness.info. According to him, adapting to cultural differences is key to success in the Saudi market and any Gulf state market. Understanding the business ethics and social norms of Saudi Arabia, along with consulting experts, facilitates adjustment and success in the market.

Which sectors and industries do you consider crucial for Croatian companies in collaboration with the Saudi Arabian market, especially in the context of the planned delegation trip to Riyadh?
Saudi Arabia, driven by its ambitious "Vision 2030," presents significant opportunities for Croatian companies of all sizes, particularly in sectors like information technology, renewable energy, construction, infrastructure, food production, furniture, healthcare services, and education. For instance, the Croatian IT company Q has already succeeded in the Saudi market, developing systems used by over 10 million people, and other companies like Infobip are also present there. We aim to go beyond isolated successes and create opportunities and a platform that more Croatian companies can utilize. The current market development opens doors for many other Croatian firms, and it would be a great loss not to participate in this.

How can Croatian companies enter this vast but challenging market?
Entering this challenging market requires connecting with local partners who can provide insights into business customs and regulations. Adapting offerings to the specific needs of the Saudi market also enhances competitiveness. A lack of knowledge about the opportunities can be a barrier; therefore, educating companies about the market and conducting business in Saudi Arabia is crucial. Above all, avoiding making mistakes or causing offense due to unfamiliarity with business etiquette is important.

What opportunities are emerging, and in which segments?
Opportunities are emerging in areas like digitizing services and implementing artificial intelligence (AI), which can enhance efficiency across various sectors, from healthcare to finance. Saudi Arabia is rapidly developing its IT market, with an estimated $27.4 billion by 2025, creating innovative solutions and services opportunities. All countries in the region require a wide range of industries, and we believe that while the core of our delegation is from IT, many other companies, from manufacturing to medicine, could achieve significant success there.

How do you plan to promote Croatia as a reliable and competitive partner in a region experiencing rapid growth?
Organizing business delegations, such as the planned trip to Riyadh, allows for direct presentations of Croatian companies and their competencies, promoting Croatia as a reliable and competitive partner in a rapidly growing region.
We aim to collaborate with various government institutions, ministries, and business associations. One excellent but insufficiently communicated fact is that European, including Croatian, companies have a strong reputation in the region and are perceived as high-quality and desirable. Unfortunately, we have not yet capitalized on this adequately.

Can you share specific strategies or examples?
We continuously work with numerous companies from various European countries. One of our partners is the Austrian Chamber of Commerce, through which many of its members have gained access to the region. We have also undertaken tourism, pharmaceuticals, construction, and telecommunications projects. Success in the Arab market is proportional to the presence on the ground and the level of activities undertaken over time. Trust with Arab clients is built gradually through various activities, including delegation visits, trade fair participation, and, most importantly, face-to-face meetings with key project leaders and heads of business associations. It is unrealistic to expect results remotely, as this is not the methodology for developing relationships with the Arab market.

How can companies adapt to a market that is culturally different from what Croatian companies are used to?
Adapting to cultural differences is key to success in Saudi Arabia and any Gulf state market. Understanding the business ethics and social norms of Saudi Arabia, with expert guidance, facilitates adjustment and market success. Examples include details about the type and manner of giving gifts (avoiding items like alcohol or religious art), scheduling meetings (avoiding significant plans during Ramadan or on Fridays), and appropriate dress codes. There are also nuances in communication and the meanings behind certain words and formulations.

What are the expectations for this initial trip, and what are the long-term goals for Croatian companies in establishing business ties with Riyadh and beyond?
Expectations for the initial trip include establishing key contacts, understanding market dynamics, and identifying concrete business opportunities. Long-term goals encompass creating lasting business relationships, increasing exports, and strengthening the presence of Croatian companies in the region. This is just the first of many planned visits to the region, which we hope will open not only business but also economic and diplomatic channels. We also plan to visit countries like Oman, Qatar, Bahrain, the UAE, and Kuwait later this year. The longest journey begins with the first step, which is precisely the first step in building relationships in a market of 70 million people, which, over the next 10 years, it will become a vast construction site with numerous business opportunities in its scope.

What solutions and services are needed by users in this market?
Users in the Saudi market seek solutions that support digital transformation, improve operational efficiency, and enable innovation in line with global trends. Croatian companies with proven experience and expertise can meet these needs and contribute to the development of the Saudi economy. As mentioned, there is room for Croatian firms in areas like tourism, finance, manufacturing, IT, and AI. Perhaps it is easier to list what they don’t need, as they already have oil, gas, and diamonds. However, even in these areas, they require certain expertise and engineering knowledge. Therefore, it is time for Croatian companies to organize and capitalize on their quality and knowledge in a series of new, massive regional projects, starting with EXPO 2030, Oman 2040, Qatar 2030, FIFA 2034, the Olympics 2036, and many others.