The trade between the two regions is growing at an explosive rate. Economy Middle East speaks to Huda Al-Lawati, founder and CEO of Aliph Capital, on the importance of digitalization at companies, strong Middle East-Asia trade ties, and opportunities for women in the financial sectors.
In what ways can digitalization boost the growth of the private equity market in emerging economies? What important digitalization initiatives has Aliph Capital recently implemented? How have these impacted your operations?
What can boost PE market growth is the need for digitization and technology. Technology is no longer an option but a necessity for success today.
However, digital transformation (Dx) is both expensive and difficult to navigate. As such, the need for Dx also creates a need for capital and expertise. A particular strength of Aliph Capital is that we not only fund Dx journeys, but also help portfolio companies in designing and implementing fit-for-purpose digital transformation roadmaps.
An example is our work post acquiring The Petshop – the UAE’s largest omnichannel pet services business in 2022. We identified and addressed backend ERP gaps, launched a B2B e-commerce platform, added express delivery, integrated CRM (customer relationship management) & marketing automation system to centralize online & in-store data, automated marketing channels, rolled out an AI-powered search engine and launched a centralized data warehouse supporting customer engagement by driving insights into basket mix, retention, and opportunities. The most important aspect of what we do is bringing the conversation around Dx to the board and ensuring that management teams take ownership and have proper incentives to prioritize tech enablement.
Some experts say the Middle East and Asia corridor is an emerging, potentially powerful conduit for global capital. What are your thoughts on this and what are the opportunities?
I think that we should not ignore this corridor. The trade between the two regions is growing at an explosive rate. In fact, as per research by Asia House, Gulf-Emerging Asia trade has surged by some 35 percent between 2021 and 2022. Meanwhile, trade between the GCC and Emerging Asia could overtake trade with Advanced Economies in 2026. Several factors are driving this growth, including Asia’s increasing role as a primary oil importer (particularly with the U.S. achieving oil self-sufficiency), the GCC’s significant food imports coupled with India’s status as the world’s second-largest food producer, and growing investments from the GCC’s sovereign wealth funds into Asia. Efforts to enhance ties and foster partnerships are evident in the accession of UAE and Saudi Arabia into BRICS, the ASEAN-GCC Summit in Riyadh, and UAE’s Comprehensive Economic Partnership Agreements with India and Indonesia.
The GCC has committed to becoming a diversified, global economy. Diversifying our trade and investment networks globally is essential to achieving this goal. We have successfully established ourselves not only as oil exporters but also as prominent global investors and leading transport and logistics centers. It’s crucial to acknowledge the significant and growing Asian demographic contingent in the GCC expat ecosystem.
Fostering ties among regions abundant in talent, energy, knowledge base and food resources benefits all involved and creates opportunities across the board. Increased trade flows generate opportunities within the servicing and building logistics infrastructure. E-commerce growth drives demand for last-mile delivery solutions. Growing demand can also incentivize companies to establish manufacturing bases in the GCC. Growing tourism presents opportunities in hotels, airlines, and travel agencies – these are just some examples.
