When it comes to opportunities in e-commerce and retail, Iran holds great promise.
Multiple-years of sanctions have kept global giants like Amazon and Apple out of the country. But now that the sanctions against the country have ended, Brittain Ladd, a former senior manager with the leading consulting firm Deloitte and a globally recognized expert on business, strategy, supply chain management and operations, believes that it is in the best interest of all to work with Iran.
Ladd has lived and worked in the Middle East, China and Europe, and has written extensively on business trends and is a highly sought-after speaker on the subject. He is now with Amazon designing and implementing leading edge global supply chain as well as cross border and logistics strategies.
In an interview with Financial Tribune, Ladd detailed his views about the unique investment opportunities in Iran. He also shared his insight about the future of e-commerce and trends in the fast-growing and highly competitive industry.
Excerpts follow:
What are Iran's potentials in both brick and mortar, and e-commerce retailing?
BRITTAIN LADD: Iran has an educated, surging middle-income population of almost 80 million people who desire access to brands and products from designers and manufacturers globally. Retailers and designers have taken notice and as sanctions are lifted, Iran will experience a retail revolution.
E-commerce companies that are allowed to legally operate in Iran will find a large customer base waiting to buy many products online. Due to the lack of trained retail staff, a lack of retail-friendly real estate and a lack of logistics and distribution capabilities necessary for supporting large retail stores, I believe e-commerce will prove a popular option.
I also believe that fashion designers will be influenced by Iranian culture and history resulting in apparel inspired by Iran. I must point out that to the majority of the world, very little is known about Iran. For individuals such as me who have an exceptional amount of knowledge about Iran’s history, religion, politics, culture, arts and economy, we understand that Iran has the potential to exert a tremendous amount of influence across many topics globally.
I have had the pleasure of working with Iranians over the years and I have corresponded with government officials from Iran who voiced their sincere desire for Iran to become an economic engine. I am often asked if American companies will enter Iran if sanctions and restrictions are lifted and I have no doubt that they will.
I am often asked if I would ever work in Iran directly with the government on economic policy or for a large company wanting to expand and grow, and my answer is yes, absolutely. I love the people of Iran and I believe Iran is an exceptionally beautiful country.
What steps entrepreneurs should follow in emerging economies?
By far the best advice I can offer is don’t let geography become an excuse for failing. What I mean is this: I have worked with entrepreneurs in Africa, India, Latin America and the Middle East.
Although there are legitimate challenges and constraints confronting entrepreneurs in those regions, the challenges and constraints are not so large that they cannot be overcome. In many instances, there is no solution for removing a constraint but there is a solution for going over, under, or around the constraint.
Entrepreneurs need to focus efforts on improvising, adapting and innovating, as doing so will prepare them to be able to overcome obstacles and increase their odds of success.
What is the future of e-commerce?
At Deloitte, I conducted extensive research on retailing globally, including e-commerce retail. What I discovered is that as consumers become more comfortable utilizing technology, they also become confident in using companies such as Amazon and Alibaba.
This is a very important point: As Amazon and Alibaba expand globally, all research indicates that consumers will shift much of their focus to e-commerce for apparel, electronics and other items instead of turning to traditional brick and mortar retailers. This means that e-commerce will continue to grow and brick and mortar retailers will increasingly struggle.
The one area where consumers continue to be reluctant in using e-commerce retailers is groceries. The reason for this is that food is personal to consumers and they’re not willing to turn over their food shopping to strangers.
I believe we’ll see a shift in consumer attitudes and behavior, however, as Amazon expands Amazon Fresh and Pantry to locations internationally. Amazon’s focus on quality, costs and convenience will convince consumers that they can feel confident in turning to Amazon for all of their grocery needs.
By focusing on the customer, Amazon will be able to stay aware of their competitors without having to focus all of their efforts on their competitors. Something very unique about Amazon is that they plan for decades whereas most companies are focused only on their quarterly and annual performance.
You once stated that "Amazon is not a company; they’re a customer centric ecosystem with years of growth ahead of them”. What exactly you had in mind?
Simply put, Amazon has successfully transitioned from being a company that sells products to a company that customers view as being strategic to their lives.
As Amazon expands internationally, billions, not millions of individuals will be positively impacted by the services Amazon will provide such as Prime, Prime Now, Fresh and Pantry just to name a few of the services offered by Amazon.
You wrote an interesting note on the future of e-commerce while at Deloitte where you state, “The term e-commerce is outdated and needs to be retired. Commerce is perpetual regardless of the mechanism used by consumers to initiate a sale or purchase.” Could you expand on that?
The argument I am making is that commerce is something that happens daily, 24/7, 365 days a year in countries globally. Some consumers conduct transaction in-person, others use a laptop or PC to log onto an e-commerce website, still others use their mobile phones for shopping.
An ecosystem is a series of interconnected suppliers, sellers, buyers, manufacturers, third parties and consumers all with different wants and needs but also one factor that connects them all–commerce. Retailers that can design and implement an ecosystem that simplifies the process of commerce will find tremendous success; this is why I refer to Amazon as being an ecosystem and not a company.
Amazon understands that there are potential customers in every country on earth and they’re investing in an ecosystem to turn those potential customers into actual customers.
Walmart recently acquired Jet.com, as it strives to beat back competition from Amazon? How will this affect Amazon and other retailers?
To begin with, I do not believe it is wise for any retailer to attempt to try and compete with Amazon in e-commerce when Amazon has a 20-year head-start in e-commerce. That is why I have said Facebook should acquire Jet.com vs. a retailer. I believe Facebook has incredible e-commerce potential but I believe they will have to acquire an e-commerce retailer to help them do so.
If Facebook placed a Jet.com icon on every Facebook page allowing Facebook members to shop from their individual page, the potential for generating revenue from e-commerce is tremendous.
By acquiring Jet.com, I believe Walmart will primarily secure the founders of Jet.com, especially Marc Lore and his handpicked team of executives. I also believe it would be interested in integrating Jet.com’s very unique pricing algorithms and other technology into a platform to increase Walmart’s e-commerce prowess.
I do not believe Walmart will ever threaten Amazon or Alibaba utilizing e-commerce, but I believe Walmart will certainly see an improvement in e-commerce sales.
