x Abu Dhabi, UAESaturday 22 July 2017

Grass-roots businesses ready to grow

Entrepreneurs seeking to harness a growing demand for green living in the UAE see big prospects for small-scale ventures.

Going green is the theme at Zen Beauty Lounge in Dubai. The first of its kind in the UAE, this eco-friendly salon in Discovery Gardens uses organic, toxin-free products in an effort to reduce the company’s carbon footprint.
Going green is the theme at Zen Beauty Lounge in Dubai. The first of its kind in the UAE, this eco-friendly salon in Discovery Gardens uses organic, toxin-free products in an effort to reduce the company’s carbon footprint.

They didn't have investors, a website or a business licence.

Months spent perfecting a business proposal had led to a capital influx of zero dirhams. The two women, both young mothers, worked from a villa in the Dubai suburb of Umm Suqueim with a four-year-old boy's complaints as white noise. Around this time last year, Randala Anabtawi and Tatiana Abella doubted if their dream to launch an online portal for environmentally friendly businesses in the Middle East would prove sustainable.

The challenge went beyond financing. Mrs Anabtawi and Mrs Abella knew they lived in a country that based much of its economy on oil exports. Although the Government had announced goals to increase its use of renewable energy, subsidies for oil and gas left little incentive to cut down on electricity or drive smaller cars, with the UAE topping the list of the world's top carbon emitters per capita.

Another factor drove these entrepreneurs. Mrs Anabtawi and Mrs Abella form part of the UAE's small but expanding community of entrepreneurs that hopes to cash in on green businesses, from an eco-friendly beauty salon to a showroom for recycled paper notebooks and reusable batteries. Those in the industry estimate that such independent businesses in the UAE number fewer than 50 -but this community is ready to grow.

"The green industry here is flourishing; it's growing but it's still quite in its infancy," Mrs Anabtawi says. "There's not that much money to be made out of it compared to other industries and sectors. But in the future there will be."

In order for green enterprise to bloom, the UAE needs to change both the environment for small business and its environmental regulations, local entrepreneurs say. The current investment arena favours the entry of large businesses into the UAE market over start-ups, which often take years to achieve profitability. But by bringing colleagues and prospective investors together, green entrepreneurs hope these circumstances will change.

That shift may take another step forward as politicians, private-sector leaders and even the UN secretary general, Ban Ki-moon, begin to converge next week at the World Future Energy Summit in Abu Dhabi. International funding to reduce climate change and promote the latest renewable energy technology will take the centre stage at the week-long forum.

Chief among the interests of the foreign visitors will be the UAE's aggressive drive towards its goal of sourcing 7 per cent of its energy from renewable resources by 2020, as well as the construction of Masdar City, the US$16 billion (Dh58.7bn) carbon-neutral development on the outskirts of the capital. Last Monday, Hillary Clinton, the US secretary of state, praised the country's renewable-energy ambitions during a visit to the Masdar City development.

"The UAE is positioning itself to be a centre of innovation and entrepreneurship for years to come," she said. "You will have the model that will demonstrate to others what it takes to achieve renewable energy and sustainable growth."

Although the UAE's big-budget initiatives may capture the eye of international observers, it's arguably the small-scale businesses that can bring about change in the everyday lives of people.

At least that's the hope of Mrs Anabtawi and Mrs Abella.

The women secured a business licence shortly after last year's World Future Energy Summit.

One month later, they launched the website Goumbook (www.goumbook.com). Using their own funds, the green team had long given up on the idea of an angel investor.

"These things are expensive," Mrs Anabtawi adds. "They're costly and they don't offer high returns."

The website is now an efficient meeting ground and marketplace for all things green, including event notifications, directories, job listings and the latest products.

Soon after its launch, Goumbook attracted the attention of a Dubai-based online marketing agency, Grafdom, which offered to sponsor the site through its corporate responsibility programme. By the time the women renewed their business licence, the company was turning a profit. Goumbook had landed.

However, the journey is far from easy for anyone entering this region's relatively unexplored green market. Without a flourishing venture capital scene, early joiners often rely on family funds or lean on the infrastructure of an existing business.

Leena al Abbas, a UAE national and the owner of the Zen Beauty Lounge (www.zenbeautylounge.com) in Discovery Gardens, says launching the country's first eco-friendly salon has been full of ups and downs.

The lounge - using toxin-free, natural and organic products from around the world - attempts to create a zen-like atmosphere, with wallpaper made from bamboo and sweet fragrances. But while the business might be alternative, she says it offers all typical treatments, such as threading, cuts, shampooing, manicures, pedicures and massages, without the chemicals or carbon footprint.

One challenge has been convincing consumers to use her unusual products. Green products are often more expensive, so if someone is going to spend extra cash, Ms al Abbas says, the client will want to know exactly what he or she is paying for.

With a salon staffed by three employees, Ms al Abbas still takes the time to show customers product labels and walk them through the company profile.

"I'm very transparent in my business," she says. "If anyone asks, we straight away show them."

Ms al Abbas adds that, so far, she has managed to finance her green business with her own savings. She hopes to break even sometime this year, and advises entrepreneurs to have patience.

"I'm not in a rush," she says. "It's really important to go for the money, but it's also important to do something that makes you happy."

Like any other business, Goumbook and the Zen Beauty Lounge must contend with the trials of opening an enterprise in the middle of a financial crisis. As Americans and Europeans re-evaluate luxury goods, including eco-friendly ones that can often carry a higher cost, green entrepreneurs in the UAE hope consumers will still be willing to open their pockets. One benefit of the downturn, however, is a shift away from a local culture of glitz and showmanship, says Anu Agarwal, who last year started Ekotribe (www.ekotribe.com), a company selling eco-friendly products.

"Enough with the affluence, enough with the greed," Mrs Agarwal says. "People just want to come down to earth."

This week, Mrs Agarwal met the company designing and building Ekotribe's exhibition stand for the World Future Energy Summit.

The official storefront is a substantial upgrade from last year, when she wandered the halls with a fistful of business cards; this year, she plans to lure corporations that seek large orders of recycled pencils, eco-friendly wallpaper, solar-powered backpacks, bamboo kitchenware and organic beauty products.

In a nutshell, Ekotribe seeks to harness a growing demand for greener living.

Finding suppliers of sustainable goods has been Mrs Agarwal's biggest challenge. Because shipping special orders of recycled paper from Indonesia or commissioning recycled packing boxes from a UAE factory needs to be done in bulk, Mrs Agarwal says she has so far invested more than Dh1 million on inventory.

She has been able to fund that investment by relying on the infrastructure of a 15-year-old online marketing firm, Cyber Gear.

Sharad Agarwal, her husband who co-founded Cyber Gear, organises monthly networking sessions for the UAE's green enterprise community. The green business arena reminds Mrs Agarwal of Dubai's online market just after Etisalat began offering internet service in the emirate.

"There's a lot of scepticism out there about eco-products," Mrs Agarwal says.

"It's going to take a couple of years for this field to take off."

One way of earning environmental credibility was to apply for a business licence with Enpark, a free zone in Dubai that caters to businesses oriented towards sustainability.

But that location came at a cost, adds Mrs Agarwal, who pays Dh15,000 each year to renew her licence and a further Dh18,000 for a small office.

Goumbook's founders also considered Enpark, but opted instead for the Free Trade Zone in Ras al Khaimah, a business development managed by the emirate's investment authority. To secure a business licence and an office, which is more symbolic than functional because of its distance, they paid Dh8,000 the first year and Dh1,200 to renew it for a second year.

The team now has big plans.

Goumbook hopes to launch a retail website and become the top consultancy for foreign eco-friendly businesses seeking to gain a foothold in the UAE market. It's a lofty goal for a website not even one year old.

Getting Goumbook off the ground required its founders to make contacts across the UAE, and hosting an exhibition for some 400 visitors in December has given them some idea of local demand.

"Just in a year, suddenly governmental institutions, schools, thr private sector and everybody else wakes up and they do it," Mrs Abella says.

"Living in the UAE, it makes you think everything is possible."

Ms al Abbas, from Zen Beauty Lounge, also feels encouraged by the growing green movement. She believes the real key to success is passion for the principles of green living.

"The passion comes out because it's something I truly believe in," she says. "It's really hard to try to convince people if you're not convinced."