Market Audit of Country

Doing Business in Lebanon

The Market

Consumer buying habits

For thousands of years Lebanon has been a center of trade, which has given it an appreciation of foreign goods.  Lebanese people like to be very elegant.  It is very important to have the nicest handbag, Chloe' or Dolce & Gabbana, even if they can't afford more.  They might buy one of two good pieces a year.  Beirut dwellers tend to spend an extraordinary percentage of their incomes on luxury products, and they derive a great deal of prestige from choosing international brands and paying full price for them.  Lebanese people like to be seen doing the right things, wearing the right things, and driving the right things and go in debt doing it.  They have a sake of living lifestyle--living beyond their means--even if the country is falling apart around them.  

Common types of retail outlets:  H&M, Aishti, Dolce&Gabanna, Gucci, and Guess

Advertising and Promotion in Lebanon

http://www.youtube.com/watch?v=7KaOSHF0b48

Business Etiquette

Dress

• For Men--Stylish suits and ties are common for initial meetings.  Darker colors are the way to go.  Business casual attire is becoming more and more acceptable in many industries.
• For Women--Conservative, yet stylish.  Pants are acceptable.  Women are usually fully made--up and wear accessories.  Dress is more open in urban environments vs. rural.  Best to dress conservatively (dresses/skirts cut above the knee, no low necklines or sleeveless attire when in religiously conservative areas
• Jeans and shorts are not acceptable in business situations.
• Being well-groomed is appreciated.

Business Cards

Expect to exchange business cards with everyone.  In Arab countries, it's polite and expected that your business card will be in English in one side and Arabic on the other.  Present your card Arabic side up.

Meetings

• Schedule meetings well in advance
• Accept all offers of food and drink
• Avoid sensitive subjects on business and politics
• Give host a gift
• Don't use your left hand
• Don't show the bottom of your foot
• Don't point with index finger
• Showing affection or touching others unacceptable
• Arab people are laid back, so relax and take it slow

Economic Analysis

http://www.youtube.com/watch?v=TVJfKzydWN4

• Lebanon is a Middle Eastern country that shares its borders with Syria, Israel and the Mediterranean Sea.

• Lebanon is very mountainous

• Beqaa valley, which has very fertile soil is the source for agricultural products.

• In the past, Lebanon was considered the business capital of the world.

• The Lebanese economy is resilient, withstanding wars and invasions with Israel and dominating influence of Syria.

• Lebanon despite it all achieved 9% growth during the Great Financial Crisis.

• The urban Lebanese population is known for entrepreneurial enterprise.

• Tourism is the main contributor to the economy as well as the financial sector.

• 35% of the total workforce is employed in the service sector

Population

• Lebanon has an area of 10,452 sq. km. and a population of 4,140,289

Age Distribution

• 0-14 years: 22.5% (male 477,647/female 455,008) 
• 15-24 years: 18% (male 379,340/female 364,200) 
• 25-54 years: 41.9% (male 836,126/female 900,600) 
• 55-64 years: 8.4% (male 159,909/female 186,446) 
• 65 years and over: 9.2% (male 175,847/female 205,166) (2012 est.)

Economic Statistics and Activity

GDP (PPP)

• $61.4 billion
• 1.5% growth
• 6.7% 5-year
• compound annual growth
• $15,523 per capita

Inflation (CPI):  5.5%

FDI Inflow:  $3.2 billion

Personal Income per capita:  15,330

Average family income:  10%

Distribution of wealth:   28%

Minerals and Resources:  high-grade iron ore and lignite; building-stone quarries; high-quality sand, suitable for glass manufacture; and lime.

Surface transportation:  Lebanon has seven airports in the country. Five of the seven airports have paved runways. There are 43 kilometers (km) of gas pipelines. Railways extend for 401 km in Lebanon. Roadways measure 6,970 km in Lebanon which include 170 km of expressways. Lebanon has two ports and terminals which are in Beirut and Tripoli. These ports offer ports and terminals for the 33 different kinds of merchant marines.

   

Communication systems:  In Lebanon, approximately 714,000 households use a main line telephone in 2008. Cellular phones are also popular in Lebanon with 1.43 million people using a mobile phone. Individuals using the internet are also popular. Nearly 2.19 million users are online. Information is also broadcast over 15 television stations, 20 AM radio stations, 32 FM stations, and about 12 unlicensed radio stations. 

Working conditions:  As stated earlier, Lebanon’s workforce is about 1.481 million workers.  Of these 1.481 million workers, roughly 945,000 were foreign workers whom come from Syria, Asia, India, and Africa.  They are mostly unskilled and employed in areas such as construction, agriculture, industry, and households.  The government supports trade unions.  The typical work week is 48 hours.  Approximately 15,000 people work in the financial sector and manufacturing employs about 15% of the workforce.    

   

Principal industries:  banking, tourism, food processing, wine, jewelry, cement, textiles, mineral and chemical products, wood and furniture products, oil refining, metal fabricating

Foreign investment:  1.25%--3,793,230,000 (2010)

International trade statistics:  Exports:  $5.655 billion--Exports partners:  UAE 12.1%, Iraq 8.4%, Saudi Arabia 7.7%, Turkey 7%, Syria 6.7%, Switzerland 5.5% (2011)
Imports: $20.73 billion (2012)--Imports partners:  US 10.2%, Italy 9.3%, France 8.8%, Chain 8.2%, Egypt 5.3%, Germany 5.1%, Turkey 4% (2011)    

Trade restrictions:  Embargoes, ImportTaxes, Tariffs, Licensing, Custom Duties

Extent of economic activity not included in cash income activities:  Countertrades--Lebanon hold the monopoly on cigarettes and tobacco, and Foreign Aid 

Labor Force:  1,481

Inflation rates:  5.5%

Developments in Science and Technology

Current technology available:  computers, generators, tractors, and cell phones.  

Technological skills of the labor force and general population:  The labor force has low levels of education and there are gaps in terms of technical, cognitive, and non-cognitive skills that can compromise the expansion of high productivity sectors.  Around 44 percent of the labor force is unskilled, with 6 percent uneducated, 36 percent with only primary education and 26 percent with only secondary education.  Educated employees have skills that severely mismatch the needs of the economy.

Channels of Distribution

Retailers

Aishti:  Aishti has become a synonym for ultimate luxury in Lebanon.  Its founder Tony Salame achieved to bring together the top fashion brands including Prada, YSL, Dolce & Gabbana, Dior, and Fendi.

Patchi:  Nizar Choucair's passion for chocolate transformed into a new gift trend.  Today, Patchi owns more than 140 boutiques in more than 29 countries around the world.

ABC Group--ABC was the first retailer in Lebanon to offer fixed prices, to hire women and to advertise.  Today, ABC operates six branches around Lebanon (Achrafieh, Hamra, Zahle, Tripoli, Beaute and Dbayeh) and is a top shopping and freetime destination.

Wholesale middlemen

Al Maher Trading Est.:  Importers and wholesale distributors of textile fabrics for the clothing industry.

Maison Georgette, Lebanon:  Wholesalers of textiles, bags, cushions and other accessories in Lebanon and other countries.

Import/export agents

Salim Kaskas and Co.:  Importers and distributors of fashion fabrics for women's wear, haute couture, home decoration and furnishing.

Organza, Lebanon:  Manufacturers and exporters of a range of curtains.  Also, specializes in manufacturing and exporting comforters, bedspreads, sofa covers and other textiles.

Warehousing
Global Freight and Logistics:  reliable storage and warehousing service.

Global Dynamix:  International company that provides logistics solutions all over the world.  The company has its headquarters in Beirut, Lebanon.

Penetration of urban and rural markets

• Market size and potential for growth
• Costs for investments--from price offers to advertising, training and even processes and systems modifications to adapt to new strategy.
• Possible change in product positioning with all negative and positive implications
• Advantages for the whole product line and company from publicity or advertising to your competitors' reactions.

Media

Lebanon's broadcasting scene is developed, lively and diverse, and reflects the country's pluralism and divisions.

It was the first Arab country to permit private radio and TV.  The government has a say over who may operate stations and whether or not they can broadcast news.  Some outlets are owned by leading politicans.  Future TV and LBC claim a large share of the audience.  Al-Manar TV is operated by Hezbollah.  Take-up of satellite and cable TV is widespread.

There are dozens of private radio stations.  BBC Arabic and Radio France internationale are carried by partner stations.

Even though there are no censorship laws, curbs forbid the media from defaming the president or other heads of state.

  

Brief History of Lebanon

Lebanese History

At the end of WWI, the French acquired the northern part of Syria.  They separated the region of Lebanon in 1920, and granted their independence in 1943.  The civil war and the war with Israel from 1975-1990 devastated the country, but with the help of Prime Minister Rafik Hariri, Lebanon was able to rebuild its political institutions.  The Arab League made it possible for Syrian troops to deploy into Lebanon in the Bekaa Valley.  Israel then withdrew its troops from the south of Lebanon in May 2000 also calling for Syria to withdraw its troops.      On February 14, 2005, Valentine's Day, Prime Minister Rafiq Hariri and 22 others were assassinated leading to massive demonstrations in Beirut against the Syrian occupation--the Cedar Revolution--which led to the withdrawal of Syrian troops in April 2005.  Saad Hariri, the son of Rafiq took over as Prime Minister.  A national unity government was formed, but soon the opposition caused it to collapse and they named a new Prime Minister, Najib Miqati. 

Rafiq and Saad Hariri

Geographical Setting

Location:  Lebanon is located on the East coast of the Mediterranean Sea, where it is the meeting point of three continents:  Europe, Asia, and Africa.  Syria is to the north and west, and Israel to the south.  It has been the crossroads of many civilizations of which can still be seen today.

Area:  4,000 sq m

     Lebanese Flag:  "The Lebanese flag is composed of red, white and red horizontal strips, with a green cedar in the middle of the center white stripe".

Major Cities: Beirut (capital), Tripoli, Sidon, Zahle, Tyre, and Jounieh. 

Climate

Lebanon enjoys a four season Mediterranean climate with rainy winters, moderate springs, warm summers and regular autumns, with an average of 300 sunny days a year.  The winter is mild on the coast and snow in the mountains and the summer is hot on the coast, but cooler in the mountains.  Also, Lebanon is the only country in the Middle East that doesn't have a desert. 


Topography

Lebanese Society and Culture

Society

Lebanese people have a rich cultural and traditional background.  They are well known for their love of music, dance, art, and literature.  They have a major interest in theaters films and literary works.  They also have a love for life and living it because no one knows what tomorrow will bring.  

                Dubke                                            Belly Dancing                        

                       Mezza                                      Traditional Dress

               Theater                                         Fairouz (Singer)

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Family 
Families in Lebanon are very close and it is something very important.  Usually children don't leave the home until they are married and even then some remain with their parents.


  





Education

•  60% schools use French as basic language
• 20% use English
• Well-known for its American and European colleges and universities 
• Arabic language and literature taught in all schools as are philosophy, history, and sociology
• All Lebanese schools required to follow prescribed curriculum designed by the Ministry of Education.
• Private schools, approximately 1,400 in all, may add more courses to their curriculum with approval of the Ministry of Education
• Main subjects taught are math, science, history, civics, geography, Arabic, and at least one secondary language (either French or English).
• Primary education in Lebanon is for children aged 3 to 4. Basic education composes of two levels: elementary level and intermediate level. Elementary level is grade 1 to 3 (cycle 1) and grades 4 to 6 (cycle 2). Intermediate level is grades 7 to 9 (cycle 3). Secondary Education is grades 10 to 12 (cycle 4).
• Required to take and pass government exam to be able to enter an accredited university or college--bacheloria.

Political System

• Lebanon is a democratic republic with a parliament, a cabinet, and a president, with power divided along religious lines.
• The President (a Maronite Catholic), who lost part of his executive power after the war, is head of state
• The Prime Minister (a Sunni Muslim) is the head of government and chairs the Cabinet
• The Speaker of the House (a Shiite Muslim) presides over Parliament which passes  the Cabinet's bills and elects the President
• President elects can only be Christian

Legal system

• Mixed legal system of civil law based on the French civil code
• Ottoman legal tradition, and religious laws covering personal status, marriage, divorce, and other family relations of the Jewish, Islamic, and Christian communities

Marketing

• U.S. companies interested in doing business in Lebanon are advised to hire a Lebanese agent or distributor.
• In Lebanon, networking and lengthy investigation are key to finding an appropriate one.
• U.S. companies do not need to visit Lebanon to find an agent. The U.S. Commercial Service can help U.S. companies find the right partner through the International Partner Search (IPS) service
• The Investment Development Authority of Lebanon (IDAL), a public agency responsible for promoting investments in Lebanon, has a “One-Stop Shop” service to issue permits and licenses for investors.

Social Organizations

Lebanon has 247 social organizations to list a few:

• Friends for the disabled
• World Health Organization
• Independent organizations help the poor

Ethnic Groups

• 50-70% of most Lebanese are descendants of the Phoenicians/Canaanites and/or West Aramaic
• 20-30% descend from Arabs
• 10-20% are formed by Armenians, Greeks, Assyrians, Hebrews, Kurds, Persians, and others

Business Customs

• Conservative Dress
• Firm handshake if they offer you their hand--some Lebanese men are very religious and place their hand on their chest bottom down
• Inquire about health and family
• Schedule meetings in advance
• Do not use left hand while eating or greeting
• Accept all offers of food, drink, and gifts.
• Linger a while after a meal--Lebanese people take their time
• Avoid sensitive topics such as business, religion, or politics
• Give host a gift--flowers or sweets
• Do not point with index finger, show public affection, show bottom of feet, have back to someone, or touch others.

Religion

• Lebanon recognizes 17 religious sects of Christianity, Islam and Judaism
• 40% Christians--Christian Maronites
• 60% Muslims--Sunni, Shiite, Druzes
• 1% minorities--Greek and Armenian Orthodox

Living Conditions

Diet and Nutrition

• Breakfast is usually lebne--kefir cheese--or cheese with pita bread, olives, fresh vegetables and can also be accompanied by foul, which are chick peas and foul combined with garlic, lemon, and olive oil and hot tea.
• Lunch is the main meal of the day consisting of dishes combined with rice and lamb, beef, or chicken served along with pine nuts and almonds.  Sometimes yogurt is added and always fresh vegetables or salads such as Tabouleh, or Fettoush--finely cut up vegetables tossed in garlic, lemon, and olive oil and topped with fried pita chips.  Some dishes are made with sauces containing vegetables and meat to go over the rice.
• Dinner is usually the lightest meal of the day consisting of lebne, cheese, olives, fresh cut veggies, pita bread and hot tea.
• After lunch and dinner they usually have fresh fruit.

Housing

• Apartment complexes--most buildings have up to 6 to 7 floors.
• Villas

Clothing

• Conservative
• Modern and Stylish--Top fashion icons in Lebanon
• Hijab
• Traditional 

              Kamel Danab

Recreation and Sports

• Soccer
• Swimming
• Fishing
• Hiking
• Skiing
• Windsurfing
• Kayaking
• Body Building

Leisure Activities

• Eating out with the whole family
• Picnics in the mountains or country gardens
• Visiting family members or friends.
• Sewing
• Painting
• Arts and Crafts

Social Security

• Lump-sum benefits only
• Covers employees in industry, commerce, and agriculture
• Qualifying conditions such as:  old age benefit, disability benefits, and survivor benefits all with specific rules

Health Care

• Most Lebanese are privately insured
• Some are registered with the National Social Security Fund (NSSF) and have partial coverage
• Local nationals who want more comprehensive coverage can buy private policies offered by MediCare International.
• Policies providing corporate group coverage are used by companies registered at the NSSF to supplement the benefits provided by the government's healthcare system.
• International private medical insurance is available for non-Lebanese living in Lebanon.
• Costs for healthcare vary between hospitals and doctors.

Language
When doing business in Lebanon it is always best to learn some of the greetings at least like Marhaba (hello) or shukran (thank you).  Normally, most businesses speak fluent English, but you might need a translator if you are dealing with business people in the souk (market).

• Lebanese
• Proper Arabic
• French
• Armenian
• English

Fun Facts

Myth confirmed: Ski and swim in a day April 07, 2012 01:21 AM By Alex Taylor The Daily Star

• You can swim in the Mediterranean Sea and ski in the mountains at the same time.
• Lebanon means white--named for its snow covered mountains
• The first law school ever built in the world was in Lebanon
• Beirut was destroyed and rebuilt 7 times.
• Lebanon is the only Middle Eastern country that has no desert.
• Byblos is the oldest city in the world.
• Lebanon is mentioned in the Bible 76 times, Sidon 36 times, and Tyre 63 times.
• Lebanon has 1 doctor for every 10 people
• 70% of the students are in private schools

      

Lebanon

http://www.youtube.com/watch?v=-hxTK1Hy8B8

Why I chose Lebanon. . . . 

I chose Lebanon because I lived there in Saida for almost seventeen years.  I married a man from Lebanon, and I have three children.  I lived with my husband's mother for almost fourteen of those years.  I love the Arabic culture.  The food, music, belly dancing, and Arabic movies.  Especially the very old Egyptian ones.  The food there is fantastic and my husbands family were all great cooks.  I also learned to cook just by watching my mother-in-law.  I love the life there.  It is very family oriented.  All the family would meet each summer at my mother-in-laws house.  So, the house was always packed.  We always looked forward to everyone visiting.  Life is very laid back there.  They move at a much slower pace than the US.  Everyone knows everyone else, especially their neighbors.  On one side of the house I could see the port of Saida and the Mediterranean Sea.  On the other, I could see the mountains.  I used to love early mornings the most because around five in the morning all the mosques together would be singing songs of Allah and the sounds would echo off the mountains and made the most beautiful sound.  I would love to go out on the balcony and just pray and it definitely took my spirits to another place.   I honestly wish during all of those years that I could have visited more of the archaeological places there, but a good bit of the time I was there, Lebanon was attacked by Israel and then once again a war broke out between the Christians and the Muslims.

https://www.youtube.com/watch?v=W9OE438-F00&list=RD02quzp1yQvQro

Lebanese Tourist Attractions

Raouche'

Raouche'

Raouche', which means "Pigeon's Rock" is in the Mediterranean Sea right off the coast of Beirut's downtown Corniche.  It is famous because a lot of people like to dive off it and some have died doing so.  The pic below is showing how close to the Corniche Raouche' is.
 

Telepherique

Telepherique in Jounieh

One of the most popular activities for tourists in Jounieh,the Telepherique line transports passengers from the bay of Jounieh--Christian city in Beirut--above the maritime highway and the pine-forested steep mountain at an altitude of 650 meters, which takes you to Our Lady of Lebanon shrine in Harissa--which is shown below.  The Maronite Patriarch of Antioch named her the "Queen of Lebanon" after its completion in 1908.

Our Lady of Lebanon

Jeita Grotto

Now I would like to show you one of the famous sites in Jeita, Lebanon one of the 7 Wonders of the World called Jeita Grotto, which is where my son-in-law took me after he and my daughter were engaged.

Upper Cave of Jeita

Lower Cave of Jeita 

Lower Cave of Jeita

The Jeita Grotto consists of two separate, but interconnected, karstic limestone caves spanning over 5.6 miles.  The caves are located in the Nahr Al-Kalb--Dog River-- valley in Jeita.  They were inhabited during prehistoric times, but the lower cave was not discovered until 1836 and can only be visited by boat.  The underground river provides drinking water to more than a million Lebanese.

In 1958, the upper galleries were discovered above 200 feet above the lower cave, which was accommodated with an access tunnel and walkways so that tourists can have safe access without disturbing the natural landscape.  The upper galleries house the world's largest known stalacite and is composed of a series of chambers with the largest peaks at a height of 390 feet.

Baalbek

Baalbek

Baalbek is a town in the Beqaa Valley of Lebanon east of the Litani River.  Earlier known as Heliopolis, which in Greek mean City of the Sun.  It dates back about 9,000 years and some archaeologists believe the ruins may not be Roman, but might actually date back to the time of Cain and Able.

Downtown Beirut

Downtown Square

Newly Renovated Downtown Beirut

Saida

Saida's Sea Castle

Sidon's (Saida) Sea Castle is the most prominent archaeological cities in the city.  It was built by Crusaders in the 13th century.  Crusaders used Sidon's Sea Castle to protect the city's harbor and ensure that troops from Europe could land safely.

Saida from the Coast Line

Market in Saida