Saturday, April 28, 2012

Designing a Palestinian Shopping Mall for Israeli Clients

The Idea of a Palestinian Service and Shopping Mall for Israeli Clients

Palestine has cheap labour, so most services can be offered at much more attractive prices than in Israel. Same applies to some goods from Palestinian production that would have to go through a complicated procedure to enter the Israeli market, but could be sold easily under Palestinian jurisdiction. Also some goods receive different taxation, which then could be offered at more attractive prices.

Choosing a Location: Come Close to Your Clients

The Westbank is zoned in A- B- and C- zones, A-zones being inaccessible for Israelis (at least according to Israeli law), C-zones being virtually impossible to develop for Palestinians thanks to the Israeli military administration (that calls itself civil administration). So this business model is likely to be placed in a B-zone, administered by the Palestinian Authority, and security being under Israeli responsibility.
Furthermore, it makes sense to place the mall not too far away from the clients. Looking at the densely populated Tel Aviv area, and the ABC zoning map, it seems that the Palestinian villages north of Ariel Junction, for example Kifl Hareth, being just 20 minutes from Tel Aviv via Highway 5, and 5 minutes from Ariel, might be a promising location.
Another option may be, that a '48 Palestinian (Israeli passport holder) gets hold of a piece of land in a C-Area -- so to speak a settlement, but develops it to be Palestinian.
Placing the Mall inside Israel might be another option, but it is increasingly hard to get work permits for Palestinians to Israel. Labour regulations and taxation seem less attractive for businessmen. Also having to officially import all the products, and submitting everything to Israeli taxation may reduce a lot the attractiveness of such a business model.
Therefore: B-Zones is probably the place to invest. An Israeli partner is probably still necessary, at least for advertising in Israeli media and to get permission to mount a huge banner at the Ariel junction roundabout.

Palestinian Threats and Israeli Paranoia

How to make clients feel safe, that is definitely not an easy one. Still, there is a small threat of attacks to this kind of soft targets. And, there is a well-known Israeli obsession with security.

Security and PR in Palestine

Well, I wouldn't want to create a fortress, but a few technical measures and some security staff to avoid violence happening on the premises might be required. At the same time, a good campaign is necessary, creating awareness that this business is not about normalization of the occupation, but about creating jobs in Palestine, and economically competing with Israel (independently from occupation, from two-state or one-state or whatever other political discussions). The campaign should include some testimonies from local employees, happy about their job, and some testimonies from businessmen happy to beat their Israeli counterparts in this competition.

PR and Entering the Market in Israel

Starting with advertising addressing Arab Israeli population, eventually one would expand the client base by creating awareness using social media, word of mouth, and a good website that offers lots of great discounts in Hebrew language.
To face the Israeli fear, word of mouth can be quite helpful, maybe accompanied with a campaign about fear and ignorance, ridiculing Israeli paranoia... for those that are still hard to convince, there could be delivery services or mail order (via the Ariel post office). Maybe a network of informal courier services would be built up, that commute between Tel Aviv and the mall to get things through the checkpoints without official import procedures.


What Kind of Goods and Services to Include in the Mall

Some ideas were mentioned in an earlier post already. These goods and services look promising due to the huge difference of market prices between Israel and Palestine:

  1. Gas station (fuel 15% cheaper)
  2. Cigaretes (14.5 Shekel instead of 20)
  3. Hairdresser (for 25 Shekel instead of 100)
  4. Drycleaner (4 Shekel per shirt instead of 10)
  5. Tailor (small fixes for 5 Shekel instead of 50)
  6. Pharmacy (Palestinian generics are half the price or less; besides you can get prescription drugs without prescription)
  7. Medical services (cheaply get extra treatments that the Israeli insurance doesn't cover)
  8. Manicure/pedicure/massage (a fifth of the price)
  9. Car workshop (about one quarter the price as in Israel)
  10. Bike workshop
  11. Car wash (20 shekel for a thorough inside and outside wash)
  12. Fruits and vegetable market
  13. General Supermarket
  14. Restaurants
  15. Plastics and other factory outlet shops (Royal Co., and others)
  16. Shoes "Made in Palestine" outlet store
  17. Knafeh / sweets outlet from Nablus
  18. Furniture from local production
  19. Nuts and dried fruits shop
  20. Fresh juices
  21. Ice cream from Nablus (Al-Arz)
  22. Handicrafts shop with pottery and glass from Hebron, carpets, embroidery, etc.
  23. Possibly a bar/disco
  24. Free parking, free childcare with a huge playground, cinema, etc.
  25. KFC and some local-flavor fastfood (falafel for 4 shekel, shawarma for 10)

Customer-Friendliness

The Israeli shopping landscape is pretty much comparable with Europe. Most retail prices are fixed, and transparent with labels etc... For example, you go to a car workshop, they give you a quotation, you will confirm, and then they start to do the repair. Palestine tends to be much cheaper but less transparent. So, the operator of the mall should define certain standards and policies to come closer to the client's purchasing habits. Obviously Hebrew language would be one of those. Maybe some kind of money-back guarantee for anything purchased in the mall would create additional trust in Palestinian quality.

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