Multinationals looking to swoop into Iran as most sanctions lift will find important sectors of the 80 million-strong market already conquered by domestic brands. While most domestic industries are uncompetitive by global standards, they are strong enough to create both risks and opportunities for all players.
Iranians are hungry for foreign brands, but 95% of Iran’s food market and 80% of its pharmaceutical market have been “captured” by Iranian companies, according to a poll mapping the frequency with which Iranians mentioned the brands they use in daily life.
Iranian brands also dominate sales of hair products, clothing, and vehicles, according to the poll, which was conducted in October 2015 by Toronto-basedIranPoll.com in partnership with Tehran Bureau.
The strength of domestic brands results in part from the way Iran has been forced to fend for itself by the stiffening of international sanctions. Governments have made economic self-sufficiency a priority, following policies of import substitution and imposing high tariffs on most imported goods to nurture domestic industries.
Iran’s food industry is crowded with domestic manufacturers like snack-food producer Maz Maz, ketchup maker Delpazir and dairy producer Kalleh. “One of the biggest advantages of Iranian food brands thus far has been their much lower price relative to foreign brands,” said Ebrahim Mohseni, a research associate at the University of Maryland, who studies public opinion in the Middle East. “In many countries neighbouring Iran, international brands like Pepsi, Coca-Cola, Nestle, Kraft and Heinz face little or no competition. This is not the case in Iran.”
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