The new nuclear deal with Iran means the opening of a whole new market for global brands. But could it also mean an open world to Iranian brands.
Can you even name an Iranian brand? You might be able to soon. Plus, putting a pair of Nike Lebron 12s on their feet and an iPhone in their hands might be exactly what makes the nuclear deal work in the long run.
Obviously, the fast movers after the new Iran deal will be the energy companies. Yes, Iran already pumps oil but to get up to speed with global demand and modern, efficient technologies, Iran is going to need outside investment and expertise. The biggest names in the oil world will all be lining up for access.
In fact, anticipating a deal, they were already putting the diplomatic infrastructure in place. The New York Times reports that last month Royal Dutch Shell, Total and Eni met with Iran’s oil minister—and “Shell says it has already discussed potential areas of cooperation.”
With oil wealth flowing back into Iran, other brands see the nation as an attractive, underdeveloped market. Iran’s consumer landscape is truly unique. There are nearly 80 million Iranians, with a flabbergasting 60 percent of them under the age of 30. This population has long had access to the internet, so they know which consumer products are out there—but thanks to trade sanctions, they could hardly purchase them, resulting in an extraordinary amount of pent-up demand. Though, over the years, Iranians have found creative ways to get coveted American consumer products like Nikes and Apple iPhones.
Even during the sanctions, Iran was the seventh-largest cosmetics market in the world.
Iranian consumers have a high opinion of Western products, especially German brands. In June, IranPoll quizzed Iranian consumers about the quality of products from 10 different countries. Germany topped the list, with the US rounding out the top five. Curiously, Russia and China, which both continued to trade with Iran throughout the western sanctions, finished in 9th and 10th place, respectively.
Big brands in the auto, airline, processed foods, consumer credit cards and fashion industries are already talking glowingly about Iran’s potential. “French carmakers Renault SA and Peugeot have large but dormant operations in Iran that will likely be revived,” a Dubai-based analyst told Bloomberg. Danone also has existing operations in the nation. Another informed the Wall Street Journal about a curious Iranian branding bit of trivia: “Tissues still in Iran are called Kleenex after 37 years.”
Part of the idea behind the Iran deal is that extending the horizon on nuclear engagement will allow, in basic terms, Iran’s old revolutionary hardcore to shrivel and be replaced by a more west-friendly generation of leaders. A generation that reads alQuran with an iTunes app.
— Walt Whitman APCP (@WhitmanAPCP) June 10, 2015
Meanwhile, Iranian brands that have long gotten a boost from a lack of imported competition are going to need to learn to swim quickly. Knock-off brands, which have faced no official competition—like Pizza Hat, Mash Donald’s and Raees Coffee—are especially at risk.
Mash Donald’s in Tehran, Mashhad pic.twitter.com/haATlyzZu2
— Ian Deveney (@DeKroonCat) November 11, 2013