Creative Souqs

A few years ago I went to a shopping center in Jeddah, which actually looked more like a small shopping mall with about 25 to 30 stores. The aspect that struck me the most (as someone coming from Europe) was that all these stores carried only one type of item: Gold jewelry. This is of course not unique to Jeddah. You will find that in practically every city in the Middle East and North Africa. And of course this is not just limited to gold jewelry. Often Souqs and bazaars are divided up into sections, each specific to a particular category of products, such as jewelry, clothing, leather goods, toys, fresh foods, spices, crafts, furnitures, ...

As a marketeer coming from Europe, you often wonder how can every one succeed in such a competitive environment? In most countries of Europe and North America, the usual marketing approach is to locate your business in an area with high demand and low competition. Therefore, stores offering similar products are more spread out.
However, there are clear benefit to be close to your competition. Besides the obvious benefit to customers which have better selection and bargaining power, the shop keeper also benefits. As customers do not need to run around the city for all their shopping needs, Souqs attract huge masses of customers.
But there is according to me a far more important benefit. In such a strong competitive environment, shop keepers need to find ways in differentiating themselves from their neighbors. This need is often translated into becoming more innovative and creative. For example, a gold jeweler would through the feedback from his customers request from his goldsmith to elaborate a newer and/or better design. That's why when I visited a jewelry store in that market in Jeddah I would rarely find a duplicate jewelry design in another neighboring store. The result is that you have literally tens of thousand of different designs in gold Souqs of the Middle East. Far more than you would find in New York or London. The same applies to many other products which are locally produced, especially by local craftsmen, which maintain this close and personalized relationship with store owners. This is probably the main reason why historically the Middle East and North Africa exhibit such a rich creativity in traditional crafts products.
Unfortunately, with the rise of standardized industrial products from local factories, from Europe, and mainly now from China, this close relationship between customer, shop seller and manufacturer has weakened a lot, but it hasn't disappeared altogether either.
I think there are important lessons to learn from the creative environments that Souqs have engendered. The fact that competitive environment fosters creativity and innovation is of course well known. But often the close relationship between end customers and manufacturers is somewhat overlooked and needs to be nurtured. This also means to create a more Souq-like environment, where new innovative products and services can develop.