Distribution Channels

The primary point of entry for foreign manufactured goods for direct distribution to the public, wholesalers, distributors, or retailers is Casablanca. However, ferry service between Morocco and Spain and France does allow for goods to be imported and exported by truck over land and water.

Product Pricing Structures
The average sales margin for wholesalers varies from 5% to 10 %, for retailers it is 25% depending on the product. For luxury products it is 30% and for high turnover products such as food products, it is 15%.

Use of Agents/ Distributors; Finding a Partner
Foreign manufacturers and exporters are represented in the market either through their own branch offices or through authorized agents/ distributors. Distributors customarily provide technical support to end-users and often have contractual arrangements with their principals under which the local importers provide in-bond warehousing. Agents/ distributors are often necessary to assist the foreign firm with documentation in the French language. Although this helps in terms of language and shipping, often the products go through so many more distribution channels that the item ceases to be competitive in the Moroccan market. As always, volume is the key. Large-scale stores based on the "Costco" model are a relatively new phenomenon, and a good source for direct distribution of consumer products.

Direct Marketing
Marketing services and advertising agencies are increasingly focusing on direct marketing in response to saturation in the traditional media. Common forms in Morocco are point-of-sale promotions, games, moving billboards, direct mail and door-to-door. Avon and Oriflame are active in door-to-door cosmetic sales.

Joint Ventures/ Licensing
Moroccans are increasingly interested in joint venture business opportunities with foreign partners as a way to modernize their factories or license a technology.

Steps to Establishing an Office

-Registration Procedures:

  • Stock companies must file their articles of association, signed by all shareholders, with the local trade registration office (Registre Local du Commerce). An announcement of the company's formation is then published in a newspaper of legal announcements. The company must subsequently file with the registration office of the local court a registration request and declaration containing information on the company's activities, its address, the names of managers and directors and the amount of paid-in capital. These documents should be filed in Arabic, but the courts also accept French. A company may not begin business operations until it obtains a registration number, and the process takes about six weeks after filing required documents.

  • Limited Liability Companies must first register their signed articles of association with the trade register and then file the articles with the registration office of the local court. After the articles of association are filed at the local court, announcement of the formation is published in a newspaper of legal announcements. The limited company then files with the trade register a request for a company registration number.

It is recommended to use an accounting or law firm to prepare the registration documents because of the language requirements.

It is possible for a foreign investor to establish a wholly-owned company in Morocco without the need for a local partner.

Selling Factors/ Techniques
Most local distributors of imported merchandise expect their suppliers to provide them with substantial advertising and promotional support, particularly when introducing a new product or brand name. All sales promotional material and technical documentation should be in French. Clear and simple French-language operating instructions, plus, where possible, illustrations help the consumers, not to mention the sales force. Foreign firms often need to train local staff, provide full documentation of products in French, supply spare parts in adequate supplies and cooperate in advertising and marketing. Direct mail is becoming very popular.

Pricing Product
Commodity prices are freely determined by the market without government involvement with the exception of staple commodities such as gasoline, vegetable oil, sugar and subsidized flour. On October 5, 1998, Morocco implemented a new tariff system for major staple commodities -grains, oilseeds and products, and sugar. The new system computes duties in a way that avoids wide fluctuations. This has resulted in more stable local prices of the imported commodities, but also significantly higher duties on the low priced imports.

Sales Service/ Customer Support
It is important that the foreign firm supply their local distributor with customer and internal manuals and documentation in French. Training by headquarters representatives of management, sales and service personnel is important and can do much to support the relationship and build product loyalty. After-sales service and product guarantees are extremely important, as are simple maintenance and care instructions for the consumer. As products improve in quality and customers become increasingly price conscious, emphasis on simple care and maintenance are critical techniques in illustrating the longevity of products properly cared for.

Selling to the Government
Selling to the Government is handled principally through government tenders and on rare occasions through mutual agreement or private contract. In the latter case, the government applies directly to firms, which have been traditional suppliers through their representatives in Morocco. Tenders are published in newspapers and announcements are sent to Embassies. Each Ministry issues its own tenders. Deadlines range from 30 to 90 days. The bidding documents are published in French and replies must be in French using French or European standards.

In December 1998, the Government Council approved a decree overhauling the public procurement system, so as to enhance transparency, accountability and competitiveness in procurement. In particular, the decree mandates public bid-opening sessions, substantially narrows the scope of restricted bidding or sole-sourcing, extends the period of bid submissions, and provides for mandatory special controls and audits for contracts valued at over $500,000. The decree entered into effect in summer 1999, and has reinforced the trend away from direct negotiation and toward open tenders in public procurement.

Protecting your Product from IPR Infringement
Morocco has a relatively complete regulatory and legislative system for the protection of intellectual property. Morocco is in compliance with its WTO TRIPS obligations. Morocco is a member of the World Intellectual Property Organization (WIPO) and is a party to the Bern Copyright, Paris Industrial Property, Universal Copyright, and Brussels Satellite Conventions. Morocco is also a signatory to the Madrid, Nice, and Hague agreements for the protection of intellectual property.

The Office of Industrial Commercial Property (Office marocaine de la propriete industrielle et commercial) in Casablanca serves as a registry for intellectual property rights for patents and trademarks in the industrial and commercial sectors. The Moroccan Bureau of Copyrights (Bureau marocain de droit d'auteur) in Rabat registers copyrights for literary and artistic works, including software.

Need for a Local Attorney
There are a number of English, French and German firms as well as Moroccan firms with strong international expertise. New-to-market firms are strongly advised to obtain the services of a law firm or the legal department of one of the multinational accounting or consulting firms.