Place Still Matters in a Digital World: Lessons from Boutiqaat

The Strait of Hormuz is only the most recent Middle Eastern example of the age-old maxim “location, location, location.” Once known primarily by traders and diplomats, the narrow waterway became synonymous during the 2026 Iran war with the outsized impact geography can have on global markets.

From regional conflicts and oil riches to religious traditions and consumer behavior, doing business in the Persian Gulf requires a deep understanding of place. Even when that business is online, even when it is powered by influencers—and especially when it sells global ideas about fashion, beauty, and lifestyle to a market with distinctly local customs, says Harvard Business School Professor Juan Alcácer.

For years, the internet promised a borderless marketplace where geography mattered less, and global trends spread instantly across cultures. But Alcácer’s case study about Kuwaiti e-commerce startup Boutiqaat suggests that even digital businesses built on global platforms remain deeply shaped by local politics, customs, and consumer behavior.

“Geography still matters in terms of culture and preferences of users,” says Alcácer, the James J. Hill Professor of Business Administration. “Even if we are in a world that is hyper-connected, where everybody's watching the same movies and everybody's listening to the same music, there's still a lot of room for variation by countries and by regions.”

Alcácer wrote “Boutiqaat: Influencing Retail in MENA” in 2025 and updated it in March, just after US and Israeli forces launched a campaign against Iran that brings new complexities to the future of business in the region. A specialist in how location affects business strategy, Alcácer thinks the latest conflict will push the region toward more home-grown businesses like Boutiqaat.

“Historically, the Middle East has experienced significant geopolitical turmoil,” says Alcácer, who wrote the case with Noor Al Qadhi, an MBA student at HBS. "It has been a place where elements from multiple cultures converge and emerge with distinctive characteristics. This case is an example of the entrepreneurial energy common in the region.”

The making of a Middle Eastern startup

Founded by Kuwaiti entrepreneurs Abdulwahab Al Essa and Abdullah Al Julaibi in 2015, Boutiqaat quickly grew into the region’s first influencer-driven marketplace. It started selling international brands like MAC and NARS Cosmetics to trend-conscious consumers in the Gulf Cooperation Council, recognizing a passion for beauty, especially among wealthy women, that looks different from beauty culture in Western markets.

“The ability of women to express themselves in terms of fashion is very alive, but it's done in a very private setting,” explains Alcácer, who has traveled in the region extensively.

Boutiqaat quickly expanded to private-label brands co-developed with local influencers. In a 2017 experiment to market Arabic fragrances, the company learned that private-label perfumes sold much better when the influencer’s name wasn’t attached to them, but when they carried generic labels like “haze.” That’s in part because fragrances are unisex in the Middle East, so men wouldn’t buy a female influencer’s brand name and vice versa.

“When an influencer promotes someone else’s brand, the sales are strong, and people buy eagerly,” explains vice president of sales Rashed Al Julaibi. “Yet they discovered an unusual resistance when the product carried the influencer’s personal branding.”

Boutiqaat also learned that online retail has a limit in the Middle East—especially in the scent market, where consumers like to smell the merchandise before purchasing. “Socialization happens in the markets, in the souks, and it happens at night, because it's very hot,” explains Alcácer.

The value of micro-influencers

Marketing through social media appealed to Boutiqaat’s executives, who recognized that content creators carry weight with consumers, and the Gulf states were ripe for expansion with web-friendly regulations and an internet-savvy population.

But they didn’t want to fall into a trap they saw ensnare many US companies, where star influencers become so powerful that they dictate the agenda. In that model, which Alcácer calls the “old way,” companies convince an influencer to use their products and promote them. “At some point in time, the influencers demand more money, they start basically promoting their own brand, and they as influencers are kind of the product,” he says.

Boutiqaat didn’t want big influencers, instead filling its online storefronts with “micro-influencers” who showcase the company’s products, and, if successful, can develop their own private labels. By the end of 2025, the company aimed to bring on 3,000 micro-influencers, those with 100,000 or fewer followers who tend to be more loyal.

“They use the really useful part of the influencer, which is basically that they have a following, but they don't depend on the influencer,” Alcácer says.

An “Influencer Academy” selected and onboarded new promoters, guiding product launches and setting clear performance metrics. The academy specialized in handling influencers, who Alcácer says are an unusual workforce with “very diverse and very different habits”—including some who didn’t take calls before noon.

The strategy has fueled success: Boutiqaat grew rapidly from a modest warehouse in 2015 to a regional powerhouse by 2025 with 12 million app downloads, 10 million filled orders, and a presence in at least eight countries. With over 1,000 employees, the startup has helped influencers launch 270 brands and has considered expanding beyond the Middle East or possibly into more physical retail.

The influence that matters

The case offers lessons for any company whose success depends on local culture or influencer-driven marketing, Alcácer says:

Social media remains a powerful means of communication

Boutiqaat’s executives were quick to observe how social media was impacting news and communications, with co-founder Al Essa departing mainstream media some 20 years ago after spotting its potential. “I saw this shift and realized that if the power is moving toward social media, marketing spend would inevitably follow,” Al Essa explained.

A bigger audience is not always better

Not all influence is created equal, Boutiqaat executives realized. Alcácer points to statistics showing that micro-influencers enjoy 3.9% engagement rates, compared to 1.2% from larger personalities. “Look at the lifecycle of the influencers. As soon as they become too powerful, [companies] let them go on their own,” he says.

The local culture makes a difference

Boutiqaat grew from the realization that influencers are culturally driven. The company saw variation in how Middle Eastern consumers would follow local influencers but not others located in different regions, for instance. “An influencer in the United States may not be as important for somebody in the Middle East,” explains Alcácer.

Photo credit: Adobe Stock/sofiko14.