Middle East retail boom far from spent
The Middle East may have seen revolution, riots and rebellion last year - but they show little sign of deterring retail brands from coming to the region.
That’s the verdict of a new ranking of the most attractive emerging markets for international brands, which confirmed the UAE as the region’s retail powerhouse - and said things are looking up everywhere from Amman to Riyadh.
Consultant AT Kearney has released the results of its Global Retail Development Index, which features four Gulf nations in the Top 20, led by the UAE in eighth spot. While the countries of the region can’t compete with booming Brazil in top spot, or chase China out of third place, the report’s authors have seen strong sales of everything from wristwatches in Lebanon to electronics in Kuwait.
Emanuele Savona, a senior executive at AT Kearney, told 7DAYS the UAE remains the easiest market for foreign retailers to take their first step into the region - even if neighbouring countries such as Qatar and Saudi Arabia may promise bigger returns in the coming years.
The firm’s report said that the UAE’s safe haven status during Middle East unrest last year “put it back on the map for many retailers” and that booming business saw Dubai mall developer Majid Al Futtaim Holding record its best ever year in 2011.
However, while the UAE may be the easiest place to set up shop, foreign firms can no longer swagger in and clean up, Savona said.
“It is becoming harder to enter the market and be very successful because the market is saturated by other brands,” he said.
While tourists may make sure that the country’s ‘mega malls’ are hitting new highs, he added, the preferences of UAE residents are seeing the retail market enter “the second stage of its development”.
‘Convenience’ is the new buzz word when it comes to customer demand, with shoppers increasingly demanding small-scale stores close to their homes and offices, selling ready-to-eat food and other essentials. It’s a trend which means brands will have to splash out more on extra stores, and a better logistics operation to serve them.
But if the UAE remains top of the shops among retail analysts, we could soon find out if the same is true of shoppers themselves.
The Dubai Department of Economic Development yesterday announced plans to rank businesses, including car dealers and electronics stores, on “consumer friendliness”.