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UAE mall footfalls rise, but e-commerce gaining pace

05-04-17

Business for brick-and-mortar retailers remains strong in the UAE but e-commerce momentum is gaining pace, according to Dubai Chamber.
In a report, issued on Tuesday, the chamber said e-commerce is expected to register double-digit growth in the medium term though non-store retailing just accounts for three percent of total UAE retail sales.
The report comes a week after Amazon.com agreed to buy UAE-based Souq.com, a move experts believe will propel growth of e-commerce sector.
Dr Ali Al Khouri, first deputy chairman of the Cairo-based Arab Federation for e-Commerce told Arabian Business on Tuesday that the MENA region’s e-commerce sector is expected to grow from $20 billion in 2017 to $200 billion beyond 2020.

According to Dubai Chamber, the value of UAE’s retail sector is estimated to reach $71 billion by 2021 from $56.6 billion by end of 2016, growing at a compound annual growth rate (CAGR) of 4.9 percent.
The sector contributes around 11 percent to the country’s GDP, while Dubai’s retail and wholesale sector accounts for 29 percent of GDP.
Demand in the retail sector remained steady last year, supported by a 5.8 percent year-on-year increase in footfall within shopping malls, the chamber said. It added that the footfall increase was driven by rise in number of tourists, absence of sales tax and expansion of sales events, promotions and shopping festivals.
The chamber also said the largest shopping malls in the UAE operated by Emaar Malls and Al Futtaim Properties witnessed steady increase in the number of visitors with credit card transactions increasing 5 percent year-on-year during the Dubai Shopping Festival 2016, signalling rising consumer confidence.
Dubai saw completion of a quarter million square metres (sqm) of new retail space last year - the highest level since 2010 – while supply remained stable in Abu Dhabi at 2.6 million sqm, according to JLL statistics.
Dubai Chamber estimated around 717,000 sqm of new retail space will be completed by 2018, while Abu Dhabi is expected to see a supply of 467,000 sqm of new space over the same period.
Hamad Buamim, president and CEO, Dubai Chamber, said Dubai enjoys several advantages that will drive growth in the retail sector going forward, such as constant influx of tourists to the emirate, rising incomes, and its ability to attract retailers from around the world.
“However, demand for retail space is projected to see a moderate increase in the medium term, which may potentially lead to market saturation,” he said.
In February, Sapna Jagtiani, primary credit analyst with S&P Dubai told Arabian Business an appreciating dollar was making it more expensive for tourists to shop in the UAE and may lead to Dubai losing its coveted “shopper’s paradise” label.

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Please post responsibly. Commenter Rules

Posted by: One Guy
Wednesday, 5 April 2017 1:04 PM[UAE] - United Arab Emirates
Very conflicting report, Hamad Buamim, president and CEO, Dubai Chamber, said Dubai enjoys several advantages that will drive growth in the retail sector going forward, such as constant influx of tourists to the emirate, rising incomes, and its ability to attract retailers from around the world.

Problem is salaries are absolutely not going up and while the level of tourists improved last month, the level of visitation is not drastically increasing. The costs of doing business will severely impact the regions ability to continue to attract retailers from around the world as the value proposition is broken with the shoppers paradise label now definitely lost.

Footfall numbers are always overstated and have been increasingly difficult to convert to sales, while the mention of no sales tax as a key driver for visitation is obviously about to end. The evidence out there today from many in the know who are saying that there is currently a retail recession underway.

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Doha's $1.8bn mall opens today Doha Festival City includes over 550 retail units, five-star hotel and an outdoor running trail

05-04-17

Al-Futtaim’s Doha Festival City, a $1.8 billion leisure, entertainment, and retail development, opens its doors for business today.
The mall postponed its opening date several times in recent months and was originally due to open last year.
The flagship development includes over 550 retail units, with a gross building area of 433,000 sq m, and includes some of the leading international and local brands, including Qatar’s first IKEA store (opened in March 2013), the first Harvey Nichols in Doha, a full-sized Monoprix hypermarket, and a range of entertainment options including a snow park, Angry Birds and Virtuocity theme parks. The at 165,000 square metre development also includes an 18-screen VOX 4D cinema complex.
The new development, located in the north of Doha with direct access from Al Shamal and Lusail Roads, also includes a five-star hotel and convention centre.

The 3 km outdoor leisure trail, which includes a running and walking path at Doha Festival City



Last month, Doha Festival City revealed its plans for a 3km outdoor leisure trail, which includes a running and walking path, as well as an adjacent cycling lane with technical trail features specifically designed for mountain bikes. The running track also has exercise stations along the route, allowing both casual and more serious runners to exercise and enjoy the green spaces being created as part of the project.

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Focus: 'Amazon did not come to the region for Souq.com alone'

05-04-17

The impending entry of global e-commerce giant Amazon to the Middle East region is likely to reverberate across the retail industry for some time.
While no-one can predict with certainty the full impact of Amazon’s acquisition of Souq.com this week, it’s certainly going to wake up what has been a sleeping giant in the region.
Advisory firm AT Kearney said in its GCC e-commerce market study last year that the region has the potential to become the world’s fastest growing online market.
With an estimated size of $ 5.3 billion (AED 19.4 billion) in 2015, e-commerce at present contributes only around 0.4 percent to the region’s GDP. However, the study predicted the market could quadruple its value to $20 billion by 2020, if the right enablers were put in place.


Fadi Ghandour, managing partner at Wamda Capital and founder of logistics firm Aramex, said the acquisition of Souq.com is a massive vote of confidence in the region, and its emerging e-commerce sector.

“This is the final recognition that the technology and digital industry in the region is happening and Amazon is the big statement on this,” Ghandour told Arabian Business.
“There is no-one bigger and more capable than Amazon, maybe Ali Baba. Maybe it will get others to pay attention to the region, like we have seen in previous experiences.
“I think you will see a lot more activities, and possibly some other consolidations. There are smaller companies, like Namshi for example, who will have to be creative and capable of staying and competing in the market. But it also means that they will also be targets [for acquisition].”
Ghandour is well versed in Amazon’s existing operations in the Middle East, having helped introduce the online retail giant to the region.
He said: “Amazon did not come to the region for Souq alone. Amazon came to the region because they saw the potential.
“I know, because my history is in Aramex, and the history of Aramex is introducing Amazon to the region. When Amazon started selling in the region, it was through the shop and ship product [model] that Aramex created and eventually it started going directly through Aramex.
“What Amazon sells to the region in e-commerce, if I can estimate it, they are already doing in the region of $150 million to $200 million worth of sales. It's a small amount for a company like Amazon, but it's not a small amount for the region.
“Whoever is going to play in that space is going to have to face a company that is going to bring all of its capabilities.”
Omar Kassim, founder and CEO of e-commerce platform JadoPado, described the acquisition as “a watershed moment for the region’s e-commerce space”.
“It validates the businesses that we've been busy building, and should be an inflection point at which we see new businesses and concepts come to market together with more capital flowing into the sector from investors of all types,” he said.
Paul Cuatrecasas, CEO of Aquaa Partners and expert on non-tech acquisitions of tech companies, said the acquisition will not necessarily accelerate e-commerce in the region.
“It’s already ramping up at around 30% year-on-year, but longer term, the deal may well prove pivotal because Amazon is determined to succeed in the region and Souq.com will have access to Amazon's technology, data, resources and experience,” he added.
Traditional models no longer sustainable
Ghandour said the traditional model of retail will see a shake-up as disruptive e-commerce models start to have a greater influence on retail processes.
“Just as Walmart, a $400bn sales company, needs to pay attention in the US, I think retailers [here] need to pay attention,” he said.
“The traditional models could have stayed a bit dormant when Souq was around because Souq did not have the massive and deep pockets that Amazon does. When Amazon comes we will see that traditional models are no longer sustainable.”
Kassim said industry players would be hard-pressed to compete Amazon head-one. “It is likely that Amazon will place significant additional capital behind their purchase to cement their position,” he said.
“Their deep operational capabilities will make it that much harder for anyone else. It's why we've evolved our business toward e-commerce technology and bringing an e-commerce platform - JadoPado hotcake together with a new enterprise vertical to market.”
Jadopado’s Kassim said the next five to seven years will be a very interesting period for digital.
“I think [the Souq.com acquisition] will be the catalyst that gets every major retailer to figure out why their existing e-commerce strategies - for those that have them - aren't getting the right concepts to market in a timely manner. And for those that [still can’t], to work out how they can acquire the right businesses, teams and talent to digitise their businesses.”

Ulugbek Yuldashev, CEO and founder of AWOK.com, said the acquisition is unlikely to have any impact on smaller e-commerce companies in the country.
“We don’t see the possibility of any of the major e-commerce players controlling 60 to 70 percent market share. It will never happen and hence we will still have e-retailing companies concentrating on niche product ranges such as fashion, bags and shoes,” he said.
Yuldashev said three-year-old Awok.com, which follows an inventory not a marketplace model, has been able to take the number two slot in the UAE e-commerce industry and been investing heavily in building infrastructure and technology.
“Though our inventory model, we have been to maintain quality and adhere to our delivery times,” he said.
Steve Plimsoll, PwC Middle East, chief digital and data officer, added: “Local retailers are going to have to significantly lift their game. The acquisition will accelerate the transformation of e-commerce in the region from poor quality transactions to truly customer centric experiences.
“Most importantly, we'll see an increase in consumer activity and shift to online-based on the Amazon brand's high level of trust and heritage in innovation.”
New player in Noon.com
Meanwhile, the impending arrival of Noon.com on to the region’s e-commerce scene will add a differet type of competition to what’s already in the marketplace, said Ghandour.
“[Noon founder] Mohammad Alabbar has an advantage which is quite powerful, which is that he has a huge offline offering. There is something to be said about the physical infrastructure on the ground.
“He already has the logistics in Aramex, so he needs to see how he will be able to create that formula that brings his offline power into the online world and make sure that Noon is doing that. But he needs to do it quickly.”

Kassim said the length of time it has taken Noon.com to ready its product for market “speaks to not only the difficulty of bringing a viable product to market in our space, but the pace at which it needs to happen”.
But Cuatrecasas said the launch of Noon.com will shake things up even further.
“One reason Souq needs to be concerned is that it appears Noon.com has a different vision to Amazon – one that may well engage consumers on an emotional level.
“If they get the branding right and start engaging a millennial audience, there’s no reason why Noon.com couldn’t cause Souq.com some serious problems,” he added.
“But to be able to compete effectively, Noon.com will need to quickly demonstrate it can match Souq.com’s range of products and delivery offering, and that may be difficult. Noon.com will be competing against the might of Amazon's technology.”

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Sunil Vaswani tops Indian Rich List for third year running Our exclusive ranking of the Gulf’s wealthiest Indian expatriates.

05-04-17

Sunil Vaswani is once again the Gulf’s richest Indian with a net worth of $7.48 billion, according to the sixth Arabian Business Indian Rich List, which was published on Sunday.
The Stallion Group chairman was comfortably ahead of LuLu Group International chairman Yusuffali MA in second place. Vaswani’s company, based in Dubai, is one of the largest conglomerates in sub-Saharan Africa.
Click here to view the full list
With a net worth of $5.4 billion, Yusuffali MA had a very good 2016, announcing four new shopping malls in the UAE and India in the last six months, as well as plans to expand to the US and Indonesia, as well as numerous new openings in the GCC.


In third place is Dr Ravi Pillai, whose RP Group is the largest industrial contractor in the Middle East. With nearly 100,000 employees, the conglomerate also has interests in property, hospitality, travel and tourism, retail, healthcare and education. His net worth is valued at $4.6 billion.
In fourth place is the Allana family, which runs both the Allana Group and IFFCO, based in Sharjah. Their net worth is valued at $3.6 billion. Making up the top five is NMC Health boss BR Shetty, valued at $3.2 billion.
Being named to the Arabian Business Indian Rich List has become somewhat of an honour in the Gulf community.
So much so, many of the people on this year’s list voluntarily worked with us to provide the most accurate evaluation of their wealth. They provided details of not only their assets and revenues, but their liabilities and - in some cases - their average monthly spending habits. With such specifics, it is difficult to argue against the values determined.
Click here to view the full list
The total wealth of this year’s richest Indians in the Gulf has surpassed $62bn for the first time. There are now an incredible 17 billionaires. The increase in wealth in the GCC is in contrast to what is happening globally, with 11 Indians losing their billionaire status last year amid the government’s demonetisation programme, according to the Hurun Global Rich List.
The wealth of Indians in the Gulf is growing so fast it is now worth counting not just the number of billionaires, but those worth two, three, four, five billion dollars.
How we did it: We studied Indian businesses across the Gulf and assessed their value according to revenues and relevant profit-earning ratios as well as the value of like-businesses that are publicly listed. We then took into account shareholdings and projected values if the company was listed. Individual’s other assets, including real estate, stakes in other businesses, equities and more, plus liabilities, were also considered.

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India overtakes the UAE in list of world's top emerging markets China takes top spot in 2017 Agility Emerging Markets Logistics Index, with the UAE slipping to third

05-04-17

The UAE has fallen one place to third in a global list ranking the world's best emerging markets but still boasts the best business climate, according to a new report.
The 2017 Agility Emerging Markets Logistics Index ranked China top while India moved above the UAE to take second spot compared to last year.
In the business climate sector, the UAE was followed by Qatar in second place, Oman in third and Bahrain in fourth while Saudi Arabia ranked 7th and Kuwait 10th.
The index also said the UAE had the best transport and logistics connections.


It said Bahrain climbed five spots in the overall rankings to 23th, rebounding after years of social unrest that damaged its economy and dampened investment.
The index, now in its eighth year, offers an annual snapshot of industry sentiment and ranks the world’s leading emerging markets by size, business conditions, and transport infrastructure and connections. It includes a survey of more than 800 global logistics executives.
The index looked at the strength of the service sector, urbanisation, security, foreign investment, wealth distribution, and the levels of bureaucracy and regulation confronted by businesses.
“The UAE has taken a strategic view of its development outside the energy sector and continues to improve its attractiveness to logistics providers and their customers,” said Elias Monem, Middle East and Africa CEO of Agility Global Integrated Logistics. “The low energy prices of recent years have prompted other Gulf states to do the same.”
The index also highlighted the emergence of Iran after years of international isolation, leaping eight spots to 18th.
China, the world’s second-largest economy, remains the world’s leading emerging market ahead of India. Supply chain executives identified the direction of China’s economy as the factor most likely to drive global economic and trade growth in 2017.
Robust growth and long-anticipated tax and economic reform pushed India to 2nd in the index, the report said.
Despite upbeat views of India and Iran, industry professionals sounded notes of caution about the broad outlook for emerging markets. Nearly 69 percent expressed concern that the UK’s Brexit vote and the failure of global and regional trade initiatives signal a threat to trade.

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Dubai companies remain optimistic of growth in Q1 2017, says DED

03-02-17

Dubai companies remain positive about growth in the first quarter 2017 compared to fourth quarter 2016, the Department of Economic Development (DED) said on Wednesday.
The growth outlook is backed by infrastructure development in the run-up to Expo 2020 with the government increasing spend by 17 percent in Budget 2017 and job creations under Dubai Plan 2021.
“The survey shows that the business outlook for first quarter 2017 is stronger than that for fourth quarter 2016 and first quarter 2016 in terms of revenues, volumes, profits as well as employment, as respondents anticipate new orders, or projects, and stronger demand for their products,” said Khalid Al Kassim, assistant director general for economic policies, DED.
He added that Dubai’s AED47.3 billion budget for 2017, creation of more than 3,500 new jobs in line with the Dubai Plan 2021 and growing public and private sector activity will the determining factor for boost in business confidence.
The DED’s business confidence index (BCI) score for fourth quarter 2016 rose to 121.0 points, from 116.1 points in fourth quarter 2015.
The results were based on participation by 501 companies who were asked to indicate if they anticipated an increase, decrease, or no change on key outlook indicators such as sales revenues, selling prices, volumes sold, profits and number of employees.
According to DED, manufacturing sector reported the “most confidence” about revenues, volumes, profits, employment and new orders, while the services sector was “most optimistic” about selling prices. However, the trading segment exhibited the “weakest” sentiments with respect to all the parameters.
Within the services sector, the construction segment is “most hopeful” of higher volumes during the first quarter with a net balance of 75 percent based on expectations of new projects/orders.
Within the trading sector, the construction and computer sub-segments are “most optimistic” about volumes during in the first quarter, DED added.

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Dubai to award $3bn construction contracts for 2020 World Expo

30-01-17

Development of the expo site, which the government expects to require $6.8 billion of capital spending, is one of the biggest projects in Dubai's history and will help to open up a new district in the south of the wealthy emirate.
Dubai will award 47 construction contracts worth 11 billion dirhams ($3 billion) to local and foreign companies this year as it prepares to host the 2020 World Expo, the government-backed body arranging the world's fair said on Monday.
That would leave Dubai on track to complete most construction a year before the fair opens in October 2020, Expo 2020 Dubai said.
Deals worth over 2 billion dirhams were done last year.
This year's contracts will include construction of car parking, three districts that will hold most of the pavilions, and public areas.
Development of the expo site, which the government expects to require $6.8 billion of capital spending, is one of the biggest projects in Dubai's history and will help to open up a new district in the south of the wealthy emirate.
Officials say the spending will be funded through a combination of equity from the government and debt backed by other nations' export credit agencies.
HSBC has estimated overall expo-related spending, including private sector projects, may reach $18.3 billion. Authorities project the expo will attract 25 million visits during the six months it is open.
A huge exhibition centre will be built on the 438-hectare (1,082 acre) expo site, plus thousands of new hotel rooms and an extension to Dubai's metro line.
With the involvement of private companies, authorities aim to have 80 percent of the expo site in use after the event ends.

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Dubai's Union Properties set to revive $163m theme park project

30-01-17

Dubai-based Union Properties has finalised longstanding plans to build a $163.35 million (AED600 million) mixed-use project in Motor City, which includes a theme park, company chairman Khalid Bin Kalban told Arabian Business.
Initial plans by Union Properties for a $544.49m (AED2 billion) F1-X Dubai — a theme park dedicated to the Formula One car racing competition — were put on hold in the aftermath of the global financial crisis.
“The land was allotted to a theme park development, but a feasibility study said the cost would overrun to as much as $544.49m. We have now redesigned the land usage plan, with 50 percent of the land allotted to a theme park and the remaining 50 percent to a mixed-use development,” he said.
“The revised masterplan has been approved by Dubai Municipality, but is awaiting clearance from Dubailand, the master developer who was insisting on the theme park as it used to be. But that is not possible,” Bin Kalban said, adding, “We did ask them if they would come as a partner, but they were a bit hesitant. So, hopefully they will agree with our new concept.”
The Dubai Financial Market-listed developer also intends to relaunch the $81.67m (AED300 million) The Link Motor City project, which will have a retail component and a 3-star hotel, Bin Kalban said.
Though the original Motor City masterplan included seven hotels, Bin Kalban said the company has stripped back its ambitious hospitality development plans to developing only three hotels.
“We have changed our earlier plan, as no feasibility study approved it. We don’t want the risk of owning seven hotels in one neighbourhood. It does not make sense.
“We are executing the Motor City masterplan, but with slight changes because market dynamics have changed. It is the most prosperous community in Dubailand. We want to capitalise on it,” he said.

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Dubai Investments subsidiary plans to complete $817m Mirdif Hills by Q4 2018

30-01-17

Dubai Financial Market-listed Dubai Investments on Saturday said its real estate subsidiary will complete work on $817 million (AED3 billion) Mirdif Hills project by fourth quarter 2018.
Currently the only freehold project in Mirdif, the project spreads across 3.9 million square feet and includes 1,054 apartments, a four-star hotel and a 230-bed hospital.
Dubai Investments Real Estate Company (DIRC) will construct the project in two phases and offer payment plans wherein investors can pay up to 50 percent during the construction phase and the balance on completion.
“Dubai Investments feels the market is right for the launch of its Mirdif Hills project, which offers salient advantages of ideal location, unique attractions and amenities within a self-contained, community,” Khalid bin Kalban, managing director and chief executive officer, Dubai Investments and chairman of DIRC, said.
He added: “The UAE real estate market is characterised by strong fundamentals, making it the preferred investment destination in the Middle East and providing ample opportunities to drive added value. The launch of projects such as Mirdif Hills will not only rejuvenate the sector but also accentuate the strong growth potential on offer.”
The project has three clusters with Al Multaqa Avenue consisting of a 116-room hotel, 128 serviced apartments, restaurants, cafes, retail spaces and 300 residential units; Janayan Avenue comprises a mix of apartments, duplexes and vertical villas (many villas built in one single building) and Nasayem Avenue also consisting of apartments and duplexes.
On the commercial side, the project will have 52 retail outlets and shops, including a piazza, fine dining restaurants and cafes. It will also include a 230-bed hospital, offering multiple specialties and emergency services.
On Saturday, Kalban said the company plans to close a $299.52 million (AED1.1 billion) loan by December 31 with First Gulf Bank and Abu Dhabi Commercial Bank for construction of the project.

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Developers to award $3.7bn in Dubai retail construction contracts this year

16-01-17

Around $3.7 billion-worth of retail construction contracts are set to be handed out in Dubai this year, according a report.
Contracts will he awarded across four key projects, ranging from the $1 billion Dubai Creek Harbour and similarly-valued Mall of the World: Phase 1, to the US $900 million Deira Mall and US $763 million Dubai Hills Mall, according to the MEED (Middle East Economic Digest) Projects database.
By contrast, the value of similar contracts awarded last year was $502 million and $812 million in 2015.
The projected awards reflect an increase in development activity ahead of Dubai’s hosting of Expo 2020, but take place against a backdrop of weakness in some key visitor markets.
In the UK, the vote to leave the European Union has weakened the Pound, making the Dirham expensive for UK visitors. Russia continues to suffer from weak oil prices and sanctions linked to the Ukraine conflict.
“This is an ongoing trend from 2016, and all retailers and mall operators and developers need to review new target markets and how to incentivise local shoppers. This will have an impact on the feasibility of mall developments,” Matthew Dadd, partner and head of commercial at Knight Frank Middle East, told Gulf News.
In Abu Dhabi, contractors are pinning their hopes on two main projects following the apparent putting on hold of Al-Falah Mall and The District on Saadiyat Island, worth a combined US $439 million.
Reem Mall, valued at US $1 billion, is set to go ahead, with Al Futtaim Carillion having been named as the preferred main contractor. Beyond its lineup of well-known retail brands, the mall’s key attraction is the ‘world’s largest indoor snow-play park’.
Work on Al Maryah Central, valued at $409 million, is underway, with the main construction contract awarded to Brookfield Multiplex.

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