5/4/2012

Tamimi Consultancy FZC

Dubai Mall. with Abu Dhabhi. Saudi Arabia. Lebanon. and Jedah each having between 750.6 million square metres of Gross Leasable Area (GLA) currently under construction. and Mall of Arabia will add some 1.  5/4/2012 Tamimi Consultancy FZC . including about 500. Riyadh. Dubai Festival City.000 high-income professionals.3 million square meters of retail floor space is already available and the retail sector is estimated to be worth $US 100 billion annually. Iran and Iraq. This is set to double in few short years with an additional 4. It produces 16 million barrels per day (bpd) of oil and exports 13 million bpd generating about US$ 250 billion in annual revenue. in Kuwait with the Mall of Kuwait. Currently the four main drivers behind this retail phenomenon are the cities of Dubai. and Jedah. the pan-Middle East retail market is projected to top US$ 100 billion. 5. With a combined Gross Domestic Product (GDP) expected to reach US$ 600 billion (in 2006) and a population of 34 million people. Egypt. Dubai remains at the core of this development.000 and 800.Retail Market  Adding in Jordan. and the new Bahrain City Center project in Manama.000 square meters. Riyadh. Syria. Abu Dhabhi.000 square meters will be added through developments in Doha at Le Villaggio and The Pearl-Qatar.  In a recent survey report by retail international. hosting 1. Al Shobily Grand Mall in Khobar.2 million square meters alone. the GCC is the world's 17th largest economy.3 million square meters. Elsewhere in the region another 750.

Secondly.Retail Market  The justification behind this extraordinary acceleration in retail development is twofold. Therefore. the world tourism organization estimates that the number of tourists visiting the region will grow to 68 million by 2020. Riyadh’s population alone will treble to over 15 million inhabitants. Again. Firstly. the population throughout the GCC countries is estimated to be 36 million.  5/4/2012 Tamimi Consultancy FZC . which will climb to 15 million tourists by 2010. Dubai has taken lead with 5 million visitors in 2005. the regions population should increase to over 50 million (up 40%) by 2015. with the average annual projected population growth set at 3% (world development indicators 2005).

Shopping is undoubtedly one of the city’s greatest draw cards. they had only good shops. Throughout its 20-year history. It is largely divided into two main types—the old souks in Deira and Dubai Souk in Bur Dubai. The airport is also a shopping paradise. with excellent duty-free facilities. Launched in 1981. What will be the world’s largest shopping mall. Dubai is regarded as the “Shopping Capital of the Middle East” and increasingly dedicated consumers regard the emirate as a top-class shopping destination. After the Dubai City Centre created history. and a children’s play area. along came another red letter day in the history of Dubai’s retail front: the opening of Deira City Centre under the banners of Majid Al Futtaim Group.000 outlets. is slated to open in 2007 with over 1. it has played an integral role in providing for the shopping needs of the local population as well as for the thousands of visitors to Dubai who flock through its doors every year. Sahara Mall did not have any hypermarkets. next was Sahara Mall in Sharjah. Al Ghurair was the first shopping mall in the Middle East and now one of the top five destinations visited by tourists in Dubai.Evolution  With good reason. and Al-Hiyafa Road. a major food court. Sahara Mall relied on the fact that children decide the buying behavior of the parents Tamimi Consultancy FZC   5/4/2012 . and the glossy new shopping malls around Beniyas Square. The Dubai Mall. While the region was basking in the sunshine of this one-stop shopping destination. Combining the culture and tradition of the city of Dubai with a modern shopping experience. New shops and malls seem to pop up every other month. Al Ghurair City has acted as a pioneer in the regional retail business. which again changed the scenario of retail in the UAE. to cater to the seemingly insatiable desire for retail therapy. The beginning of this world class shopping destination is marked by the opening of Al Ghurair City. Al-Rigga.

Mega malls and high-end malls started targeting high-end consumers. Major changes in Dubai Retail happened with the arrival of the Mall of Emirates. which caters to high-end users. a lot of shopping malls started mushrooming all over the UAE. and they offered the unique option of skiing. which came up with the concept of the specialized mall. Things changed with the arrival of Ibn Battuta. that were in the league of the Deira City Center. Burjuman and Wafi City Mall are examples also.Evolution After the Deira City Center and Sahara Mall. 5/4/2012 Tamimi Consultancy FZC .

Without any hypermarketing attributes.  5/4/2012 Tamimi Consultancy FZC . as it was a new concept for the UAE people and has since become an enduring trend the hypermarket started. These types of malls have evolved with time and major changes have been made in the name of progress. and they are not only presently successful but in the future they might surpass it.Innovation & Uniqueness  Deira City Center kick started the concept of Carrefour. Examples of criterion for creating those niches are as follows: Malls not only provide a rich shopping experience but a mode of relaxation: 
Sahara Mall has created an image of “a family destination” with a magnificent area dedicated to children. it has been doing quite well. Dubai followed in the footprints of Singapore. Malls are being built regularly and have been striving to create a niche for themselves.

and people who come to Dubai from all over the globe make a point to visit it.
 New malls like Marina and Dubai Mall are creating more experience-based shopping.” which is based on the travels of the great explorer. It helps in attracting high levels of consumers to the mall.” and subsequently. 
 Mall of the Emirates has a ski slope. Ibn Battuta.    5/4/2012 Tamimi Consultancy FZC . in coming years its malls are going to focus on being major tourist attractions.Innovation & Uniqueness Theme Based Malls:  Started with the opening of “Ibn Battuta. Dubai mall is offering the concept of Jurassic Park and Space travel that will enrich the shopping experience for visitors. which transformed it into a landmark for Dubai. They have created a unique experience in the mall. 
 Dubai is labeled as the “Favorite tourist destination.

This is becoming very true with the other malls also. the goals they set for 2010 were achieved in 2005. As one industry insider explains. and The World. With this pace they are sure to achieve much before the targeted schedule. the hotel and mall together concept has made them major players. people who visit will also want to experience all the malls. Considering that increasing numbers of tourists are arriving. As initiated by DCC. the future is bright for at least the next 4-5 years. All retailers actively participate in the bonanza. Others are following that trend: MOE has Kempinski with them and Ibn Battuta is planning to build a five star hotel.  5/4/2012 Tamimi Consultancy FZC . Both of these events are held to attract travelers. Mega projects like the Palm Jumeriah. In both the cases Dubai has been showcased so well that people all over the world come to Dubai. the DSF and DSS. will augment the shopping experience and increase the GLA of retail space in UAE.Dubai being projected as a business hub  As Dubai is also becoming a major player in international conventions. and they have a new vision for 2015. Dubai is growing at a very rapid pace and the policy makers of Dubai have been progressive with reforms. “Initially. Palm Deira. According to the last strategic plan. whoever visited Dubai would like to visit DCC for shopping”. and great deals are available in all the possible retail outlets. Dubai claims that “it is larger than life” and they are succeeding with that vision.  Shopping Festivals
Dubai has two festivals in a year.

" he said. In its annual survey.    5/4/2012 Tamimi Consultancy FZC . which makes it possible for retailers to enter the market with local knowledge and minimal investment. real estate analysts CB Richard Ellis mapped the global footprint of 323 of the world's leading retailers across 73 countries and found that 56% of brands are present in Dubai. said the reason that Dubai has been able to grow rapidly as a retail hub is because of its franchise model. The recession also prompted more retailers to enter Dubai as they were forced to focus more on emerging markets and locations where consumer spending is still relatively high. he noted.Dubai now on par with London as global shopping capital  Dubai's rapid rise as a leading retail destination has reached new heights following the release of a new survey which shows that the emirate now shares the top spot with London as the most popular retail city in the world. "So it's quite a low risk play for retailers with very high returns. matching London at the top of the list. a retail analyst at CB Richard Ellis. Michael Leighton. Dubai's location and its focus on building world-class malls have also been driving forces in the emirate's evolution as a leading retail presence.

" he noted. compared to just 6% in the States. Among the US retailers that have entered Dubai over the past year were Crate & Barrel. While acknowledging that Dubai may have reached a limit in terms of its capacity for new mega malls. Pottery Barn. Leighton said it has taken a while for US retailers to get comfortable with the way of doing business in Dubai. Noting that 98% of operations in the UAE are franchised. all were from the US. So it's been an education process to get them comfortable. and be in complete control.   5/4/2012 Tamimi Consultancy FZC . in your own country. "The mentality of US retailers has always been to operate your own business. where retailers were particularly hard hit by the recession.US Retailers top incoming brands  Of the six brands that entered Dubai last year. Leighton says there is still an opportunity for new brands to be added as malls try to stay ahead of the competition. and Cheesecake Factory.

just behind the UK. as Abu Dhabi emerges as a major retailing destination in its own right. so you see a lot of them refreshing their tenant mix in an effort to keep their products ahead of the market. and brands are becoming much more interested in coming to the region.UAE second biggest retail market  "Yes. it's about asset management and repositioning their malls. Dubai has probably reached a saturation point in terms of grade A shopping malls. the survey noted." he said. the UAE is the secondbiggest retail market in the world. Franchise operators are still very hungry to take on new brands. they have looked at their portfolio and their units and in some cases pulled out their lesser trading stores. but growth happens in different ways. it is very possible that the UAE could overtake the UK. So it is more of a consolidation exercise rather than expansion from a retailer's perspective. And Dubai is benefitting mostly because it is the first port of call and the hub for expansion across the region. However.    5/4/2012 Tamimi Consultancy FZC . "I don't see why the UAE couldn't pass the UK in the coming years. Thanks mainly to the tremendous growth of Dubai's retail sector." he said. For landlords. So rather than just expanding.

Other than retail. as we have discussed in-depth above. much like Singapore. Dubai has been able to differentiate itself. and hopes to surpass everyone’s expectations.Conclusion  Dubai has achieved a Singapore-type success with great efficiency. Dubai is also bringing in other major events happening. Dubai is sponsoring festivals like Dubai Shopping Festival and Dubai Summer Sale in the same way Singapore has the Singapore Summer Sale and Uniquely Singapore. Singapore also targets major conventions and exhibitions. On the other hand. like Singapore. For example. As achieved in Dubai.    5/4/2012 Tamimi Consultancy FZC . So it is quite clear that Dubai’s goals replicated Singapore’s model. Dubai also replicated the model of offering the best shopping malls with best brands available. Global Logistics is also very efficient considering that Dubai is a port city. With the space and money available Dubai is creating a “larger than life” experience.

The emirate has earned this position due to the unconditional support of its leaders and the hard work of the business community" Binhendi said.LONG TERM SUCCESS  What Dubai should do to sustain success
Dubai has a 96% population of expatriates. Milan. so retail efforts should cater to them. Paris. Tokyo and Shanghai. and represents the second largest retail market globally. Hong Kong. The Emirate already hosts many international retailers and designers. due to geographic positioning and favourable domestic demand for luxury goods. the retail sector has emerged as one of the most important economic sectors associated with the growth of modern Dubai. The government policy is to make sure that the tourist inflow is maintained. Singapore. The key factors behind the optimistic forecast are attributed to the strong underlying economic growth. "Dubai's retail sector is likely to grow by 5.     5/4/2012 Tamimi Consultancy FZC . increasing household consumption and the inflows of tourists to the emirate. Dubai is poised to become a global fashion hub. it will become one of the most visited cities in the world. With its steady rise.” Dubai Chamber Director-General Hamad Buamim "Dubai is among the nine main shopping destinations of the world including New York. But for at least the next seven years they need not to worry as there is enough demand and to sustain success. London.5 per cent in 2011. Then.

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