With a number of world-class malls and an abundance of mixed-use retail developments and destinations, the country continues to dominate several international retail hotspot rankings and attract a growing number of visitors to its shores. A growing population and appetite for unique experiences among both local residents and international visitors have ensured that the country's retail sector witnessed a very favourable 2018, with the growth momentum being carried into 2019.
Experts also say that the upcoming Expo 2020 event will drive the demand for more retail space as Dubai gets ready to welcome a record number of visitors. Retail sales across Kuwait, Oman, Saudi Arabia and the UAE are projected to increase by more than $24 billion over the next five years, with the UAE expected to lead this trend with an estimated growth rate of 16 per cent, according to research from Euromonitor International.
The research indicates that the UAE retail industry is currently worth $55 billion and is forecast to steadily rise to $63.8 billion by 2023. Store-based retailing will continue to dominate, accounting for $52.7 billion of the overall market in the UAE. However, non-store retailing, which includes online shopping, direct selling, mobile Internet, social media and home shopping, will grow by 78 per cent from 2018 to 2023.
Fahad Kazim, VP of Meydan Malls, said the long-term outlook of the UAE retail sector remains strong and is expected to see a steady growth through to 2023. "A strong contributor to the growth of the sector is proactive initiatives taken by the government in streamlining the retail infrastructure and strengthening the investments and tourism landscape of the region."
"The traditional retail environment in the region is evolving and as it continues to grow, it is gradually moving towards a phy-gital experience. The e-commerce market, which is gaining momentum, will be a huge contributor to the growth of the retail sector in the coming years. Keeping up with this trend, the brick-and-mortar retailers are expected to gradually adopt the omni-channel business model to establish an intuitive and smart communication with consumers across online and offline platforms," Kazim added.
Ahmed Al Khaja, CEO of the Dubai Festivals & Retail Establishment (DFRE), said the retail industry is going through a "huge transformation."
"There are a few elements that are shaping the future of retail," he said. "The first has to do with various technologies available today for both retailers and consumers. The second has to do with globalisation and how the world for retail is becoming a very small place; buyers that were used to having access to a single market can today have access to hundreds of markets, thanks to the Internet. Lastly, there is the fact that Dubai has branded itself internationally as a hub for small and medium-sized enterprises; there should be an increasing number of incentives to encourage them, since they are a key driver of growth in the industry."
Al Khaja noted that Dubai is one of the most attractive markets for retail in the world, because it is always ahead of the game in terms of offerings. "We are fortunate to have such good partnerships with retailers, and this has translated to a number of accolades over the years. Dubai is considered to be the best city in the world to buy gold. It is also known as the city which hosts numerous shopping festivals that attract people from all around the world."
Dubai's retail market is projected to grow 5.6 per cent between 2018 and 2021, with retail sales reaching Dh160.7 billion by 2021, a study by Dubai Chamber of Commerce and Industry showed. The city accounted for around 49 per cent of all shopping malls in the UAE, followed by Abu Dhabi with 36 per cent.
"Today, when we look at tourism, we know the target is to attract 20 million visitors by 2020, and we are very much on track to achieve this target. But, we also have to look at what we should be doing beyond Expo 2020. The challenge will be to sustain the growth and keep on creating new offerings and experiences for visitors to the region," Al Khaja said.
Mohammed Feras, director of retail registration and strategic alliances at DFRE, said that looking ahead, the anticipation will revolve around the industry getting itself ready for Expo 2020.
"The amount of retail spaces in the UAE is going to increase to meet demand for the event. It is not just the number, but also the type of retail spaces that will be the focus in the next few years. Retail spaces today are very unique and new concepts are being created to cater to consumer demand. This is best demonstrated at destinations such as La Mer and Al Seef, which mix shopping with F&B, experiences, culture and history."
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