Online shopping? Let's talk at the mall

Dubai - UAE gets a strong fix of retail therapy

Get ready to shop more from now as the UAE gears up to inaugurate more malls despite the growing popularity of online shopping. Global brands are buying additional retail space given the current affordable prices in malls. This trend is evident despite a spurt in online shopping.
Currently, the UAE has 197 shopping centres, according to David Macadam, chief executive of the Midde East Council of Shopping Centres (MECSC). The latest MECSC directory launched recently discloses that more than 35 to 40 malls are expected to open doors in the UAE from now till 2020 including up to 21 in Dubai alone.
A recent JLL report stated that the total gross leasable area in the UAE retail industry is approximately 71 million square feet, with an estimated additional 10 per cent more space coming to the market in 2018 to total approximately 78 million square feet.
Macadam said the UAE's retail sector contributes approximately 11 per cent of the country's gross domestic product (GDP). In Dubai, retail sector even played major role by contributing 29 per cent to the emirate's GDP. Retail industry growth is expected to be two to three per cent in 2017, which will see retail turnover in the UAE reaching $70 billion by 2021.
"We have seen that the strongest retailers are taking advantage of the current market conditions to expand their footprint, increase the scale of their business and to source the best retail locations at very efficient lease terms," Macadam said.
Dubai enjoys several advantages that will drive growth in the retail sector going forward, such as the constant influx of tourists, rising incomes and its ability to attract retailers from around the world, according to a recent statement by Hamad Buamim, president and CEO of the Dubai Chamber of Commerce and Industry.
Recently, Concept Brands Group, which held its Concept Big Brands Carnival in Dubai, endorsed the bullish trend in retail, be it in malls or online shopping targeting millennials.
"International brands are increasing their footprint in the UAE and the region and are always on the lookout for strategic locations and partners. International brands keep enhancing their image through trends that resonate with their clientele. For example, they are active on social media, they partner with influencers and top models, they take part in international fashion platforms and conduct innovative fashion shows," said Vijay Samyani, founder and managing director of Concept Brands Group.
"They also partner with regional influencers which connect directly with their audiences. E-commerce is a big trend in the UAE which majority of brands are embracing, especially the ones who target millennials, but there are niche brands who still prefer a personal approach with customers," he added.

Amit Raj, general manager of BPG Maxus, said that the overall outlook for the retail industry in 2017 is optimistic and expected to grow at a compound aggregate growth rate of five per cent. Expo 2020 is going to drive investment into infrastructure. This will open up job opportunities and a spurt in the middle-income population. The UAE's investment of $18 billion moving towards Expo 2020 will be a major boost to liquidity in the system.
"The UAE is fast evolving into an entertainment destination. In this change, malls will need to redefine strategy from shopping destinations into entertainment spaces as they are competing along with Global Village and Dubai Parks and Resorts. Shopping will be a by-product. Mall of the Emirates is increasing space in its theatre and F&B areas... Malls will continue to gain footfall, especially during the long summer. The challenge will be when the weather is good and people have more options to engage in," added Raj.
- sandhya@khaleejtimes.com