In the long run the global formula for online retail success might be notably different from the one that will prevail in the GCC countries – and especially in the UAE.
The growth of e-commerce is not likely to challenge shopping malls in the UAE, but rather complement it, which may be beneficial for consumers and retail operators in the long run.
This is because here in the UAE, the rise of shopping malls and outdoor retail destinations still draws in consumers to visit the brick-and-mortar shopping centres to make retail purchases – across fashion apparel, jewellery and electronics, even though globally many traditional consumer businesses are moving away from models that are geographically focused to ones that are customer-centric and borderless.
In January, a KPMG report said that UAE consumers shop less frequently online than the global average, suggesting further room for growth and adoption in the online space. However, even though UAE shoppers browsed online for less time, they were quick to spend: their average ticket size of US$332 was the highest in the world.
Globally there are expectations for more online retail growth from categories that have been traditionally popular in the brick-and-mortar format – including mobile phones and laptops, as well as furniture and home decor. In the UAE, the growth so far has been mainly in mobile phones.
One emerging segment for online retail, globally and in the region, is groceries. This segment is growing. A number of grocery retailers in the UAE, such as Carrefour and Geant, have experimented with this model and have been quite successful. Globally, the early winners in this segment have focused on Millennials and young professionals, where the attention on prepared fresh meals has been a growth driver.
In the UAE, online shopping may never replace shopping malls since malls are an intrinsic part of life in the region, especially in the UAE.
Malls have evolved into entertainment destinations where people spend time with family while they shop, dine and use entertainment facilities, and they are not likely to be replaced so easily.
As malls continue to evolve in the F&B space too – from food courts to fine dining – brick-and-mortar retail can significantly grow in the UAE. Shopping malls in the region are also continuing to evolve.
For instance, in Saudi Arabia malls are increasingly focusing on entertainment options and are especially looking forward to the approval for cinemas coming through at the earliest. We expect that innovation and new entertainment ideas in this space will be led by big players.
There could be certain categories where e-commerce will dominate, such as electronics and certain apparel, but as physical stores also offer competitive prices they continue to attract a growing number of consumers. Furthermore, retail events such as the Dubai Shopping Festival – which provide incentives for visiting retail outlets and making physical purchases – continue to drive the popularity of this format.
It is in the interest of mall developers to collaborate with individual retailers and shop owners to attract more visitors to the malls as revenue models are shared – rental income also depends to a large extent on the sales.
This push ultimately may result in consumer benefit in terms of better deals for products and services sold in stores.
This creates pressure on online retailers in terms of price points they are looking to sell. At the end of the day, they have to be profitable. Globally, only a few e-commerce businesses are profitable.
In the UAE, there is still healthy competition between the two formats – and this is only going to grow considering the recent developments in the e-commerce space including the announcement of Noon.com and potential outside investments in Souq.com.
Farhan Syed is a partner at KPMG, Lower Gulf.
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A MINECRAFT MOVIE
Director: Jared Hess
Starring: Jack Black, Jennifer Coolidge, Jason Momoa
Rating: 3/5
Most F1 world titles
7 — Michael Schumacher (1994, ’95, 2000, ’01 ’02, ’03, ’04)
7 — Lewis Hamilton (2008, ’14,’15, ’17, ’18, ’19, ’20)
5 — Juan Manuel Fangio (1951, ’54, ’55, ’56, ’57)
4 — Alain Prost (1985, ’86, ’89, ’93)
4 — Sebastian Vettel (2010, ’11, ’12, ’13)
COMPANY%20PROFILE
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Retail gloom
Online grocer Ocado revealed retail sales fell 5.7 per cen in its first quarter as customers switched back to pre-pandemic shopping patterns.
It was a tough comparison from a year earlier, when the UK was in lockdown, but on a two-year basis its retail division, a joint venture with Marks&Spencer, rose 31.7 per cent over the quarter.
The group added that a 15 per cent drop in customer basket size offset an 11.6. per cent rise in the number of customer transactions.
Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
The rules on fostering in the UAE
A foster couple or family must:
- be Muslim, Emirati and be residing in the UAE
- not be younger than 25 years old
- not have been convicted of offences or crimes involving moral turpitude
- be free of infectious diseases or psychological and mental disorders
- have the ability to support its members and the foster child financially
- undertake to treat and raise the child in a proper manner and take care of his or her health and well-being
- A single, divorced or widowed Muslim Emirati female, residing in the UAE may apply to foster a child if she is at least 30 years old and able to support the child financially
Champion%20v%20Champion%20(PFL%20v%20Bellator)
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UAE currency: the story behind the money in your pockets
'HIJRAH%3A%20IN%20THE%20FOOTSTEPS%20OF%20THE%20PROPHET'
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Match info
Manchester United 1 (Van de Beek 80') Crystal Palace 3 (Townsend 7', Zaha pen 74' & 85')
Man of the match Wilfried Zaha (Crystal Palace)
if you go
The flights
Etihad, Emirates and Singapore Airlines fly direct from the UAE to Singapore from Dh2,265 return including taxes. The flight takes about 7 hours.
The hotel
Rooms at the M Social Singapore cost from SG $179 (Dh488) per night including taxes.
The tour
Makan Makan Walking group tours costs from SG $90 (Dh245) per person for about three hours. Tailor-made tours can be arranged. For details go to www.woknstroll.com.sg
Zayed Sustainability Prize
Emiratisation at work
Emiratisation was introduced in the UAE more than 10 years ago
It aims to boost the number of citizens in the workforce particularly in the private sector.
Growing the number of Emiratis in the workplace will help the UAE reduce dependence on overseas workers
The Cabinet in December last year, approved a national fund for Emirati jobseekers and guaranteed citizens working in the private sector a comparable pension
President Sheikh Khalifa has described Emiratisation as “a true measure for success”.
During the UAE’s 48th National Day, Sheikh Khalifa named education, entrepreneurship, Emiratisation and space travel among cornerstones of national development
More than 80 per cent of Emiratis work in the federal or local government as per 2017 statistics
The Emiratisation programme includes the creation of 20,000 new jobs for UAE citizens
UAE citizens will be given priority in managerial positions in the government sphere
The purpose is to raise the contribution of UAE nationals in the job market and create a diverse workforce of citizens
The specs
Engine: 1.5-litre turbo
Power: 181hp
Torque: 230Nm
Transmission: 6-speed automatic
Starting price: Dh79,000
On sale: Now
Specs
Engine: Dual-motor all-wheel-drive electric
Range: Up to 610km
Power: 905hp
Torque: 985Nm
Price: From Dh439,000
Available: Now
'Nope'
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Ms Yang's top tips for parents new to the UAE
- Join parent networks
- Look beyond school fees
- Keep an open mind
NO OTHER LAND
Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
Rating: 3.5/5
Company%20profile
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ABU DHABI ORDER OF PLAY
Starting at 10am:
Daria Kasatkina v Qiang Wang
Veronika Kudermetova v Annet Kontaveit (10)
Maria Sakkari (9) v Anastasia Potapova
Anastasia Pavlyuchenkova v Ons Jabeur (15)
Donna Vekic (16) v Bernarda Pera
Ekaterina Alexandrova v Zarina Diyas
How to protect yourself when air quality drops
Install an air filter in your home.
Close your windows and turn on the AC.
Shower or bath after being outside.
Wear a face mask.
Stay indoors when conditions are particularly poor.
If driving, turn your engine off when stationary.
Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
The specs: 2018 Alfa Romeo Stelvio
Price, base: Dh198,300
Engine: 2.0L in-line four-cylinder
Transmission: Eight-speed automatic
Power: 280hp @ 5,250rpm
Torque: 400Nm @ 2,250rpm
Fuel economy, combined: 7L / 100km
