(MENAFN - Khaleej Times) Major infrastructure spending dubai?s expo 2020 and qatar?s 2022 fifa to drive sector growth
the future for the middle east’s retail industry looks very promising due to high consumer confidence major infrastructure spending in the lead-up to world expo 2020 in dubai and the 2022 fifa world cup in qatar according to an expert.
prakash “pk” menon executive director of dubai-based thought leaders middle east said the retail sector is presently a strong economic performer in the middle east and particularly the uae as leading global retailers are keen to expand into the region to cash in on the strong recovery on the economic and tourism fronts.
“i base this assessment on the back of rising gross domestic production and the approvals for several new mega infrastructure projects and government policies aimed at further reducing the region’s dependence on oil exports” he said.
menon is one of the world’s most influential retail experts and leadership authorities. an acclaimed speaker author trainer and mentor he is the founder and executive director of thought leaders middle east which operates throughout the middle east and internationally from its headquarters in dubai. he is also the author of three books — driven supply chain is sexy and fail smart.
“high consumer confidence major infrastructure spending in the lead up to expo 2020 and fifa 2022 and the fact that shopping is deeply embedded within the region’s culture are prompting a steady influx of top international brands to the region. the uae saudi arabia and qatar are said to top the list for global retailers looking to expand into the region especially those at the luxury end of the market” he said.
he said dubai in particular is considered a key retail tourism destination globally. people travel to the “desert city” from all corners of the globe either as a stopover or more and more frequently as their sole holiday destination he said.
“they come to experience the amazing infrastructure the airport the hotels the restaurants the entertainment zones and of course a shopping experience like no other. dubai and other parts of the uae and the middle east attract expats from all over the world who are lured to the gulf region for its vast employment and lifestyle opportunities. with many of them highly-fashion conscious and savvy consumers the fact that the brands and quality items they love are virtually on tap is a strong incentive for them to keep spending. naturally this is music to the ears of retailers in the region” he said.
“in short i believe the uae and the middle east are on track to achieve its goals with gdp rising at a time when global economic conditions remain unstable.”
to a question about the benefits of expo 2020 and fifa 2022 to the region’s retail sector he said both major international events will undoubtedly be massive growth accelerators for retail in the region.
growing growth market
“the two events will play a vital role in reaffirming the stature of the uae and qatar as extremely important global tourism destinations. the expo is expected to attract exhibitors from about 180 countries and around 25 million visitors while a million international football fans are expected to travel to qatar for fifa 2022” he explained.
menon said travel retail is undoubtedly a lucrative and growing market in the middle east with tourism numbers set to treble by 2030. and tourism naturally brings massive opportunity to the retail sector.
“remember people are attracted to the middle east and the uae not for the promise of beaches and outdoor pursuits but for the promise of a shopping dining and indoor entertainment experience like nowhere else in the world” he said.
regarding the challenges ahead for the industry he said talent acquisition talent retention and service excellene are the main challenges not only in the middle east but also on a global scale.
but the challenge is amplified in the region because of the anticipated influx of millions of people to the region in six years for expo 2020.
“with expo 2020 expected to generate around 275000 new jobs recruitment is emerging as one of the most crucial issues surrounding the event. to be prepared for the onslaught all retailers must address what has been targeted as the biggest threat and challenge for the retail sector — building a team of retail specialists with the necessary high standards of skill sets needed to meet the demand.”
“another key challenge is the fact that consumers today are better-researched and more savvy and demanding than ever before. this is especially the case in the middle east where people are coming in from all corners of the globe with a range of cultural service quality and cost expectations” he said.
to a question he said all growth and economic indicators are pointing to the fact that the uae’s entrepreneurs and ceos are ready for the retail boom. “the key now is to put strategic systems and processes in place to ensure the growth is sustainable over the long term. and my view is that the focal point must be on talent acquisition retention ongoing development and customer service excellence” he said.
“retail is as much a part of the culture and way of life in the middle east and the uae as it is about the purchase of goods. as a result the future for retail in the region looks very promising provided retail leaders play their cards right in terms of addressing the challenges of talent acquisition retention and meeting the demands of increasingly savvy consumers” he said.
us europe still volatile
about the major retail markets in europe and the us menon said the us economy has held up relatively well. on the retail front a positive economic outlook is pointing to modest growth. but it is highly unlikely that there will be a return to the rapid growth experienced during the previous decade.
as for europe after a very rough period for retailers due to the lengthy eurozone recession things are starting to look a little brighter. however it is still a volatile situation; much of the growth in the retail sector is due to the expansion of exports as opposed to stronger consumer spending.
“overall the outlook for retail is not great in europe with a disproportionate share of its current slow growth stemming from exports. they are going to have to consider means to stimulate local consumer demand and spending or risk returning to a state of recession” he said.
in comparison to the middle east and uae retail markets he said the european and us markets are saturated. “they obviously have their own challenges ahead of them including the increasing emergence of new retail channels particularly online purchasing and social media channels which is a challenge we face here in the region also.”
“but according to studies unlike european and us markets internet retailing is expected to account for only a small portion of sales in the gcc at least for the next four years. the fact that retailing is seen as a leisure activity for both locals and tourists in the region makes it very difficult for online retailers to penetrate the market” he said.
to realise retail’s true potential he said all retailers must address what has been targeted as the biggest threat and challenge for the sector — building a team of retail specialists with the necessary high standards of skill sets needed to meet consumer demand.
“the real competitive advantage will be the result of winning the ‘war for talent’ at all levels. every link in the chain from directors and senior managers to shop floor assistants and warehouse staff has a vital role to play in the big picture” menon concluded.