Business | Economy
Mideast franchise industry touches $14b
The franchise industry responsible for bringing the world's top brands to the Middle East is said to have touched $14 billion and is growing at 27 per cent per year.
- By Robert Ditcham, Staff Reporter
- Published: 00:00 March 31, 2007
Dubai: The franchise industry responsible for bringing the world's top brands to the Middle East is said to have touched $14 billion and is growing at 27 per cent per year.
The massive growth in the industry is reflected in the entrance over the last 12 months of some of the biggest names in retail, including last week's new arrival, French fashion retailer Galeries Lafayette.
Two of the most notable new brands are Swedish fashion retailer H&M and British pharmacy chain Boots. According to Simon Thompson, owner of UK-based retail consultancy, Retail International, Kuwait's M.H.Alshaya Co. scored a "coup" by securing the rights to each company.
"Both brands have a history of being reluctant franchisors," said Thompson.
Other recent arrivals include US book and music retailer Borders and US fashion chain Nautica.
The $100 million retail industry in the Middle East is developing at a frenetic pace, providing constant pressure on franchisors to bring more top brands into newly-opened malls, say retail analysts.
And with more than 15 million square feet of leasable retail set to hit the Dubai market alone in the next two years, new primary brands are easily absorbed.
According to Abdul Rehman Falaknaz, president, International Expo Consults, organisers of the recent Franchise Middle East (FME) exhibition, Dubai is leading the way in the region's franchise sector.
"Dubai is clearly emerging as the regional hub of the franchising industry and is setting the momentum for the region as a whole," he said.
"Improved intellectual property legislation and property ownership rights to foreigners coupled with world class infrastructure, tax free facilities and access to emerging high growth markets like India, North Africa, CIS and Levant make Dubai ideal for franchising opportunities."
The franchising industry is currently dominated by a limited number of big players. Companies including Al Tayer group, Al Futtaim Group and M.H.Alshaya Co. are responsible for the majority of international food, automotive, electronics and fashion brands sold in the UAE.
One of the main objectives of the FME conference was to promote investment opportunities for small and medium enterprises (SMEs). The conference was launched by the Mohammed Bin Rashid Establishment for Young Business Leaders.
"As economies of the GCC countries enter a new phase of development, the emphasis on SMEs opens new vistas for the franchising business," said Abdul Baset Al Janahi, CEO, Mohammed Bin Rashid Establishment for Young Business Leaders.
"SME's are a significant source of new business leads and have a progressive and crucial role to play in stimulating local and regional development,"
"Young local entrepreneurs can immensely benefit from the tremendous opportunities offered by the global franchising sector that is worth Dh3.67 trillion."
Business Editor's choice
-
Do unemployment figures flatter to deceive?
Jobseekers and recruiters give out mixed signals ranging from optimism to downright despair even as official data show recovery
-
Banks can increase their share
Longer opening hours, more locations outside cities and lower charges can help
-
Geepas idea blossomed in Dubai
The journey led from a small shop in Bahrain to a $1.27b company in the UAE
