Dubai: More than 6,000 retail outlets have signed up to participate in the Dubai Shopping Festival 2010 and many more are expected to apply to the Dubai Events and Promotions Establishment.
On January 28, the 15th Dubai Shopping Festival will officially kick off, providing Dubai with another exciting opportunity to boost the performance of its retail industry. DSF 2010 will run until February 28.
Retail is one of the fastest-growing industries in the UAE and it is expected to achieve a compound annual growth rate of over 12 per cent in 2009-2013.
Factors like improving household consumption and a growing service industry are expected to help drive the future growth of the sector.
The arrival of modern shopping malls, state-of-the-art hypermarkets and shopping events such as the Dubai Shopping Festival and Dubai Summer Surprises also make the country a lucrative destination for the retail industry, according to Booming Retail Sector in UAE, a market research report by RNCOS.
Even without special promotions, residents and tourists continued to stream to the malls nationwide.
For example, on a normal day between 70,000 and 80,000 people visit the Mall of the Emirates, and this goes up to between 100,000 and 110,000 people a day on weekends, according to estimates. The secret behind the success of the malls in getting people to visit and spend their money, even during difficult economic times, is exciting attractions and strong marketing.
Several of the most successful malls in the UAE are located in Dubai. Colin Beaton, managing director of Limelight Creative Services, said in an interview: "Dubai has been positioned as a retail destination [through] extensive global marketing and brand-building programmes surrounding local shopping events.
No duties
"[This] is supported by a strong value proposition [like no duties and taxes]. ...Dubai offers consumers a remarkable breadth of local and international brands located in compelling retail environments."
Samira Yousuf, a university student, spends most of her free time shopping. "I love the malls here. The shops have all the new clothes and they are always in style."
The variety of options a shopper has in the malls, such as cinemas, a supermarket and restaurants, make Yousuf feel like it is an all-in-one package.
"I do not need to go to different places to do all my chores," she added.
Surma Sarkar, another shopaholic, admires the UAE mall design and architecture and feels that they are lively, especially during shopping festivals and religious events.
Sarkar, an Indian national residing in Abu Dhabi, said that the malls "always have a fun vibe to them which makes me happy every time I enter".
Attractions such as indoor rain and the skiing area in Abu Dhabi Marina Mall are what Sarkar thinks make malls in the UAE unique.
What Lionel Gonzaga, a web designer, finds interesting about malls here is the healthy competition they generate.
"It is good because they always strive to provide a better service, design and facilities."
Gonzaga, a Filipino national residing in Sharjah, loves the kiosks scattered around the malls, as it gives the malls a market feel.
Gonzaga also uses the wireless internet that most malls provide. Whenever my internet stops working, I go to the nearby mall and use the Wi-Fi service on my laptop, he said.
To keep the retail industry growing, developers are constantly working on bigger and more complex shopping malls.
Growth in demand
A study by Colliers International indicated that the number of new malls expected to open in the UAE is well in line with the growth in demand.
The study revealed that over 70 per cent of shopping malls that were expected to open between 2008 and 2010 are already pre-let, suggesting that retailers remain bullish on the coming years. The challenge is to convert visits into sales.
"Certainly, 2009 and early 2010 will be a stress test for a lot of retailers: this will differentiate the great ones from not so great ones. I believe the competitive landscape will change like never before," said Piyush Mathur, Managing Director, AC Nielsen, MENAP Region during a phone interview.
In the meantime, according to Eisa Adam Ebrahim, general manager of BurJuman, it pays for retailers to get creative and work together.
He suggested improving the price range, constantly updating products and focusing on key strengths of the local retail industry, which includes a traditionally strong market base among tourists.
According to the Colliers International study, the tourism market accounts for 21 per cent of Dubai's retail spending, increasing to over 40 per cent in the new destination shopping malls. Accordingly, smaller, older malls may need to reposition themselves to appeal to niche markets.
