Dubai: Faisal Vahedna invested a few thousand dirhams to start his electronics retail business, Vahedna Trading, in Deira in 1996.
Prior to that, he worked for 12 years in his uncle’s shop, Ashrafi Electronics, where he learned the tricks of the trade.
It was in the middle of an unprecedented retail boom in Dubai, caused by the growing demand for electronics and household appliances in Russia, the Central Asian and East European countries — that have been liberated from socialist regimes and have moved to a free economy, something which triggered the demand. Due to easy accessibility, Dubai benefited most. As a result, electronics thrived in the city.
Vahedna Trading is in Sabkha, Deira – the meeting place between Dubai’s wholesale and retail businesses. On one side of Sabkha lies Murshid Bazaar – the wholesale market, close to the Dubai Creek where wooden dhows load a large number of electronics and household goods destined for a number of countries including Iran, India, Pakistan and African coastal markets.
Sabkha, Dubai’s centre for trade, wholesale and retail activities, also remains crowded in the evenings – as a meeting place for traders and customers. It is always abuzz with shoppers. It was an ideal location for Vahedna to expand his business. However, his wholesale and re-export business picked up faster than retail operations.
It was no coincidence that the same year the Dubai Government also launched the annual Dubai Shopping Festival (DSF) to boost the emirate’s retail, trade and tourism sectors.
From a small shop Vahedna Trading today has grown into a Dh1 billion turnover company that deals in electronics, household and information technology items, thanks to DSF, among other factors.
“Many people think that the DSF attracts just tourists and shoppers. During the last 17 years, my company has attracted so many traders, who later came back to place large-scale orders,” Vahedna tells Gulf News. “After their first visit, most of them usually start trading with us.”
His retail business also thrived due to the high influx of tourists and shoppers. He says, this way, Dubai has managed to divert many traders from other major hubs – such as Singapore and Hong Kong to the emirate.
“All of them are here for the DSF,” Vahedna says.
Millions of visitors spend billions of dollars during the DSF every year to help boost the economy of Dubai and the UAE, especially the retail, tourism, airlines, transport, restaurants and entertainment sectors that thrive on higher sale throughout its duration.
More than 50 million visitors spent a total of Dh117 billion during the DSF so far, a spokesperson of Dubai Events and Promotions Establishment (DEPE), organisers of DSF, told Gulf News. This translates to a per capita spending of Dh2,340 ($638) per visitor to the DSF.
The DSF was also part of the government’s strategy to diversify its economy and reduce dependency on hydrocarbon to make it more sustainable once oil runs out. Since its inception, it has been paying off the emirate rich dividends year after year.
Most retailers make provisions for larger inventories for DSF. “We usually witness a 25 per cent increase in sales of electronics, household and IT products,” Salim M.A., Director of Lulu Hypermarkets, in Dubai, tells Gulf News. “We start building inventories for the DSF two months prior to the festival to ensure the smooth supply of the goods.”
Every year, the Dubai Government ropes in key private sector entities in a sponsorship programme to part-finance the DSF budget that are spent in advertisement, marketing and promotion of the event at a grand scale to help attract tourists and shoppers.
The success and the return on investment are so high that the same business houses, conglomerates and corporations come back every year to support the government in organising the DSF. This is perhaps the best example of how public-private partnerships could boost a local economy.
“This remarkable journey of success was planned by Dubai’s leadership decades ago, for their farsighted vision and their determination to achieve the set plans has seen the city through challenging times,” Shaikh Ahmad Bin Saeed Al Maktoum, President of Dubai Civil Aviation and Chairman and CEO of Emirates airline and Group, said in a statement issued last month.
When one thinks of Dubai, the image one portrays of the city is that of a hub for trade, tourism, retail and financial services. Others consider Dubai – the city of superlatives – as a collection of some tall towers. Very rarely does one realise that Dubai is also a place abuzz with events throughout the year.
It is the events sector that makes things happen in this city of two million people and attracts more than 10 million tourists annually – be it for business deals, exhibition, conferences, corporate meetings or sports. These activities bring people closer and bridges cultures in the true to the spirit of the DSF slogan, “One World, One Family, One Festival”.
“Foreign visitors during this festival have increased from 1.6 million in 1996 (since inception) to 4.3 million in 2012, a 168.7 per cent increase over 17 years which indicates the success of this event year on year,” Bharath M, analyst at Frost and Sullivan, told Gulf News. According to a research by YouGov, overall consumer spending during DSF has a significant impact on Dubai’s economy, bringing in more than Dh14.7 billion during the 2012 DSF – or the equivalent of $1 billion per week.
Gassan Aridi, Chief Executive Officer of Alpha Tours, told Gulf News: “The DSF has been a major contributor to Dubai’s tourism industry and the overall economy. We usually receive 25 to 30 per cent more visitors to Dubai when hotel occupancy remains high. Besides, tour operators remain extremely busy with increasing number of city tours, desert safari, dinner cruises and other activities.”
Total shopping spend rose from Dh8.7 billion to Dh8.9 billion, and accommodation spend was up from Dh2.7 billion to Dh2.8 billion, DEPE said in a report. “Our offering in retail and events is, we believe, second to none, and we will strive through a coordinated government approach and through continued and innovative partnerships between our public and our private sectors,” Sami Al Qamzi, Director General of the Department of Economic Development, said in a statement in December.
The International Festivals and Events Association (IFEA), the world’s leading events trade association, crowned Dubai with the prestigious “World Festival and Event City 2012” recognition last year in the category for cities with a population of more than one million. DSF was one of the highlighted events in the award entry.
“The Dubai Shopping Festival has broken new ground in establishing tourism and retail standards and benchmarks. Further, DSF has also successfully showcased the capability of Dubai and the UAE in hosting events of an international scale,” Ebrahim Saleh, Coordinator-General of DEPE, told Gulf News.
“Through a combination of world-class events and mind-boggling shopping-related offerings DSF has succeeded in creating a base of tens of thousands of repeat visitors, as well as enticing new tourists to visit Dubai during DSF,” he says.
The power of DSF sale are felt not only by the retailers, but also the credit card brands, such as Visa, which remained a loyal partner of the DSF for a long time. International visitors to the UAE have spent over $153 million on their Visa cards in the first week of Dubai Shopping Festival 2013, registering a massive 34 per cent year-on-year growth over the first week of DSF 2012, according to statistics issued today by Visa. Karim Beg, Visa’s Head of Regional Marketing for MENA, said, “Visa achieved a 22 per cent year on year growth during DSF 2012, with inbound card spend totalling more than $497 million (Dh1.82 billion) compared to $406 million during DSF 2011.”