Overspending will not help win UAE online war
Even now, UAE’s biggest retail groups have only a small portion coming from e-tail
Dubai: For UAE retailers, it’s important not to “over spend” on their online presence as they are still trying to get the right mix with brick-and-mortar operations.
“Over doing it is just as big an issue as under spending,” said Khalid Solimon, Group CEO at Jashanmal Group. “Most retail groups here currently do not exceed a certain percentage from online selling, say, 10 per cent. That being the case, allotting resources requires a good deal of planning.
“At Jashanmal, we have in the last two years been going through a mega transformation towards more online sales. But we are not rushing the process. Nobody should either.”
Pitching it right
Other leading groups in the UAE – Al-Futtaim (with Ikea and Marks & Spencer, among other brands), the Chalhoub and Apparel groups, LuLu, and Majid Al Futtaim (with investments in a slew of online businesses, including Wadi.com), to name just five – are going through the same transformation, each at their own pace. At the same time, Amazon and noon are pulling in more buyers to do it online, though they are getting competition from the Chinese heavyweights. (At least, until the virus struck.)
But the fact remains that each year will see more UAE shoppers make more of their purchases online. How soon the UAE’s leading retail groups meet them there will dictate their fortunes.
“There’s a power struggle, and whichever space you are in, the need is to be as flexible as possible,” said Solimon. “Our focus is on what works – and we will not rule any option available.”
A 'Porsche' alliance
Jashanmal on Monday was working on its physical presence – it reintroduced the Porsche Design brand to Dubai, through a flagship store at Mall of the Emirates. “The brand has been absent from the market for a year now, the new store makes sure it did not stay away for way too long,” the CEO added.
The luxury label – which is into apparel, writing instruments and other accessories - earlier had an association with Bin Hendi Enterprises.
On whether the tie-up will allow Jashanmal to sell Porsche Design merchandise online as well, Solimon said: “Think of the store as being the pilot run… There is a lot we are negotiating for under the structure we have with the brand. Whatever formula works for both parties, we will pursue it.”
These days, market sources say, having the online selling rights for the local/Gulf markets is just as vital as operating the brand store. In recent deals, local franchisees have managed to secure these rights, whereby the online portals selling the brands’ merchandise in the UAE is handled by them.
Solimon declined to say whether this was the same plan with Porsche Design. “As I’ve said, what will follow in our deal is a complicated issue, because there are different product groups with different distribution rights.
“As for Jashanmal, we will keep aggressively expanding in the marketplace – we will not get caught in the offline vs. online debate. Whatever it takes to keep growing, that’s what we will do.”