Dubai: Babyshop, a Dubai-based childrenswear retailer, is considering focusing more on promotions to maintain the volume of consumers’ purchases if the growth of the retail market continues to slow down, according to a top company official.
The retail market has softened this year due to factors including lower consumer confidence and a drop in spending from European and Russian tourists, mainly because of the weaker euro and rouble. This has caused the mid-market retailer to be “cautious”, Vinod Talreja, chief executive of Babyshop, said in an interview.
“We try, under current circumstances, to give better value to customers. We bring a lot of mid-prices because we know that the economy is not as good as in previous years. Customers are looking for better value. So we try to see that they buy the same number of garments but at slightly adjusted prices,” he said.
He said that Babyshop saw single-digit growth in sales during the Eid Al Adha holiday last month, which was below expectations. He said that this was because it closely followed the back to school season, so consumers were cautious about spending during that time.
“When the back to school season comes, a lot of the money goes into school fees and buying school supplies and uniforms. Eid comes immediately after that and there is a little bit of money left,” he said.
In terms of its online business, the company said it will focus on having a wider range of products on its e-commerce site than its brick and mortar stores in the coming years to attract buyers online. Babyshop currently has around 10,000 products online.
“We are promoting certain product lines on our eCommerce site, like Mommy’s Monday. So on Monday, there will be special offers and better prices than our brick and mortar stores,” Talreja added.
Babyshop plans to strengthen its presence in the UAE and the wider Middle East and Africa region, with 11 stores scheduled to open in the financial year ending June 2016 in the UAE, Saudi Arabia, Oman, Iraq, Pakistan and Nigeria, Talreja said.
The six stores set to open in the UAE will be located in Abu Dhabi, Sharjah and Dibba Al Hisn.
Talreja declined to state the size of the investment for the expansion.
He said that the company is eyeing new markets to expand into, but did not name them. Asked if the company is interested in entering Iran, he said: “When the right time comes, it will definitely be one of the markets that we will be eyeing.”
Babyshop operates 221 stores in the region.