Dubai: These days there is no such thing as waiting too long to devise an offline-online strategy when entering a new market. Chances are both options will be taken up … almost simultaneously.
That’s just what the Dutch home and lifestyle department store brand Hema is going about doing in the Gulf markets. It was early this year that the retailer opened a presence in the UAE and will close 2019 with 10 locations GCC-wide.
But as the brick-and-mortar flags are planted, Hema is finalising its online sales strategy with its regional partner, Apparel Group. The idea is to get the online side of things up and ready by early 2020 itself.
For the moment, though, Hema is counting down to October 1, when its merchandise will become available through walmart.com in the US, which also marks its debut in the all too important North American territory.
“In the US, we will only sell through the Walmart portal and not have a physical store,” said Richard Flint, Chief Operating Officer at Hema. “It gives us access to one of the biggest marketplaces in the world. Walmart wanted to fit in a European lifestyle brand into their mix, and we felt it was the best way to get into the US.”
The plan is to extend the reach into Canada, online and off-, some time next year.
Chalking out a Gulf plan
If everything goes to plan, Hema products will be available online by next year, and through an Apparel operated platform. “We committed to a partnership on all fronts … Apparel has delivered with other Dutch-owned brands like Rituals, Tommy Hilfiger and Calvin Klein (the latter two are owned by PVH Corp.),” said Flint.
“We do have our own dotcom, but we do not believe in limiting ourselves when it comes to partnerships for online. That’s the idea behind tying up with a marketplace like Walmart. And customers are already on these marketplaces … and that’s where we want to join them. Gone are the days when as a retailer you sell only through your own channels. Instead, we are about giving the best access for consumers to reach the brand.” (Even in its home market, Hema has made its products available on the e-marketplace Wehkamp, while it sells through its own e-platform.)
For the Apparel Group, the HEMA tie-up diversifies their franchise alliances beyond fashion labels. In its home market and elsewhere in Europe, Hema has managed to build up a following for its merchandise, all clean lines and discrete hues. By year-end, 10 stores will be up and running in the Gulf, and the plan is to add 10 for each of the next four years. And, of course, get online as well.
The brand will start selling non-perishable food items through the stores in the short-term. But there is no plan to get into fresh produce.
“It’s about playing to our strengths and it’s there in lifestyle products, baby and kid’s items,” said Flint.
* It was in October last year that Hema was acquired by Ramphastos Investments from London-based Lion Capital.
* In the Gulf, online groceries is now one of the fastest growing e-tailing categories. Nearly all supermarkets are offering grocery shopping options either through their websites or through a partner such as El Grocer. “Carrefour has a multi-pronged strategy with CarrefourNow focused on instant deliveries and CarrefourUAE focused on hypermarket style purchases,” said Sandeep Ganediwala of RedSeer Consulting. “Players such as Amazon and Noon have also entered this market. Also there are online-only players such as Nana Direct in Saudi Arabia, which has raised significant funding.”