Market Watch: Arabic sandals: a major competitive force

Our feet help us to balance, and carry us the equivalent of five times around the earth in an average lifetime, so they say. With so much hard work, our feet deserve to be supported and allowed to 'breathe' - something that sandals provide.

Sandals have been around for a long time. They were once very simple, but over the years, their designs became more and more beautiful and complex.

With new global trends coming up and the demand for quality remaining high, companies are competing with each other to create fashionable designs - and yet not losing the simplicity.

Arabic sandals, the most preferred footwear of Arab nationals, are open. They are styled like this because the weather in the GCC is hot and humid.

It is because of the heat that many Arabs prefer not to wear socks and shoes which enclose their feet all the time.

Also, tradition does not allow for people to walk with shoes or sandals on carpets and rugs. Sandals are popular because they are easy to wear and to take off.

Additionally, Arabic sandals can be worn at any occasion - formal and informal.

While sandals come in many models, they also come in many colours. Black is the most popular followed by neutral tones including off-white or cream, grey, beige and browns.

Sandals contribute about 35 per cent (2.8 million pairs) of total footwear imports to the UAE.

This gives approximately six pairs of sandals a year for every user, says a study by Emirates Industrial Bank (EIB).

The market is huge, with the annual business volume standing at around Dh35 million, said Wassim Nabulsi, financial controller, Bin Kamal Stores - which has been in the market for almost 23 years, with 13 branches in the UAE.

Market size

The profit margin in this sector varies at each store.

For example, some stores in shopping centres may take more profit than ones on an ordinary street. The rent and location of the shop dictates the profit, said N.N. Rao, general manager, retail, Shoe Mart.

In the UAE, there are four major players in the market including Al Mandoos, Bin Kamal, Faris and Cesar Paciotti.

"Some of these stores sell about 150,000 pairs of Arabic sandals every year. In addition, the majority of Arabic sandal consumers are Arab nationals making up 90 per cent of the market, and the rest (10 per cent) are Arab expatriates from Egypt, Lebanon, Syria and Jordan," said Nabulsi.

Prices can range from as low as Dh150-Dh500 right up to Dh800 to Dh1,000.

Of the major players in the market, only Al Mandoos manufactures its products locally.

The store, which has 13 branches in the UAE, has had a factory in Al Ain since 1989. The factory, called Al Dana leather products plant, produces Arabic sandals solely for Al Mandoos.

"The sandals are made of the finest and expensive leathers, from snake leather to the ostrich, deer and crocodile - that give a quality aspect. And some sandals are made from cheap hide of cow and sheep. All our hide is imported from Italy," said Nasser Abdulaziz Al Tamimi, plant manager, Al Dana leather products factory.

The major players, which do not have local production, import their goods from Italy, Spain, Portugal, Cyprus, Turkey, and Thailand.

For many years, the ladies' sandal market has remained steady.

The Arabic ladies sandals are moving very fast all year round. This is because they are comfortable, fashionable and come in many colours, explained Nabulsi.

Prices

Within the market, there are varying views on what is happening with the price of sandals.

On the one hand, there is Nabulsi who says prices fluctuate.

Then there is Rao, from Shoe Mart, who says prices remain stable.

"In fact, our prices went down by 30 per cent over the past few years," said Nabulsi.

"The margin is facing a decline every year. Ten years back, our margin used to stand on around 200 to 300 per cent, but now with new competitors and new brands entering the market, prices are coming down.

"Also, some brands are manufacturing their products locally, so the production doesn't cost them much, and this surely effects the prices."

Rao said his prices do not change much. "Whatever benefits we get from our suppliers globally, we pass it on to our customers with our prices. "We don't show the fluctuation in the price to our customers."

High season

There are busy and low times for sandal sales in the UAE, say experts.

Customers, especially UAE nationals, tend to buy sandals during Ramadan and between Eid Al Fitr and Eid Al Adha.

The sale of sandals is heavily boosted during festivals and vacations.

However, there are also low periods for business.

The downtimes fall in March, April, October and after the Eids.

To boost business during the slow times, companies run promotions and increase advertising.

"We spend almost Dh200,000 annually (around 5 per cent) from our turnover on advertising and some promotions like buy one and get one free," said Nabulsi.