Why the UAE is an attractive proposition for retailers

Retail is big business in the Middle East, as multinational companies seek to capitalise on the growing popularity of the region.

While Dubai remains the jewel in its retail crown - the recent MasterCard rankings predicted there will be 14.3 million international visitors to Dubai in 2015, making it the fourth top destination for foreign travellers - there are signs that the rest of the region is catching up.

A new market is being built in Doha with an investment of some 206 million Qatar riyal (£36.1 million), Abu Dhabi has given the green light for the construction of the $1 billion (£638 million) Reem Mall, and the Gulf Cooperation Council is forecasting retail sales to reach $284.5 billion by 2020.

This underlines how important the industry has become in the Middle East. And with the region looking to position itself as the number one place in the world to shop, there are plenty of opportunities for retail marketing professionals.

UAE to the fore

The UAE is one of the world's top ten most attractive markets for retailers, according to Arcadis' latest Retail Operation Index. The nation has been ranked in eighth position overall, putting it ahead of countries including the Netherlands and Sweden. It is also the number one Middle Eastern nation, followed by Qatar (15th place), Saudi Arabia (17th), Kuwait (32nd) and Egypt (50th).

So what makes the UAE such a popular location for retailers? Five main reasons have been identified by the index:

  1. Overall quality of infrastructure (3rd ranked globally)
  2. Ease of getting a business up and running (11th)
  3. Market demand (11th)
  4. Economic environment (3rd)
  5. Business environment and ease of operating (9th)

"Retailers in the UAE experience some of the best conditions in the world in which to operate in, benefitting from a strong quality of infrastructure and a robust economic environment," the report added.

A flourishing region

The UAE is expected to flourish in the coming years, as unlike many other parts of the world, the region is economically stable and has an ever-improving level of consumer confidence. This means retailers with genuine international aspirations need to think about how they can best plan their expansion into the region.

Enhancements are also being seen in the prevalence of foreign ownership, trade freedom and logistics performance across the UAE market, which is helping to create a more stable and attractive base for operations.

"The strategic location and physical presence of a store will continue to help successful retailers in the UAE make the greatest use of their store portfolios and brand marketing to attract customers," said Christopher Seymour, head of Middle East Markets at Arcadis.

He added the quality of roads and the metro network is another key factor in the success of the sector, as it means younger people, expats and tourists can all avail of the direct metro links to shopping malls.

With retail groups expanding their footprints across the Middle East, now really is the time for retail marketers to put their experience to good use in what will be rewarding and challenging new surroundings.