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Yas Mall in Abu Dhabi

UAE tops region for retail growth prospects

DUBAI, July 3, 2017

The UAE, ranked fifth in the newest edition of the A T Kearney Global Retail Development Index (GRDI), remains the most attractive market in the region with strong growth opportunities beyond Dubai, said the global management consultancy.

The UAE it still offers an attractive retail proposition even though growth has slowed down, said the study.

 Innovation was the main theme for the UAE last year – strip malls, unique format, entertainment centers, outdoor cinemas, all aiming to spark and sustain consumer interest. E-commerce has grown at about 30 per cent in the past few years and the recent developments (Amazon purchase of Souq.com and Noon.com) prove the strong growth trajectory of e-commerce.

Saudi Arabia, the other major retail market in the region, ranked 11th. Despite the challenging economic situation in the country, the retail sector was quite resilient and grew by 4.6 per cent on 2016. The sector is one where the government aims to create a lot of new Saudi jobs and is focusing on growing modern formats and e-commerce. Recent regulatory changes, such as allowing 100 per cent foreign ownership in retail and increased financing to small retail enterprises, will strengthen the further development of the sector.  

Morocco (#7) rose again in the rankings, up seven positions this year thanks to government efforts to attract foreign investments. Mall expansion in Algeria (#14) and a greater tourist flow in Tunisia (#24) have supported retail expansion. Egypt, one of the region’s biggest markets, did not make the 2017 Index because of the uncertainty in the market.

The 2017 GRDI, titled “The Age of Focus,” ranks India as the top developing country for retail investment. India’s strong GDP growth and growing middle class coupled with a more favorable regulatory environment over the past few years have played significant roles in attaining this ranking. China enters the ranking at a second place despite its slower overall economic growth. The market’s size and the continued evolution of retail still make China one of the most attractive markets for retail investment.

Yana Petrova, co-author of the study, A T Kearney said: ”This years` study finds global retailers faced with intensifying competition from local and regional retailers that have grown increasingly more sophisticated. Advancements in retail technology and e-commerce, requires retailers across the world to stop up and rethink their strategies.”

The study includes a special deep-dive into the rise of mobile shopping and its impact on global retail expansion. In many developing markets, mobile retail is the primary form of online.

“Mobile shopping is challenging the ways retailers think about global expansion, as well as about their role in the value chain,” said Mike Moriarty, an A T Kearney partner and co-author of the study. “We are expecting more retailers to use mobile as part of their future expansions plans.” – TradeArabia News Service




Tags: UAE | A T Kearney |

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