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March 2017
Bahrain BD5.0 | Oman RO5.0 | Kuwait KD4.0 | Qatar QR50 | Saudi Arabia SR50 | United Arab Emirates AED50
www.imagesretailme.com
RETAIL THOUGHTSDilip Kapur
ANALYSISGCC Food Market
RETAIL TECH WATCHOracle
HOUSEWARE TRENDSHome + Housewares Show
CEO TALKSSaid Daher
MARCH 2017 | RETAILME | 3
RETAIL THOUGHTS 6 Defining the art of entrepreneurship
NEWS 10 GAP Factory Store launches in Dubai 11 ZOOM recognised for best international store design 12 Ferrari World Abu Dhabi to launch ‘Turbo Track’ 14 Aloha Abu Dhabi Festival returns to Al Raha Beach 15 Phased redevelopment of City Centre Mirdif car park 16 Ibn Battuta expansion to add new residential tower
ANALYSIS 18 GCC food consumption projected to grow 22 Fashion trends 2017
YOUNG & ENTERPRISING 36 A brand with a meaningful cause
INTERNATIONAL VIEW 40 A French brand’s international success story
LEISURE & ENTERTAINMENT 44 Bee-life inspired edutainment concept
HOUSEWARE TRENDS 47 Housewares sector bullish despite uncertainty
RETAIL TECH WATCH 50 Empowering retailers
COVER STORY
2253
The global apparel market is valued at more than $3 trillion and accounts for 2% of the world’s GDP. If ranked alongside individual countries’ GDP, the global fashion industry would represent the world’s seventh largest economy...
VOL 7 ISSUE 6
March 2017
Bahrain BD5.0 | Oman RO5.0 | Kuwait KD4.0 | Qatar QR50 | Saudi Arabia SR50 | United Arab Emirates AED50
www.imagesretailme.com
RETAIL THOUGHTSDilip Kapur
ANALYSISGCC Food Market
RETAIL TECH WATCHOracle
HOUSEWARE TRENDSHome + Housewares Show
CEO TALKSSaid Daher
CONTENTS
OMNICHANNEL 53 Setting up an effective omnichannel strategy
FOOD WATCH 56 A neighbourhood brasserie hidden in JBR
REAL ESTATE 58 Construction of ‘My City Centre Sur’ Oman begins 59 Nakheel receives construction bids for Deira Mall
CEO TALKS 60 In tune with the times
STORE OF THE MONTH 66 ETRO
47
640 36
60
4 | RETAILME | MARCH 2017
Disclaimer: Every care has been taken to ensure the accuracy of information contained in this publication.However, the publisher will accept no responsibility for any error or omission in the content. Copyright © 2016 IMAGES Multimedia fz llc. All Rights Reserved.No part of this publication may be reproduced without the prior written consent of the publisher/copyright owner.
PO Box 502316, Dubai, UAETel +971 4 4467555 Fax +971 4 4469707Email: [email protected]
Editor-in-Chief
Amitabh Taneja
EDITORIAL
Managing Editor
Lawrence Pinto
Editor
Rupkatha Bhowmick
DESIGN & PRODUCTION
Creative Head
Johnson Machado
ADVERTISING & MARKETING
Manager – Business Development
Nikhil Gupta
SUBSCRIPTIONS
Jehan Mandap
EVENTS
Misba Naushad
DISTRIBUTORS
Sources:
UN, IMF, WEF, WTO,
Economic Intelligence Unit, Euromonitor,
National Statistics,
National Statistical Planning,
National Chambers of Commerce,
Department of Tourism and Commerce Marketing (DTCM), Dubai,
Retail International, AC Nielsen, KFI Research,
McKinsey, Al Rajhi Capital, Al Masah Capital Ltd,
A T Kearney, Alpen Capital, Cushman & Wakefield, Planet Retail, IDG,
Colliers International, CBRE, JLL.
Dear readerIn this issue, we review two critical sectors – food and fashion – affecting the lives of the entire world’s population. In the first report, we look at the global apparel market, valued at more than $3 trillion accounting for 2% of the world’s GDP, according to McKinsey & Company’s The Business of Fashion (BoF) report.
McKinsey report states that “fashion is one of the world’s most important industries, driving a significant part of the global economy. If ranked with each country’s GDP, the global fashion industry would represent the world’s seventh largest economy.”
The State of Fashion report, McKinsey’s first, lays the foundation for rigorous, in-depth research and analysis of the global fashion industry. The report focuses on the themes, issues and opportunities impacting the sector and its performance.
Alpen Capital in its latest GCC Food Industry report states GCC food consumption will expand at a CAGR of 4.2% from an estimated 48.1 million MT in 2016 to 59.2 million MT in 2021. This growth is primarily attributed to increase in the consumer base, coupled with a higher per capita income, as the GCC economies stage a sustained economic recovery from the recent downturn.
Dilip Kapur, the founder and owner of Hidesign, shares his ‘Retail Thoughts’ in this edition. Established almost 40 years ago, today Hidesign is a globally known luxury brand specialising in leather goods with craftsmanship and sustainability at its core. It’s a brand that started in the year 1978 with a small sum of 25,000 Indian rupees.
In the ‘Retail Tech Watch’ section, Oracle shares how and where it is implementing its retail solutions to help retailers enhance their omnichannel journey and customer experience.
We also review the outlook for housewares in 2017, which looks healthy despite the political and economic uncertainty that characterised 2016 both in the US and around the globe. More than 2,200 exhibitors will take part in the 2017 International Home + Housewares Show from March 18-21 at Chicago’s McCormick Place Complex. Copies of RetailME March edition will be on display at the show once again this year.
Don’t miss the RetailME April edition, which apart from having special coverage on leisure and entertainment and Gulfood, will also have its presence at World Retail Congress 2017.
6 | RETAILME | MARCH 2017
Almost heading towards its 40th anniversary, today Hidesign is a globally known luxury brand specialising in leather goods with craftsmanship and sustainability at its core. It’s a brand that started in the year 1978 with a small sum of 25,000 Indian rupees; its employees being the founder himself, Dilip Kapur who turned his hobby into an entrepreneurial endeavour, along with a cobbler. Kapur grew up in the lap of nature at the Aurobindo Ashram in Auroville, a township in Tamil Nadu, India. Quite naturally he decided to engage with nature, even as part of his business. Today Hidesign is very popular
for its handcrafted, one-off, exclusive leather pieces. Each of his leather pieces is tanned using natural seeds of Myrobalan and barks of Wattle trees. At the age of 15, Kapur went to the US finishing his schooling at Phillips Academy, Andover, Massachusetts. After graduating from the Princeton University in International Affairs, he completed his PhD at the University of Denver. His degrees, however, have no connection with his entrepreneurial dreams, incubated during his first stint as an intern in a leather factory. Soon he decided to move back to Auroville and started making leather bags, distinctly different
from what was readily available in the market – in India and beyond – to keep himself occupied; thus, started the journey of a brand that would become globally known. Interestingly, Hidesign bags found their way into Germany, Australia and the US much before they became popular in India in the year 1998 with its first exclusive boutique. Today Hidesign’s distribution network spans 23 countries with its products present in over 2,000 stores globally.In a conversation with Rupkatha Bhowmick, Kapur says it takes a degree of both passion and business acumen to run an entrepreneurial endeavour. Here’s a firsthand account..
I was born into a business family and also had the passion to do something
of my own. But I was quite idealistic, ignorant and didn’t really have a mentor. My thought process was very different and sometimes unconventional too. When I decided to start a leather business, I thought the brand name should imply hide (leather) and design, with ‘de’ in shadows – reminiscent in many ways of the 1960s and 70s. It reflected my hippie core. However, when we started working with a PR agency in London they suggested that the brand name exuded too much hippie-ness and that we should consider changing it to one word ‘HIDESIGN’ in capital letters, which was a smart idea.
While the brand has been around for almost 40 years, most of these years spent on enjoying creating products that reflected our values
RETAILTHOUGHTS
Defining the art of entrepreneurshipDilip Kapur
18 | RETAILME | MARCH 2017
ANALYSIS
GCC food consumption projected to grow
Exhibit 1: Population Growth in the GCC
Exhibit 2: GDP Per Capita (PPP) in the GCC (2016E)
Exhibit 5: Per Capita Food Consumption in the GCC (2014)
Exhibit 7: Category-wise Food Consumption Growth
Exhibit 15: Global Food Price Indices
28.4 30.0 31.4 32.0
8.5 9.0
9.6 9.9 3.7
3.9 4.1 4.2
3.0
3.6 3.8
4.0
1.7
2.0
2.4 2.6
46.5
49.8
52.6 53.9
20
30
40
50
60
2011 2013 2015 2016E
Mill
ion
Bahrain
Qatar
Oman
Kuwait
UAE
Saudi Arabia
CAGR:CAGR: 3.0%
2011 - 2016
2.0%
8.6%
5.7%
2.8%
3.0%
2.4%
$11,110
$43,737
$47,001
$50,303
$54,078
$60,678
$67,696
$71,264
$129,727
$0 $30,000 $60,000 $90,000 $120,000 $150,000
Emerging &Dev. Economies
Oman
AdvancedEconomies
Bahrain
Saudi Arabia
GCC
UAE
Kuwait
Qatar
US$
Source: IMF – October 2016
492.5
722.2
781.6
824.3
847.3
892.7
961.6
0 200 400 600 800 1,000 1,200
Bahrain
Qatar
Oman
UAE
Kuwait
GCC
Saudi Arabia
Kg
1.2%
3.0%
5.8%
6.8%
8.1%
8.5%
0% 1% 2% 3% 4% 5% 6% 7% 8% 9%
Vegetables
Meat
Fruits
Cereals
Others
Dairy
CAGR: 2009 -2014
100
150
200
250
300
Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
Food Price Index Meat Price Index Cereals Price Index Dairy Price Index
Source: IMF – October 2016
Source: IMF, AOAD, FCSA of UAE, NCSI of Oman, CIO of Bahrain
Source: AOAD, FCSA of UAE, NCSI of Oman, CIO of BahrainNote: ‘Others’ food category comprises potatoes, pulses, fats & oil, �sh, and eggs
Source: BloombergNote: The base year for the indices is 2002-2004; The Food Price Index tracks the global prices of �ve major food groups including cereals, meat, dairy products, vegetable oils, and sugar
Exhibit 1: Population Growth in the GCC
Exhibit 2: GDP Per Capita (PPP) in the GCC (2016E)
Exhibit 5: Per Capita Food Consumption in the GCC (2014)
Exhibit 7: Category-wise Food Consumption Growth
Exhibit 15: Global Food Price Indices
28.4 30.0 31.4 32.0
8.5 9.0
9.6 9.9 3.7
3.9 4.1 4.2
3.0
3.6 3.8
4.0
1.7
2.0
2.4 2.6
46.5
49.8
52.6 53.9
20
30
40
50
60
2011 2013 2015 2016E
Mill
ion
Bahrain
Qatar
Oman
Kuwait
UAE
Saudi Arabia
CAGR:CAGR: 3.0%
2011 - 2016
2.0%
8.6%
5.7%
2.8%
3.0%
2.4%
$11,110
$43,737
$47,001
$50,303
$54,078
$60,678
$67,696
$71,264
$129,727
$0 $30,000 $60,000 $90,000 $120,000 $150,000
Emerging &Dev. Economies
Oman
AdvancedEconomies
Bahrain
Saudi Arabia
GCC
UAE
Kuwait
Qatar
US$
Source: IMF – October 2016
492.5
722.2
781.6
824.3
847.3
892.7
961.6
0 200 400 600 800 1,000 1,200
Bahrain
Qatar
Oman
UAE
Kuwait
GCC
Saudi Arabia
Kg
1.2%
3.0%
5.8%
6.8%
8.1%
8.5%
0% 1% 2% 3% 4% 5% 6% 7% 8% 9%
Vegetables
Meat
Fruits
Cereals
Others
Dairy
CAGR: 2009 -2014
100
150
200
250
300
Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
Food Price Index Meat Price Index Cereals Price Index Dairy Price Index
Source: IMF – October 2016
Source: IMF, AOAD, FCSA of UAE, NCSI of Oman, CIO of Bahrain
Source: AOAD, FCSA of UAE, NCSI of Oman, CIO of BahrainNote: ‘Others’ food category comprises potatoes, pulses, fats & oil, �sh, and eggs
Source: BloombergNote: The base year for the indices is 2002-2004; The Food Price Index tracks the global prices of �ve major food groups including cereals, meat, dairy products, vegetable oils, and sugar
Exhibit 1: Population Growth in the GCC
Exhibit 2: GDP Per Capita (PPP) in the GCC (2016E)
Exhibit 5: Per Capita Food Consumption in the GCC (2014)
Exhibit 7: Category-wise Food Consumption Growth
Exhibit 15: Global Food Price Indices
28.4 30.0 31.4 32.0
8.5 9.0
9.6 9.9 3.7
3.9 4.1 4.2
3.0
3.6 3.8
4.0
1.7
2.0
2.4 2.6
46.5
49.8
52.6 53.9
20
30
40
50
60
2011 2013 2015 2016E
Mill
ion
Bahrain
Qatar
Oman
Kuwait
UAE
Saudi Arabia
CAGR:CAGR: 3.0%
2011 - 2016
2.0%
8.6%
5.7%
2.8%
3.0%
2.4%
$11,110
$43,737
$47,001
$50,303
$54,078
$60,678
$67,696
$71,264
$129,727
$0 $30,000 $60,000 $90,000 $120,000 $150,000
Emerging &Dev. Economies
Oman
AdvancedEconomies
Bahrain
Saudi Arabia
GCC
UAE
Kuwait
Qatar
US$
Source: IMF – October 2016
492.5
722.2
781.6
824.3
847.3
892.7
961.6
0 200 400 600 800 1,000 1,200
Bahrain
Qatar
Oman
UAE
Kuwait
GCC
Saudi Arabia
Kg
1.2%
3.0%
5.8%
6.8%
8.1%
8.5%
0% 1% 2% 3% 4% 5% 6% 7% 8% 9%
Vegetables
Meat
Fruits
Cereals
Others
Dairy
CAGR: 2009 -2014
100
150
200
250
300
Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
Food Price Index Meat Price Index Cereals Price Index Dairy Price Index
Source: IMF – October 2016
Source: IMF, AOAD, FCSA of UAE, NCSI of Oman, CIO of Bahrain
Source: AOAD, FCSA of UAE, NCSI of Oman, CIO of BahrainNote: ‘Others’ food category comprises potatoes, pulses, fats & oil, �sh, and eggs
Source: BloombergNote: The base year for the indices is 2002-2004; The Food Price Index tracks the global prices of �ve major food groups including cereals, meat, dairy products, vegetable oils, and sugar
GCC food consumption is expected to expand at a CAGR of 4.2% from an estimated 48.1 million metric tonnes (MT) in 2016 to 59.2 million MT in 2021, according to latest GCC Food Industry report by Alpen Capital. This growth is primarily attributed to increase in the consumer base, coupled with a higher per capita income, as the GCC economies stage a sustained economic recovery from the recent downturn.“We expect the GCC food industry to grow at a sustainable pace. This growth is primarily attributable to factors such as growing population, higher per capita income, a vibrant tourism market, changing dietary habits and preferences and increasing penetration of organised retail. The government, as well as private sector investments, are being channelled towards augmenting the domestic food production capacity and supply, even as securing food sources in other resource-rich countries remains a top priority,” says Sameena Ahmad, managing director, Alpen Capital (ME) Limited.
22 | RETAILME | MARCH 2017
Looking back at 2016 Fashion executives from around the world reported in the first BoF-McKinsey Global Fashion Survey 2016 can be summarised in three words: uncertain, changing and challenging.
Indeed, this has been one of the toughest years ever for the global fashion industry. Terrorist attacks in France, the Brexit vote in the
ANALYSIS
Fashion trends 2017The global apparel market is valued at more than $3 trillion and accounts for 2% of the world›s GDP. The fashion industry includes many sub-industries, such as menswear, womenswear, children’s wear, footwear and sportswear.McKinsey & Company’s The Business of Fashion (BoF) report states that “fashion is one of the world’s most important industries, driving a significant part of the global economy. If ranked alongside individual countries’ GDP, the global fashion industry would represent the world’s seventh largest economy.”And yet, for some observers, fashion is still regarded as simultaneously frivolous and indulgent; and many of the sources of information about the industry are fragmented, incomplete or unreliable. Now, McKinsey is aiming to close that gap. “McKinsey’s first State of Fashion report lays the foundation for rigorous, in-depth research and analysis of the global fashion industry. The report is focusing on the themes, issues and opportunities impacting the sector and its performance.Over the last few months, the research firm has put together a global network of experts, research and analysis to put together a report that makes sense of the challenges and opportunities across all of the fashion’s market segments. The report covers from mass global discount retailers to exclusive luxury brands – as well as specific product categories and geographies, RetailME brings you the highlights of the report
UK and the volatility of the Chinese stock market have created shocks to the global economy, which has not been this volatile since the depths of the financial crisis of 2009. Meanwhile, consumers have become more demanding, more discerning and less predictable in their purchasing behaviour, which is being radically reshaped by
new technologies.But the shockwaves have
not only been external. Fashion companies have also been looking inward, implementing changes to their core operations – from shortening the length of the fashion cycle to integrating sustainable innovation into their core product design and manufacturing processes
– re-evaluating the entire fashion system itself.
Perhaps unsurprisingly then, 67% of the executives surveyed reported that conditions for the fashion industry have worsened over the past 12 months, a fact that is clearly borne out in the sector’s financial performance this year. Sales growth is on track to slow to just 2-3% by the
60 | RETAILME | MARCH 2017
It’s a family business – run by three brothers Wassim, Hasan and Said Daher – that started in Lebanon with a single clothing store called Subway in the heart of Beirut at Hamra. With an aim to diversify its business while offering lifestyle choices to consumers today the AZADEA Group holds a portfolio of over 55 international brands. Ranging from Zara and Mango in fashion to Eataly and Paul café in food service, from Gymboree for kids to Virgin Megastore in leisure and entertainment, KIKO Milano in beauty to Decathlon in sports to name only a few. The group operates over 650 stores in 13 countries across Middle East and Africa region.In conversation with Rupkatha Bhowmick, CEO Said Daher talks about the growth of the family business over the last four decades and the evolution of his role in the last two decades
When I joined the business, somewhere around
1994-95, it seemed as if I was a jack-of-all-trades. We used to do everything from checking inventory to unpacking boxes and even manning the stores. Gradually I started specialising in certain areas. Now we don’t get the opportunity to do all these things anymore.
It’s a nice feeling to get involved in all areas of business operations although now we are trying to become good leaders steering our
CEO TALKS
In tune with the times
Said Daher
