The UAE’s position as a retail hub makes it the second most attractive venue for international retailers, according to GulfNews.com.
The UK stood at number one position for the third year running with 58% of brands in the survey present in the country, the report says, citing a CB Richard Ellis report. In second place was the UAE, with 54% and the US was third with 51%.
The survey included 294 retail brands in 69 countries.
“Out of all the brands surveyed, 54% were prevalent in the UAE,” CB Richard Ellis Middle East senior retail consultant Michael Leighton was quoted as saying.
He reckons there is still a huge potential for new brands to come into the region. He attributes the increased presence of international retail outlets in the UAE to the opening of two big malls: Dubai Mall and Mirdif City Centre.
“The last quarter (for example) saw Bloomingdales and Crate & Barrel, two of America’s favourite brands, open in Dubai,” Leighton says.
The attractive franchise model in the UAE also played its part in encouraging international brands to set up shop there.
The franchise model in the UAE which allows for a maximum turnover provides brands an opportunity to enter the region at a lower cost, the report adds.
This onslaught of franchise has however created more competition for smaller independent stores. Franchises also controlled multiple retail outlets, causing concerns about the lack of innovation.
The report noted significant shifts in ranking of global retail cities in the past year, with markets such as Beijing, Shanghai and Moscow making their way into the top 10 and Riyadh, Jeddah and Kuwait moving into the top 20 of the most penetrated international retail markets.
Middle Eastern cities dominated the mid-range fashion sector with Dubai at the top.
Kuwait, Riyadh, Jeddah and Abu Dhabi featured in the top 10.
According to industry experts, the retail focus is likely to shift towards Abu Dhabi which has a lot of malls in the pipeline although these malls will remain small relative to Dubai’s.
