As the two-day Retail Summit draws to a close after witnessing strong participation by over 70 key C-suite speakers and over 800 attendees from around the world at the Atlantis, The Palm, Dubai, the key theme that dominated the conferences and panel discussions was digital transformation in the retail industry.
As the industry is in its recovery phase following the pandemic, global inflation, supply chain challenges and technological disruptions, a retail shakeup is inevitable. In addition, the drastically changing customer behaviour leaning towards purpose-driven, sustainability-conscious, value-oriented brands and retailers have made even the most established retailers from the region question their operations and direction.
According to H.E Hamad Buamim, President and CEO of Dubai Chambers, technology is the biggest game-changer today. “I believe technology will bring new players to the market that didn’t exist before. And many of the players that have been in the market for tens of years will be out,” he said.
Back in 2016-17, when the surge in e-commerce was pointing towards a ‘retail apocalypse’ that never really happened, many international retailers started rethinking their models and heavily investing in their digital transformation journeys. The Middle East, however, lagged behind.
“(Back then) whenever we spoke about e-commerce, the conversation would be dominated by Amazon or Facebook. Local players were looking at it, as though the change will only come about in 5-10 years, as it only accounted for 1-2% of the bottom line (and top line)” he said. “This isn’t the case now. Today, it makes up 15-20% of its revenues. And this makes all the players look really bad.”
For a region that has been dominated by family businesses, and a sector where merchant families have enjoyed their monopolies for decades, this might come as a seismic shift. In fact, the UAE government even announced reforms recently that aims to remove monopolies on the sale of imported goods, giving foreign firms the flexibility to distribute their own goods or change their local agent on contract expiry.
“Covid-19 accelerated a lot of this and escalated the process of digitisation – which would have otherwise taken 10 years – to 3 years. This would also accelerate the death of some of the old companies and the growth of the new ones – even those that didn’t even exist before. We think there will be new players that will either come into this market (from outside the region) or are starting in this market, which will flourish and become a huge influence,” he explained.
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