UAE and Saudi Shine as geopolitical tensions pose challenges for Middle Eastern retailers
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Dubai: Retailers operating franchises of Western brands in the Middle East are encountering challenges amidst geopolitical tensions in the region. While the UAE and Saudi Arabia remain bright spots for retail, businesses are navigating complexities to maintain stability and growth.
Brands in the UAE and the broader region are advised to implement awareness schemes to ensure they are perceived as neutral entities. In an open market where all brands are welcome, maintaining neutrality is crucial to sustaining consumer trust and loyalty.
According to John Hadden, CEO of Alshaya Group, despite the current challenges, there are significant opportunities for growth in the GCC markets.
“At the moment, it is challenging due to geopolitical tension in the region that has definitely affected some consumer sentiment that we operate in. But I am very bullish about the markets in the future. With related to GCC, we strongly believe in four markets — Qatar, Kuwait, UAE and Saudi Arabia. They are drivers of any business that you have in this region. If you want to be successful here, you have to focus on those markets, especially UAE and Saudi Arabia. At the moment, the UAE is the strongest market in the GCC. This market is booming and is on fire in terms of population growth and tourism,” Hadden said during The Retail Summit in Dubai on Tuesday.
Geopolitical tensions have contributed to fluctuations in consumer sentiment, impacting business operations. Reports of consumer boycotts linked to geopolitical events, such as the Gaza war, have led to workforce reductions and operational adjustments for some retailers.
With a population of 55 million in the GCC, Saudi Arabia and the UAE stand out as key markets for retailers. Over half of the population resides in Saudi Arabia, with a significant portion under the age of 35, highlighting the potential for retail growth and innovation.
The annual two-day Retail Summit began in Dubai on Tuesday with a large number of industry executives taking part and attending the summit.
Senior executives of AlBaik, Apparel Group, eyewa, Amazon, MAF Retail and many other brands will attend the summit at Atlantis The Palm.
Faisal Juma Khalfan Belhoul, vice-chairman of Dubai Chambers, emphasizes the importance of consumer perception in shaping brand success.
“Dubai is an open market and all brands are welcome. But at the end of the day, the brands need to create the right awareness schemes to ensure that deemed as neutral brands”, said Belhoul.