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: UAE FreeZone Newsletter - Issue 39 - July 2007 |
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UAE stays among top 20 attractive retail markets
The UAE and Saudi Arabia are among the top 20 countries in a ranking of 30 emerging markets according to their retail investment attractiveness.
Conducted by management consulting firm A.T. Kearney, the Global Retail Development Index (GRDI) list has more countries from the Middle East and North Africa (Mena) in the top 20 than either Asia or the Americas.
"In the Middle East we can see that population figures catapult Saudi Arabia and Egypt to top positions, while the UAE's low risk assessment makes it a very attractive location for retailers in the region," said Dirk Buchta, managing director of A.T. Kearney, Dubai, as quoted by Gulf News.
Published since 2001, the GRDI ranks emerging countries on a set of 25 variables including economic and political risk, retail market attractiveness, retail saturation levels, and the difference between gross domestic product growth and retail growth. The survey focuses on opportunities for mass merchants and food retailers.
In the survey's results, Saudi Arabia jumped an impressive seven places to the tenth position, while the UAE lost two places from last year to hold itself just within the top 20 at 18.
Central and Eastern Europe has six countries in the top 20.
Asian countries Vietnam, Malaysia and Thailand are also among the top 20, proving that Asia's attractiveness for retail expansion is not limited to just India and China.
According to A.T. Kearney, the window of opportunity for global retailers is closing in the booming economies of India, Russia and China.
As larger cities in these countries reach retail saturation, retailers are entering countries through smaller second- and third-tier cities where consumers are ready to embrace western-style retail concepts and products, thanks to the influence of television, films and the internet, said Robert Ziegler, principal at A.T. Kearney, Dubai.
"Successfully entering a new country via smaller cities requires careful identification of cities with consumers who are ready to embrace modern retail formats. Incomes are smaller and products need to be customised for different markets," he said.
"But with the right strategy, smaller cities can be attractive targets for retailers that missed the 'window of opportunities' in major cities and for established retailers looking for growth." A.T. Kearney also advised retailers to consider the effect of an available and well-educated labour supply in their expansion decisions.
"This year that analysis points to Malaysia and Chile as alternate expansion choices because of their labour advantages," said Ziegler.
Both countries received strong marks in the consultancy firm's retail labour Index, a measurement of the strength and skills of the country's retail workforce in relation to its position on the GRDI. |
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Courtesy The Emirates News Agency
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