Retailers in the UAE need to be 'bold', accelerate the diversification of their businesses and enhance their digital capabilities, as the country’s economy slowly emerges from a pandemic-inflicted slowdown, the chairman of Emaar Properties said.
“Of course, we are all being cautious, but we must not be afraid to act now in this new environment,” Mohamed Alabbar, who heads Dubai's largest-listed developer, said while hosting some of the UAE’s biggest retailers through a video conference.
“This is the time to fast track many initiatives, including our digital plans, customer experience, loyalty, efficiency and business diversification.”
The pandemic has infected more than 6 million people globally and claimed over 369,000 lives, according to Johns Hopkins University, which is tracking the outbreak worldwide. Covid-19 brought the world economy to a standstill as it disrupted global supply chains, brought the travel industry to halt and forced governments to close borders and shut all but essential businesses.
The global economy is set to contract 3 per cent this year and is projected to slide into the deepest recession since the Great Depression of the 1930s, according to the International Monetary Funds. Four months since the World Health Organisation declared Covid-19 a pandemic, governments are gradually relaxing restrictions and economies are opening up slowly.
The UAE has eased some of those restrictions and government employees started returning to work on May 31. Malls in the country have opened at reduced capacity.
Mr Alabbar expects the retail sector in Dubai, the tourism and business hub of the Middle East, to fully recover by the middle of 2021.
Dubai will rebound from the crisis in "better shape" than other cities across the world, thanks to the size of the commercial hub and its lack of dependence on oil, he told CNN after partial opening of the Dubai Mall on May 2.
Extensive testing and early lockdown measures, among other factors allowed the UAE to “gradually and safely ease restrictions,” he said.
The Dubai Mall has now re-opened along with many of its entertainment activities, it is important for Emaar to work closely with its partners to navigate through the months ahead, Mr Alabbar told the retail sector representatives during the conference call.
“We have been listening and learning from retailers, so we can continue to lead in the right way, as our partners,” he said.
“We will continue to do so, adapting our own business model so we can help overcome any obstacles and challenges that they still face.”
Mall operators including Emaar, who traditionally relied on customers’ foot fall to drive business, are now looking to digitise operations to adapt to the new environment and compete with e-commerce giants like Amazon. The pandemic has underscored the urgency for the transformation.
During the one-month closure of shopping malls between March 25 and April 25, some mall operators have helped stores migrate online. Emaar Malls, set up a virtual Dubai Mall on noon.com and Majid Al Futtaim rolled out an online marketplace through carrefouruae.com.
Dubai Future Foundation on Saturday also underlined the need for brick-and-mortar retailers to quickly adapt e-commerce in their business models.
The rising number of closures of brick-and-mortar retailers across the globe requires urgent action from “landlords and governments to provide a lifeline for struggling offline retailers”, a report on retail, from the foundation’s research arm said.
In the short term, the report urged banks to restructure maturing loans in the retail sector as needed and asked shopping mall operators to waive rents for their tenants during lockdown. Companies should also shuffle and re-skill workers to manage the surge in e-commerce demand.
In the long term, to encourage consumers to return to the malls, the report suggested introducing tax-free shopping, certifying malls as “Covid-19 free” by relevant authorities, and implementing touchless shopping experiences such as self-checkouts.