Surviving lean times on the dragon's back

Dubai's Dragon Mart is a vast complex of shops, but vendors say times are tough as consumers hold back.

Vendors at the Dragon Mart, a complex of shops, restaurants and warehouse units devoted to goods from China, assess the tough business climate. The shop assistant Yang Jingjing plays on her laptop computer surrounded by dozens of oil paintings stacked on the floor and hanging on the walls around her. One picture shows an evening scene in Paris, the street lights picking out the pedestrians as they hustle along the pavement, while another is of the sun shining on a pretty stretch of the Italian coast. Others depict mountainous landscapes and shimmering lakes.

The scenes may be European, but these oil paintings were not crafted in the backstreet art studios of Paris or Florence. They were made in Fujian province in south-east China, and the prices are much lower as a result. Perhaps they are slightly lower than this store in Dubai's Dragon Mart would like them to be. With customers hard to find, up to 40 per cent has already been knocked off the average asking price.

"Before, it was Dh2,000 [US$545], now it's Dh1,200," said Ms Yang, pointing at a large painting of a Mediterranean scene behind her. "Now it's cost price. Paintings now have no profit." To drum up interest from reluctant buyers, frames are now sometimes given away with the paintings. Ms Yang's difficulties are not unusual in this vast retail and wholesale shopping mall next to the Dubai-to-Hatta Road, which contains nearly 4,000 stores selling only Chinese goods.

Qian Liu from the South East Garment Co store in Dragon Mart, said she too had seen business slump in the past year. "Before, we had a lot of wholesale, now it's a little," she said. "At most shops, business is down." Traders in Dragon Mart, opened by Nakheel in 2004, are still suffering the fallout of Dubai's economic downturn, even if China's exports as a whole are now starting to grow after more than a year of decline. Last month, they increased 17.7 per cent to $130.7 billion, the first rise in 13 months.

The world's most populous nation has just overtaken Germany to become the world's biggest exporter by value. Chinese exports from January to November were worth a total of $1.07 trillion, compared with Germany's total of $1.05tn for the same period. According to Lee Wang, the store manager for Dragon Mart's Snow White Princess Trading, the retail sector has not been hit as badly as some industries. Mr Wang said trade at his wallpaper store had dropped between 20 and 30 per cent, while business at the property company he runs in Deira had fallen twice as much.

"There is not too much economic recession. There is not too much of an effect at Dragon Mart," he said. "The property and the real estate, maybe [for them] the effect is big." Mr Lee, who also uses the Arabic name Masood and the English name Tony, expects a steady recovery in retail sales, although he does not believe they will quickly return to the levels of three or four years ago. In 2007, the UAE imported Dh46.3bn worth of Chinese goods, making the Emirates China's largest export market in the Gulf.

"Chinese products now are good," he said. "Maybe 10 years ago, the quality and the level was not that good, but now everything becomes good." It is perhaps that growing reputation that has ensured Dragon Mart has not become a ghost town, even if some say it is quieter than before. Even during the week there is a brisk flow of customers through its seemingly endless no-frills boulevards, keen to check out shops selling everything from underwear to anti-hair-loss shampoo, from children's toys to kitchen goods.

In particular, the centre continues to attract Arabs from neighbouring GCC countries. Men in Omani embroidered caps, or kumma, are a common sight, while Saudi vehicles can easily be spotted in the car parks that sit beside the giant mall. Emiratis also flock to Dragon Mart, which in customer profile has a noticeably more Arab slant than most of Dubai's shopping malls. Among the customers recently was Abdulla al Kaddeed, 30, an Emirati government employee from Sharjah who was shopping with his friend Khaled for office furniture.

"Before, when you saw a brand made in China, you thought it was bad quality," he said. "Now we trust these items coming from China, but everybody should ask about the cost and quality, because they have two or three levels of quality." While several of the stores may have seen a downturn in their fortunes, there are few empty units, and the tradesmen and women insist they are not throwing in the towel.

Ms Qian, from South East Garment, said there was little point in going back to China, where she described business as "so-so". "All of the world is like this," she said. "If you go to another country, it's also like this, so we can stay here. "We have been here so many years, if you go back to China you need to start a new life. We're just waiting for it to get better. We trust it will be better here, so we stay."

Others are looking to realign their businesses to areas they believe will prove more profitable. Yang Jingjing, for example, said the shop she works in could move away from selling paintings and stock jewellery instead. Meanwhile, Dandan Qin, who uses the English name Danny in the UAE, is looking to set up his own business after his contract working as a salesman for a clothing company came to an end after four years.

After moving to the country barely speaking any English, he is now almost fluent and is keen to make use of the contacts and skills he has developed here. "I think it's OK," he said. "In Dubai there are rich people. Here you can make a business." @Email:[e-mail]