Organisations that operate in today’s rapidly evolving landscape face diverse challenges, particularly in the business-to-consumer realm. Disruptive technologies such as artificial intelligence, autonomous vehicles, robotics and the Internet of Things are revolutionising the way businesses craft customer experiences.
At the same time, the lines between online and offline customer experience have blurred and disruptive business models have transformed how businesses operate. Against this volatile backdrop, partnerships as enablers of disruption are quickly gaining momentum globally.
Partnership disruption can be achieved through three models: partnering with established industry players, with disruptive businesses and with disruptive technology providers. While change can be driven by each of these models, businesses that will tap into all levels of partnership will be successful in keeping up with the fast pace at which the world is moving.
Forming traditional partnerships between established companies is often the most conservative route to disruption. These models are built on harnessing synergies to reinvent existing products and services as well as creating new appealing propositions. Macy’s partnership with Google provides a good example of such a partnership.
The department store chain recognised that finding the right products quickly and easily, can often be a challenge. In response to this, Macy’s paired with Google in 2014 to link to the latter’s proximity marketing platform which enables customers to search for specific items through their smartphones and locate the products at the nearest store. This facility proved particularly valuable to Macy’s customers during the busy holiday season.
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Pharmacy store chain Walgreen’s partnership with tech start-up Pager, agreed in 2015, operates in a similar manner, as it allows customers to find healthcare service providers and obtain treatment for common illnesses. The service does this through its mobile platform, which matches patients’ ailments and locations with doctors and nurses in the same areas.
Majid Al Futtaim’s partnership with restaurateur Gary Rhodes to create ThEATre by Rhodes is an example of two established industry players coming together to create a new offering. The unique, experience-driven cinema dining concept is considered the first of its kind in the Middle East.
The second partnership model unites established industry players with disruptive businesses and is growing in popularity globally. Organisations taking this route can leverage the agility and innovative operating models of smaller companies to disrupt their existing products and services, enhance customer experiences and grow into new business areas. For the disruptors, partnering with established organisations offers scale and industry expertise.
The near century old Walt Disney Company, for instance, partnered with robotics start-up Sphero to create an app-controlled toy version of the Star Wars droid character “BB-8”. The partnership, which was forged following Sphero’s participation in the Disney Accelerator program, resulted in the creation of the world’s most popular selling toy of 2015.
Similarly, Majid Al Futtaim’s partnership with courier start-up Fetchr is yet another example of how pairing with disruptors can create great value for businesses and their customers. Through the partnership, we introduced a unique “hands-free” shopping service in the UAE, enabling customers to arrange delivery of their shopping items easily and conveniently through an app. Our collaboration with application-based car booking service Careem is another example, giving customers access to an effortless, convenient journey to our destinations.
At the other end of the spectrum, partnerships with disruptive technology providers are helping to revolutionise industries internationally and in some instances, create entirely new markets. The video gaming industry is a good example of this. Last year, Sony introduced PlayStation VR, which uses virtual reality to transform the way people play video games, providing an immersive experience.
Another example closer to home, is the agreement signed in February between Dubai’s RTA and Tesla to introduce 200 cars equipped with autonomous driving technology to the city’s transportation system. The deal, which falls under the Dubai Smart Autonomous Mobility Strategy, will enable the RTA to transform up to 25 per cent of taxi rides in the city into autonomous journeys by 2030.
The power of partnerships in driving innovation and enhancing customer experiences is undeniable. However, disruption need not be driven solely by technology. Partnerships that result in elevated customer experiences through dynamism and innovation can be just as powerful as those driven by disruptive technology. Industry players that embrace the trend early on, will succeed in staying ahead of the curve. However, this can only be achieved within a flexible and dynamic operating environment that encourages experimentation and empowers its employees.
Vino El Khatib is Chief Marketing and Brand Officer at Majid Al Futtaim Holding
In numbers: China in Dubai
The number of Chinese people living in Dubai: An estimated 200,000
Number of Chinese people in International City: Almost 50,000
Daily visitors to Dragon Mart in 2018/19: 120,000
Daily visitors to Dragon Mart in 2010: 20,000
Percentage increase in visitors in eight years: 500 per cent
How it works
A $10 hand-powered LED light and battery bank
Device is operated by hand cranking it at any time during the day or night
The charge is stored inside a battery
The ratio is that for every minute you crank, it provides 10 minutes light on the brightest mode
A full hand wound charge is of 16.5minutes
This gives 1.1 hours of light on high mode or 2.5 hours of light on low mode
When more light is needed, it can be recharged by winding again
The larger version costs between $18-20 and generates more than 15 hours of light with a 45-minute charge
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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Nepotism is the name of the game
Salman Khan’s father, Salim Khan, is one of Bollywood’s most legendary screenwriters. Through his partnership with co-writer Javed Akhtar, Salim is credited with having paved the path for the Indian film industry’s blockbuster format in the 1970s. Something his son now rules the roost of. More importantly, the Salim-Javed duo also created the persona of the “angry young man” for Bollywood megastar Amitabh Bachchan in the 1970s, reflecting the angst of the average Indian. In choosing to be the ordinary man’s “hero” as opposed to a thespian in new Bollywood, Salman Khan remains tightly linked to his father’s oeuvre. Thanks dad.
