Dubai retail sales to boom in 2022 with residents, tourists expected to spend more – Reuters
Last year’s retail data from the third quarter of 2020 recorded an 8% increase in average per capita spending by tourists.
Dubai’s retail sector will continue to expand this year, with growth driven by Expo 2020 Dubai, increased resident spending and the success of the UAE’s Covid vaccination campaign.
In an exclusive article for Khaleej times, Ahmed Al Khaja, CEO of Dubai Festivals and Retail Establishment (DFRE), noted that the hybrid retail model is gaining traction in the UAE. Social commerce is the next frontier of growth for local and regional players, he added.
He pointed out that as Dubai is one of the top shopping destinations in the world, the vast shopping area of the emirate is fueled by the millions of visitors who travel to the emirate every year.
“Retail sales are expected to continue on a growth trajectory in 2022. With Expo 2020 Dubai opening to the world, backed by the UAE’s successful vaccination program, retail data from the last year of the third quarter of 2020 saw an 8% increase in average per capita spending by tourists while in Dubai,” said the CEO of DFRE.
Home to over 62% of the world’s leading retail brands, the emirate has successfully developed a thriving retail sector which, despite current global challenges, is a major contributor to the UAE, he said. added.
A recent report by the Dubai Chamber of Commerce and Industry predicts that retail sales in the UAE will reach $70.5 billion (259 billion dirhams) by 2025, a 6 year growth, 6%.
Al Khaja revealed that the measures taken to support Dubai’s retail sector – such as waivers on rents and the like – have played a vital role in safeguarding the industry from the impact of the pandemic.
“Malls in Dubai have always adapted to seamlessly integrate many different parts of lifestyle and entertainment outlets into their offering, as in Dubai, the UAE and the Gulf region within the meaning wide, malls are part of the social fabric, where people go not just to shop, but to socialize. Dubai’s malls are also major global tourist attractions, with major malls receiving over 80 million visitors per year,” Al Khaja added.
The DFRE chief executive stressed that social commerce will be the next frontier of growth for local retailers, who are already benefiting from the explosive growth of e-commerce in recent years, especially post-pandemic.
“Another key trend that is expected to see significant growth over the next two to five years is social commerce, where retailers use social media as mediums to promote and sell products and services. Interestingly, a recent report from Snap states that the “Snapchat generation” in the region alone is estimated to be worth $425 billion (Dh1.56 trillion) in spending power. Besides traditional e-commerce, this social commerce trend could unlock millions of additional dollars in new revenue,” Al Khaja said.
Hybrid retail model
Al Khaja revealed that the hybrid retail model is gaining momentum in the UAE and the region following the outbreak of the pandemic.
“As emerging, post-pandemic trends continue to reveal a need for innovation that matches changing consumer behaviors in the retail space, the hybrid retail model appears to have taken over. in terms of popularity with regional consumers,” he said.
Recent reports also indicate a marginal increase in the leisure and entertainment sector in Dubai between the second and third quarters of 2021, as consumer appetite for fun experiences increased and Dubai authorities continued to ensure malls were safe for everyone.
READ ALSO :
“As the world welcomes a new year, there is a great opportunity to further strengthen Dubai’s position as a global retail destination. This can be done by creating physical retail experiences that complement virtual experiences, together aiming to drive sustainable growth in the retail sector,” Al Khaja concluded.