Euromonitor International is pleased to present an interview with Said Daher, CEO and Marwan Moukarzel, Deputy CEO of Azadea Group.
Azadea Group franchises over 55 well-known international brands such as Mango, Zara, Virgin Megastore, Promod and the more recent KIKO Milano. Company operates over 650 stores in 13 countries across Middle East and Africa region.
“Azadea continues to scout for unique lifestyle experiences to introduce to the region while strengthening its positioning. We also make sure we bring the latest trends and choose the most exciting brand offerings to answer changing market needs as much as possible. Brands such as Eataly, Lefties and KIKO Milano are great examples of concepts that cater to our mission of providing our customers and people with an entertaining and exciting way of life.” - Azadea Group
What does it take for international brands to be successful in the Middle East?
One of the critical success factors for international brands is to ensure they find the right franchise partners with capabilities to customize the brand and product offering for the region.
It is also important to note that the region is very well adapted to Western trends, as countries like the United Arab Emirates are very well aware of international trends. Therefore, it is essential to identify gaps and look at the key market factors before making the move. One has to ensure they know where they want to go and once there, then how to strategize expansion in order to not cannibalize themselves.
Azadea Group operates more than 55 leading international franchise brands in UAE and MEA region. With the retail landscape continuously expanding, what are the latest trends you see in 2016 and up until EXPO 2020?
The United Arab Emirates retail landscape is continuously evolving. Among the well-established regional malls of Dubai Mall and Mall of the Emirates we see the earlier malls of Bur Juman and Al Ghurair benefiting from restructuring themselves. Their demand as community malls have stepped up the game as more of these are appearing in the market. These give an easy and convenient experience to the customer because getting out of malls such as Dubai Mall and Mall of the Emirates, especially during the weekend might take a good 45 minutes giving great opportunity for footfall to drive sales in categories such as Apparel.
Do you see a growing popularity towards a certain category within the apparel and footwear when it comes to consumers' preferences?
Firstly, the population is very well adapted to the Western apparel trends which makes brands such as Mango, Promod and Zara very popular in the region. We as a franchiser provide a very good mix of apparel in this sense. Secondly, in this region, we also see that Childrenswear grows faster than in the West. Peak season of Eid also benefits this category. Thirdly, the trend of being more health conscious or activity driven has increased demand for sportswear or what we call Activewear which has picked up quite well in our stores of Mango and Oysho.
It is important to note that consumers look forward to experiencing different brands over here, as they are very well versed with global brands, and so are always open to exploring something new.
Within the Gulf Council Countries (GCC), we have high internet penetration and smartphone penetration which has given rise to the social media culture and has given rise to the grass root marketing technique of blogging. What impact do you see of this in the market?
Social media and blogging are an essential for brands, due to which we are also present through social media platforms such as Facebook and Instagram and time and again we are becoming active on them, especially for brands such as Old Navy and Bershka. Bloggers in countries such as United Arab Emirates and Kuwait have been proven to be a great marketing tool corporate especially through social media campaigns.
You mentioned that tourism is important in the United Arab Emirates. Another observation is the shift in tourist demographics. What impact do you see this bringing in?
The change in the tourism mix already has an impact on lot of industries including apparel retailing. I believe that the luxury market has felt this the most; we know that Russians are spending less while more spends are from other nationalities such as India and this might translate into more people becoming price sensitive and looking out for promotions and special offers.
With retail landscape expansion, a lot of brands such as Cath Kidston, Karl Lagerfeld and All Saints and the recently launched KIKO Milano have appeared in the market. How do you see the competitive landscape with all these launches now and in the near future?
The apparel market is not entirely saturated even with the high number of brands already in the market as there are still opportunities like those in community malls appearing in newer developed neighborhoods.
This is because Dubai has the tourists and the retail structure for growth along with the ever growing great vision. Whenever you think it is tough to get something better, you get something better here. But you have to be reasonable about growth and how you want to plan this growth so you do not cannibalize yourself. Remember, UAE is ranked first in the world in terms of international brand penetration and again with it the population is growing with which UAE will continue to surpass in the region.