More than 1,000 companies from 96 countries play a pivotal role in Jebel Ali Freezone’s (Jafza) Retail and General Trading sector, with the free zone’s unparalleled infrastructure making it the ideal location for companies to set up and operate. These companies come from all over the world to take advantage of Jafza’s unique trade network, which both reduces cost and enables new opportunities for growth.
Approximately 39% of these companies derive from the Middle East, 30% from Asia, 15% from Europe, 9% from North America and 7% from Africa. In total, they employ more than 10,000 personnel and operate across combined facilities that touch two million square metres. The key trade import partners of Jafza are China, India, USA, Bangladesh and Vietnam, while the key exports partners are Saudi Arabia, India, Oman, Kuwait and the Philippines. The UAE remains the most attractive market in the region for retailers and general traders. This is underlined by the number of famous brands located in Jafza: Swarovski, Puma Middle East, Alshaya Group, Apparel, Landmark Group and LuLu Group International being excellent cases-in-point.
Big Numbers, Great Looks
A leading retail and hospitality conglomerate, Landmark Group has opened its mega distribution centre at Jafza at a total cost of AED1 billion. The facility can process 300 million units per year and can handle pallets, cartons, pieces and garments-on-hanger (GOH). It has a storage capacity of up to 2.2 million cartons and 2 million GOH. The centre is equipped with 10 automated and three manual docks to receive over 74,000 cartons per day.
The outbound of the facility features 36 docks, of which 10 are solely for GOH, and can handle up to 90,000 cartons and 250,000 GOH every day. Sometimes it’s not just about the ‘numbers’ either, with Swarovski, globally-renowned as makers of the finest crystal, having the facade of its regional facility in Jafza festooned with Swarovski crystals in the elevations. It is undoubtedly one of the standout buildings in the free zone.
One of the World’s Top Shopping Destinations
The nationwide lockdown to stem the spread of Covid-19 is having a significant effect on the retail industry. Analysts claim that the current pandemic, unlike the recent financial crisis, will present a set of multi-fold and enduring challenges such as we have never seen before. That said, thanks to the actions taken to limit the spread of Covid-19, new infections will continue to drop and life will slowly return to some semblance of normality. When it does, Dubai will still hold its position as one of the world’s top shopping destinations. Moreover, the interplay between the emirate’s retail, real estate, travel and tourism markets will continue to strengthen the emirate’s value proposition for consumers and investors.
In addition to high per capita income, strong international brand presence and a consumer base that likes to spend on retail, food and beverage, and leisure activities will also encourage growth.
The World’s Most Visited Lifestyle Destination
The new malls and shopping areas coming on stream, such as Meydan One and Dubai Hills, are expected to exert extra pressure on performance metrics, adding a further 1.1 million square metres of space. The Dubai Mall and Mall of the Emirates continued to be the biggest draw for tourists in 2019, together capturing 51% of total tourist retail demand. One of the largest shopping malls in the UAE, operated by Emaar Malls and Al Futtaim Properties, Dubai Mall witnessed a steady increase in the number of visitors throughout 2019, which can be partly attributed to the expansion of retail space, entertainment, and food and beverage offerings. In fact, Emaar Malls recorded a 5% increase in revenue to AED4.673 billion in 2019, with overall net profit for the year being AED2.286 billion, up 2.5% from 2018. This year is a different story though. The Covid-19 virus spreading across the world is a unique threat in that it affects both demand and supply.
In retail, supply chains have been seriously distrupted, while on the demand side, with people unable to travel and congregate, shopping malls are being badly hit.
It might be a while before consumers’ renew their desire to be in large crowds for anything except very pressing reasons, but they will ultimately return and Dubai is better placed that most to bounce back.
An Affluent Population
Dubai as an attractive market opportunity has risen significantly in recent years through a combination of factors. The most important is doubtless the demographic configuration, featuring a young population. Many of these younger consumers are prosperous professionals, and this presents an enormous up-and-coming market for the next two decades. Social media and peer-to-peer reviews powerfully influence the younger demographic, and the power of platforms such as Instagram to propagate what popular celebrities are enjoying or wearing has a real impact on buying trends.
Over the last decade, the UAE has witnessed and contributed to an exponential boom in the number of start-ups, not least in the field of retail. The first port of call for many of these is to leverage e-commerce platforms in order to sell their products and services, creating a perfect environment for e-commerce to thrive. The UAE is one of the world’s fastest- growing e-commerce markets and with the success of Souq.com and motivated entrepreneurs, such as Mouchawar, many others are encouraged to use the tools and systems available to pursue and bring to fruition their dreams. As a result, the e-commerce sector in the UAE is all set to record a strong performance over the next few years, driven by an ever- growing number of online shoppers, who are confident about making multiple purchases online. The UAE’s e-commerce market is estimated to be worth $27.1 billion in 2022.
The UAE is also seeing a brisk increase in the use of e-commerce service providers such as ride aggregators, who have delivered growth of 12%, while food delivery services have seen a rise of more than 100%. Jafza is one of the world’s finest locations for companies to establish their businesses and watch them grow. Everything has been designed in order to create a unique community focused on the needs of manufacturing and trading companies. Moreover, with a history of success and a customer- centric operating environment, Jafza has been able to continue to support its many retail and general trade clients during this time of unprecedented challenge; taking action to ensure that companies receive the services they require to get through the Covid-19 crisis, allowing them to maintain operations and normalcy for their own customers.