The UAE was the second-most attractive market among emerging economies for clothing retailers last year.
The sector scored highly in the Apparel Index by the global management consulting firm AT Kearney.
The Emirates's success is highlighted by Dubai Outlet Mall, which positions itself as a value concept mall and houses mid to high-end stores such as Giordano, Burberry, Massimo Dutti and Mango.
Here, Vishal Mahajan, the director of Dubai Outlet Mall, developed by Al Ahli Holding Group in 2007, talks about challenges and opportunities for the retail sector and the outlet concept in Dubai.
What is driving the value apparel retail stores in Dubai?
Bargain shopping is very popular. Dubai is offering world-class stores and luxury brands in most of its retail destinations. We believe Dubai Outlet Mall complements other malls and does not compete with them. Everyone loves a bargain. We receive guests who stay in luxury hotels in the country coming and shopping in Dubai Outlet Mall. This shows value for money is always respected by everyone.
How much of your revenues come from clothing stores at the mall?
We are experiencing 20 per cent increase in revenue on year on year basis. On an average, 70 per cent revenue comes from apparel stores and the balance comes from the others.
Do you see tourism contributing to sales at the mall?
Tourism is a major role-player in the economy here. Our customers consist of more than 40 per cent tourists every year.
Of the 240 stores making up 1,200 brands, how much comes from apparel sales?
More than 75 per cent of sales consists of apparel. Among this, value apparel is a minority as everyone likes to buy big brands at a bargain.
What opportunities do you see for value apparel stores?
Malls and stores will have to continuously reinvent themselves to survive the competition. Quality cannot be ignored or compromised in the name of value.
What are the challenges for value clothing retail stores in the UAE?
The retail sector is almost saturated at present. There has to be a proper control towards the building of more malls. The coming years will define segmentation of the retail sector with convenience, experience, value and variety being the main focus points.