DUBAI’S CLOTHING INDUSTRY RECORDS HIGH SALES REVENUE IN RAMADAN

Besides being spiritually very enlightening for Muslims around the world, Ramadan also brings a windfall for numerous retail businesses such as food, clothing and consumer durables. Not to mention tours, travel and hospitality sectors, as big volumes of individuals travel to celebrate the event with their family and friends.

After capturing the prevailing sentiments towards food retail during Ramadan in our previous report, the given report will be focused on understanding how the month further stimulates the retail sector, especially in the context of clothing sector in Dubai. During Ramadan, Muslims prefer buying a range of clothing, clothing accessories and footwear etc. Not to mention cosmetics, fashion accessories, jewellery, watches, perfumes and colognes.

In order to capture the consumers’ shopping trend this Ramada, a market survey has been conducted through the help of online survey of 360 Muslim individuals. The respondents were aged between 21-41, and had a monthly income ranging between AED 4,000 – 25,000 (USD 1100 to 6800). Besides, our team had one-to-one discussions with few retailers and respondents to further fine-tune the research findings.

Market Sentiments

Research indicates clearly that clothing is on the high list of many Muslims followed by cosmetics and clothing accessories. Besides there is also visible substantial interest towards jewellery, foot wears, watches, fashion accessories and perfume/cologne etc. Unsurprisingly, to capture the high voltage market sentiments, many retailers and brands came up with great discounts and offers. Likewise, many expatriates living in Dubai also visit their home countries to celebrate the occasion of Eid with their family and friends back home. This naturally stretches their purchasing bandwidth as they purchase clothing gear for personal consumption as well as for the purpose gifting it to others. Figure 1 below shows the percentage of respondents showing their interest in purchasing different items.

Figure 1: Shows the percentage of respondents showing their interest in purchasing different items

Some of our one-to-one discussions revealed that semi-formal, fashion and casual wear are sought after by the respondents. Besides other outfits such as formal and casual wear and abayas etc. are sought after. Among cosmetics, respondents indicated their interest in perfume/cologne as they find them easy for gifting purpose.

Purchasing Bandwidth

Based on the survey as well as discussions with some of the respondents, it was observed that there are multiple factors which limit or delimit the overall spending bandwidth of the residents. First and foremost, the income plays a substantial role in deciding how much an individual can really spend as depicted in Figure 2 below. Other factors such as personal taste and liabilities are also crucial components. In addition, the myriad discount offers circulating across the web and real world are also great catalyst in stimulating purchase.

Figure 2: Shows the percentage break down of expected expenses.

Discount Offers

As mentioned in the previous section, higher discounts mark the shopping euphoria prevalent in Dubai during the festive month of Ramadan. Many of the leading brands in coordination with shopping malls, hyper markets and specialty stores are offering discount options, which can range anything from 25 to 75 percent. In addition, there are also various “Buy 1 and Get 1 Free” and lucky draw options.

Research Findings

Our market research survey clearly indicates that Ramadan is associated with great euphoria among the Muslim populace in the city, which is translated into high sales of clothes, clothing accessories, jewellery, foot wear, watches and cosmetics etc. Our discussions with retailers indicate that sales during the month of Ramadan should be higher by anything between 150-250 percent compared to average sales in other months. Though the sentiment of the Non-Muslims have not been captured in the research, but discussions reveal that Non-Muslims, which constitute over quarter of the populace of the city, are also equally jubilant towards shopping out during the month. It could be attributed to these discounts offer integrated with the atmosphere of general festiveness in the city.

The Future of Retail in Dubai

In general, Dubai’s retail sector stays bullish throughout the year, thanks to the Emirate’s image as a “Shopping Paradise”, which helps it attract millions of local, regional and international tourists every year. Likewise, over 5 million square feet of retail space is expected to enter into the Dubai market by the year end, which once realized will enlarge the existing retail space of the Emirate by 22 percent. Many of the major malls in Dubai; Mall of the Emirates, Dubai Mall and Ibn Battuta Mall are undergoing expansion. Besides, various new malls, hyper markets and community centers have been declared recently which also include two large shopping mall projects by Nakheel measuring 1,000,000 and 500,000 square feet of space.

However, like Dubai, neighbouring Abu Dhabi is also ramping up its retail space, which is an integral part of its long term economic diversification policy. Capitalizing on its economical average retail rental prices, which are believed to be nearly one third less than Dubai, the capital city is working on various ambitious shopping mall projects such as  Yas Island Mall and Reef Mall, besides a range of community centers and hyper markets. Other Northern Emirates such as Sharjah and Ras Al Khaimah are also adding up new retail entities. In the near future this could have some downward pressure on the retail in Dubai, which hitherto has been successfully absorbing demand from other emirates. Nevertheless, the small downward pressure should be easily outmaneuvered by the anticipated doubling of the population and tourist intake in the coming time.

Research Konnection

Research Konnection is a Dubai based market research and feasibility study advisory. Brewing the over two decades of various business interest of its leadership in UAE, the key emphasis in Research Konnection is to give right information rather than good ones, that can help existing companies and international investors to take winning decisions. Besides Real estate, tourism and education, retail is one of the key sectors where the team has tremendous expertise and can play instrumental role in consulting and advising international and local business and investors to establish and expand respectively. For any further information feel free to drop us a mail at Waqas@researchkonnection.com.

Author: RKonnect
The author is the Managing Director of Research Konnection, a Dubai based market research and consulting firm that helps local and international companies to identify emerging business opportunities and successfully expand in the Gulf region. The author can be reached at waqas@researchkonnection.com
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