Retail development in Abu Dhabi is set to give the beauty market at boost.
With the retail market in Dubai saturated amid a general slowdown in the economy, beauty players in the United Arab Emirates are looking to developments in the capital, Abu Dhabi, for new opportunities.
The world’s eighth-largest producer of oil, the emirate of Abu Dhabi is home to some 2.7 million people, according government statistics. Of those, just 536,000 are UAE nationals and 1.83 million are men. Oil revenue has made Abu Dhabi the world’s richest city, with 75% of its households receiving income of $100,000 in 2013, according to Euromonitor International. The market-research group also reports that the Abu Dhabi is twice as expensive as the rest of the emirates in terms of consumer spending on housing and transport.
Recent years have seen the emirate invest heavily in infrastructure and look for ways to diversify its economy. In particular, a burgeoning retail scene has been supported by government initiatives to boost private investment, resulting in the city significantly ramping up its store offerings to capitalize on the growth potential of the hospitality and tourism sectors.
The opening of luxury mall The Galleria in 2013, located in the heart of the city on Al Maryah Island, is set to be followed by the completion of Al Maryah Central Mall slated for 2018. Other developments in the pipeline include Reem Mall, which will also open in 2018 and be located in the Reem Island residential community currently under development.
With some 400 stores, the Al Maryah Central Mall will welcome the UAE’s first Macy’s department store, which will anchor the mall alongside sister US department store Bloomingdale’s (both stores are operated under license in the UAE by Al Tayer Group). With half of the 1.5 million square feet of space in the mall already leased, beauty brands that have signed on include Kiehl’s Since 1851, Nars, Bobbi Brown, L’Occitane en Provence and Make Up For Ever. The mall will be located within Al Maryah Island’s new 15 million square-foot central business district, which will be connected to the mall and other features on the island by air conditioned walk ways.
Mall owner Gulf Related says the mall aims to capture 20% of retail spending in the UAE when it opens for business. “Abu Dhabi’s annual retail spend is projected to reach $12.18bn by the time Al Maryah Central opens in 2018 and this development is strategically located at the heart of this market,” Gulf Related president and ceo Ken Himmel said in a statement.
However, whereas Dubai relies heavily on tourists to boost its mall traffic, Gulf Related expects some 90% of Abu Dhabi consumers to be local residents. This alone could give some beauty players cause to pause, due to the high disproportion of men to women living in Abu Dhabi.
That said, a growing expatriate population with high incomes bode well for the overall growth potential of the city, which is also counting on developments like the opening of the Louvre Abu Dhabi next year and international events like the Abu Dhabi Formula 1 Grand Prix to draw in more tourists.