Majid Al Futtaim Holding CEO Alain Bejjani said that he believes there is still strong demand in the retail sector
Geopolitical factors in the region have had a detrimental impact on consumer confidence in the Middle East, according to Alain Bejjani, CEO of Majid Al Futtaim Holding.
“Consumer confidence has been impacted negatively in the past three to four years and I think currently the regional instability, the volatility globally, the trade wars and so on are taking a toll on consumer sentiment,” Bejjani said in an interview with CNN Business.
However, Bejjani noted that 50 percent of the region’s population is under the age of 25, with high internet penetration compared to the rest of the world.
“That being said we will have to overcome a negative consumer sentiment in the region,” he said. “We hope that in the coming year, we will see more clarity, and the current tensions between Iran and the rest of the world will actually come to some kind of solution.”
Additionally, Bejjani said that demand in the Middle East continues to be driven by domestic demand, rather than tourism.
“When you look at the region, most of it is domestic-driven, and our business across the 15 countries, our brand is primarily there to cater for the local customers,” he said.
“That being said, markets like Dubai and the UAE primarily have a big tourism impact, but it does not exceed 15 to 20 percent depending on the locations.”
Bejjani said that he doesn’t believe that Forever 21’s bankruptcy is systematic of wider challenges in the retail industry.
“This is not the first time we have a global retailer that goes into this situation. But in reality, the retail sector is going to grow to $308 billion between now and 2023. So, there is still a lot of demand,” he said. “But this demand has to be underlined by a very strong customer experience - and of course, a great online experience as well.”