The UAE remains the most attractive retail market in the Middle East, according to a new study by AT Kearney.
The latest edition of its Global Retail Development Index - ranks the top 30 developing countries for retail investment worldwide - placed the UAE fifth.
Only India, China, Malaysia and Turkey outscored the UAE as the country's retail sector rose two places compared to last year's study.
"The UAE remains the most attractive market in the region with strong growth opportunities beyond Dubai," the report said.
"It still offers an attractive retail proposition even though growth has slowed down. Innovation was the main theme for the UAE last year – strip malls, unique format, entertainment centers, outdoor cinemas, all aiming to spark and sustain consumer interest," it added.
AT Kearney also noted that e-commerce has grown at about 30 percent in the past few years and the recent developments - Amazon's purchase of Souq.com and the launch of Noon.com - prove the strong growth trajectory of e-commerce.
Saudi Arabia, the other major retail market in the region, ranked 11th. Despite the challenging economic situation in the country, the retail sector was quite resilient and grew by 4.6 percent on 2016.
The report said: "The sector is one where the government aims to create a lot of new Saudi jobs and is focusing on growing modern formats and e-commerce. Recent regulatory changes, such as allowing 100 percent foreign ownership in retail and increased financing to small retail enterprises, will strengthen the further development of the sector."
The 2017 GRDI, titled “The Age of Focus,” ranks India as the top developing country for retail investment. It said India’s strong GDP growth and growing middle class coupled with a more favourable regulatory environment over the past few years have played significant roles in attaining this ranking.
China enters the ranking at a second place despite its slower overall economic growth. The market’s size and the continued evolution of retail still make China one of the most attractive markets for retail investment.
Yana Petrova, co-author of the study, AT Kearney said: "This year's study finds global retailers faced with intensifying competition from local and regional retailers that have grown increasingly more sophisticated. Advancements in retail technology and e-commerce, requires retailers across the world to stop up and rethink their strategies.”For all the latest retail news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.