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The advent of e-commerce will undoubtedly disrupt the F&B sector in Abu Dhabi. Only those players who are fast to adapt and embrace digital sales channels will stand a chance of surviving in the long term.
While Abu Dhabi remains an attractive destination for retailers, accounting for 36% of all shopping malls in the UAE, local and international retailers operating in the Emirate cannot ignore the imminent advent of e-commerce, probably the most disruptive technological change of the past decade. Undoubtedly, those players who successfully embrace the e-trend and adjust their supply chains accordingly are the ones most likely to survive in the next five to 10 years. Industry experts from top consulting firms believe it is not a matter of competing but surviving. A first major signal to the market was given in spring 2017, when Amazon ensured the acquisition of Dubai-based online retailer Souq.com, valued at over USD1 billion. At the time, the F&B industry did not necessarily perceive the purchase as a threat, except for the fact that five months later Jeff Bezos announced the acquisition of Whole Foods, sparking a fierce competition with the industry.
Surely, e-commerce will not hit Abu Dhabi all of a sudden. After all, UAE residents are known to be avid mall shoppers, with 265,760sqm of retail space under construction in Abu Dhabi alone and an additional 650,000sqm, likely to be added by 2020, according to research firm CBRE.
Euromonitor International noted that the value of the UAE's retail sector stood at USD56.6 billion at the end of 2016, while the UAE's retail sales turnover is expected to exceed USD71 billion by 2021. However, at a time when consumer spending is going down, grocery spending in Abu Dhabi keeps growing. This is why F&B companies that traditionally rely on a B2B model, furnishing stores and retail outlets, may see e-commerce as an opportunity to grow their top-line swiftly and efficiently.
Market fragmentation will also represent an additional opportunity. Given the highly fragmented market, the top-five F&B retailers account for slightly more than 15% of the whole market share. While still dominated by Lulu, competition remains tight, with none of the other players—Carrefour, Spinneys, and others—having any intention of letting go of the local hypermarket giant.
For this reason, e-commerce offers an invaluable opportunity for the F&B industry. Frost & Sullivan, a consultancy, expects the UAE's e-commerce industry to be worth USD10 billion by 2020, despite reduced purchasing power. Surely, customers are becoming more and more price conscious, but they also want quality, which is why established, quality F&B manufacturers could exploit digital sale channels and take advantage of both the already existing Zoomato.com, Talabat, andTrolley.ae platforms, or they could establish their own distribution segments. Some companies may partner with the various Aramex, FedEx and UPS, others will maybe have an in-house logistic department. What matters in the end is consumer price and process transparent.
The untapped potential of e-commerce represents also an invaluable opportunity for foreign companies that yet have to step in the UAE. Indeed, only 25% of grocery offerings are produced domestically in Abu Dhabi, a number which could potentially spur the expansion of international players within the Emirate itself.
Aside from the usual emphasis on quality of services, e-commerce in Abu Dhabi will most likely value a “first-come, first-serve" approach. This is why there is reason to believe more established F&B powerhouses on average are likely to score higher on the IBM Artificial Intelligence Readiness Index, which will provide a first basis to assess how ready or not a certain firm is to integrate AI and digitize its operations, and on the degree of available cashflow to invest in the market. Despite the presence of some of the world's biggest and mix-used malls, Abu Dhabi's F&B sector is set to leapfrog with the most advanced markets in the e-commerce segment.
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TABLE OF CONTENTS
Focus: Tackling Unlawful Cryptocurrency Use
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Juan Carlos Varela, President, Republic of Panama
TBY talks to Juan Carlos Varela, President of the Republic of Panama, on expanding the country's diplomatic footprint, the importance of participating in Expo 2020, and both countries' respective leadership roles as regional entrepôts.
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Rashed A. Al Blooshi, Chief Executive, Abu Dhabi Securities Exchange (ADX)
TBY talks to Rashed A. Al Blooshi, Chief Executive of Abu Dhabi Securities Exchange (ADX), on highlighting the opportunities available to companies on ADX, adopting best practices in the field, and further developing the market.
read articleFocus: ADNOC’s Partnership Model
Spheres of Influence
Following the announcement of an expanded partnership model and a more active approach to managing its businesses and portfolio of assets, a series of cooperation accords position the national oil company as a champion of commercial liberalism.
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hmed Omar Abdulla, CEO, Abu Dhabi Polymer Company Ltd (Borouge),
TBY talks to Ahmed Omar Abdulla, CEO of Abu Dhabi Polymer Company Ltd (Borouge), on the impact of its new Borouge 4 plant, specialized solutions for global challenges, and the need to continue to invest in innovation.
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Philippe Peccard, President Middle East Engineering & Investment Projects, Linde Group
TBY talks to Philippe Peccard, President Middle East Engineering & Investment Projects of Linde Group, on being a key partner of its regional partners, developing the downstream value chain, and further enhancing operations with technology.
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The announcement of the In-Country-Value program is a significant step for ADNOC and Abu Dhabi in growing the local private sector. Vertically, it will develop the energy industry through a trickle-down effect; horizontally, it will affect other sectors through a multiplier effect in the long-term.
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Ali Vezvaei, Executive President & CEO, Bilfinger Middle East
TBY talks to Ali Vezvaei, Executive President & CEO of Bilfinger Middle East, on its keys areas of focus in the UAE, trends in the hydrocarbons sector, and the application of energy efficiency technologies to new sectors.
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Samia Bouazza, Managing Director , Multiply Marketing Consultancy
TBY talks to Samia Bouazza, Managing Director of Multiply Marketing Consultancy, on satisfying sophisticated consumers with high purchasing power, targeting different categories of the population, and thinking globally while acting locally.
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Yousuf Al Shaibani, Director General, Mohammed Bin Rashid Space Centre (MBRSC)
TBY talks to Yousuf Al Shaibani, Director General of the Mohammed Bin Rashid Space Centre (MBRSC), on the goals of the national space program, attracting youth to the program, and the significance of KhalifaSat.
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Abdulla Jassem bin Kalban, Managing Director & CEO , Emirates Global Aluminium (EGA)
TBY talks to Abdulla Jassem bin Kalban, Managing Director & CEO of Emirates Global Aluminium (EGA), on its expansion upstream, strategies to grow the sector, and sustainability initiatives.
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Sheikh Abdulla bin Mohammed Al Hamed, Chairman , Department of Health (DoH)
TBY talks to Sheikh Abdulla bin Mohammed Al Hamed, Chairman of the Department of Health (DoH), on facilitating investment for local and foreign investors and building and maintaining a sustainable workforce.
read articleFocus: Technical Training vs. Academic Teaching
Balanced Learnıng
Abu Dhabi's technical institutes are growing in popularity among young Emiratis; however, finding a balance with more traditional academic programs is paramount to ensure the development of a truly knowledge-based economy.
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Noura bint Mohammed Al Kaabi, Minister , Culture and Knowledge Development
TBY talks to Noura bint Mohammed Al Kaabi, Minister of Culture and Knowledge Development, on the Creative Industries Contributions Index, bridging the AI-culture divide, and adopting a systems leadership approach moving forward.
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Mohamed Khalifa Al Mubarak, Chairman , Department of Culture and Tourism (DCT)
TBY talks to Mohamed Khalifa Al Mubarak, Chairman of the Department of Culture and Tourism (DCT) Abu Dhabi, on the role of innovation, the late Sheikh Zayed's cultural vision, and strengthening cultural engagement among youth.
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Saif Saeed Ghobash, Undersecretary , Department of Culture and Tourism (DCT)
TBY talks to Saif Saeed Ghobash, Undersecretary of the Department of Culture and Tourism (DCT) Abu Dhabi, on becoming a beacon of cultural tourism, tailoring its approach to different markets, and penetrating the MICE segment.
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Humaid Matar Al Dhaheri, Group CEO , Abu Dhabi National Exhibitions Company (ADNEC),
TBY talks to Humaid Matar Al Dhaheri, Group CEO of Abu Dhabi National Exhibitions Company (ADNEC), on fast-tracking Abu Dhabi's economic diversification, the importance of the Year of Zayed, and technology's impact on the world of event planning.
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Dr. Thani bin Ahmed Al Zeyoudi, UAE Minister , Climate Change and Environment
TBY talks to Dr. Thani bin Ahmed Al Zeyoudi, UAE Minister of Climate Change and Environment, on the UAE's commitment to reducing its ecological footprint, transitioning to a climate-resilient green economy, and the importance of sustainable green finance.
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Neri Askland, Vice President , Middle East and UAE Country Manager of Statoil
TBY talks to Neri Askland, Vice President of Middle East and UAE Country Manager of Statoil, on its efforts to help reduce its carbon footprint, opportunities for R&D in the area, and its collaboration with Masdar.
read articleFocus: Nuclear Energy
The Nuclear Option
The UAE is the first country in the MENA region to develop nuclear power, with Abu Dhabi's Barakah nuclear power plant. The Emirate hopes to achieve energy security and embrace alternative sources of energy, ensuring full cooperation and support from the international community.
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Christer Viktorsson, Director General , Federal Authority for Nuclear Regulation (FANR)
TBY talks to Christer Viktorsson, Director General of Federal Authority for Nuclear Regulation (FANR), on the role of the institution in advancing the nuclear energy regulatory environment, the Barakah Power Plant, and the importance of an integrated network.
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Eng. Omar Husain Al Hashmi, Acting Managing Director , Abu Dhabi Sewerage Services Company (ADSSC),
TBY talks to Eng. Omar Husain Al Hashmi, Acting Managing Director of Abu Dhabi Sewerage Services Company (ADSSC), on its successes with STEP, helping Abu Dhabi to reduce its carbon footprint, and its successful Emiratization policies.
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Saeed Al Bahri Salem Al Ameri, Director General , Abu Dhabi Food Control Authority (ADFCA)
TBY talks to Saeed Al Bahri Salem Al Ameri, Director General of Abu Dhabi Food Control Authority (ADFCA), on the Farmers Income Support Program, the UAE's agroecological climate, and introducing intelligent control systems.
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Falah Al Ahbabi, Chairman, Department of Urban Planning and Municipalities (DPM)
TBY talks to Falah Al Ahbabi, Chairman of Department of Urban Planning and Municipalities (DPM), on coordinating joint-investment programs and strategic alliances with the private sector and integrating technology within developments and services.
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Mohammed Ahmed Bin Abdulaziz Al-Shehhi, Undersecretary of Economic Affairs, the Ministry of Economy
Mohammed Ahmed Bin Abdulaziz Al-Shehhi, Undersecretary of Economic Affairs of the Ministry of Economy, on efforts to enhance the UAE's intellectual property framework, creating a knowledge-based economy, and fostering a culture of innovation.
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Khalifa Al Mubarak, Group Chief Executive Officer & Managing Director, Mubadala Investment Company
TBY talks to Khaldoon Khalifa Al Mubarak, Group Chief Executive Officer & Managing Director of Mubadala Investment Company, on the company's diversification strategy, its technology investments, and its focus on innovation.
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Desert Breeze
Abu Dhabi unveiled the new stimulus package, Ghadan 21, in effort to counter the post-oil crisis slowdown. While it might be too soon to call for the end of austerity measures, it definitely signifies the leadership's commitment to grow the Emirate's economy.
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Rashed Lahej Al Mansoori, Chairman, Statistics Centre- Abu Dhabi (SCAD)
TBY talks to Rashed Lahej Al Mansoori, Chairman of Statistics Centre-Abu Dhabi (SCAD), on its efforts to improve data collection and lower costs, innovative statistical development tools, and its Emiratization policies.
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Saeed Al Neyad, Director General, Abu Dhabi Monitoring and Control Centre (ADMCC)
TBY talks to Saeed Al Neyadi, Director General of Abu Dhabi Monitoring and Control Centre (ADMCC), on being a critical enabler for various key partner organizations, efforts to increase Abu Dhabi's competitiveness in tourism and commerce, and improving the quality of life for citizens and visitors.
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Nick Cochrane-Dyet, Chairman, British Business Group (BBG)
TBY talks to Nick Cochrane-Dyet, Chairman of British Business Group (BBG), on Abu Dhabi's forward-looking strategy, the need for British firms to continue to bring value to the Emirate, and areas of opportunity for the UK.
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