Oct. 15, 2020
There is no doubt that, globally, retail is facing its hardest time yet. As COVID-19 has customers quarantined at home, major retailers and small businesses alike are facing closures on an unprecedented scale. Add this to the sector's competitor, e-commerce, which has only stood to gain in the past months as consumers use more and more online offerings to get their essential goods, retail's future is looking increasingly uncertain.
The situation may be even more dire for Oman, as its retail sector has seen an increase in mall construction in recent years, thanks to previous positive trends around the sector and its rising contribution to Oman's GDP. Though consumers in the GCC prefer in-person retail experiences to online shopping, e-commerce's impact has definitely been felt across the region, with companies like Souq becoming a household name throughout the GCC. However, for Oman, retail has mainly been seen as a way to increase revenue from tourism, which has experienced growth in recent years. By offering fantasy-like shopping experiences and entertainment venues, Oman hoped to use malls as tourists attractions in and of themselves. This is clearly seen with the Mall of Muscat, which offers an 8,000sqm aquarium, a snow park, and even go-kart tracks.
Oman's latest mall, expected to open door March 2021, is Majid Al Futtaim's Mall of Oman, which plans to offer 140,000sqm of retail space, a family entertainment center, a Carrefour hypermarket, and the country's largest indoor snow park. The mall is to be placed in close proximity to two other large malls, Grand Mall and Avenues Mall, both with similar offerings. Even in normal times, this proximity could offer a challenge through oversupply. But perhaps the mall market in Oman is demonstrative of something else happening in the Sultanate: diversification. With oil prices plummeting thanks to the downturn in global industries, Oman, like other countries in the region, must find a way to create value—and fast. But malls built for tourists and spendthrifts might not be the best way to do this at the moment.