With mega malls emerging left right and center across Dubai - and with even more in the offing - is the city's small mall sector threatened?

Dubai, 18th July 2006: Of the 35 members of Dubai Shopping Malls Group (DSMG) - the industry body of malls in Dubai - the majority are malls that have less than 250,000 square feet lease-able area, making them apparently insignificant operators in a competitive climate that boasts such giants as BurJuman, Mall of the Emirates and Ibn Batuta. Is size an important component of a mall's success, or are Dubai's small malls effectively meeting the challenges posed by bigger competitors? And with even more mega-mall competition on the horizon, are the days of small malls numbered? To look for answers, we spoke to some people in the industry.

Eisa Adam Ibrahim, President of DSMG, who is also General Manager of the highly successful fashion-focused BurJuman, is of the opinion that smaller malls fulfill a function that is totally different from that of the bigger malls. "We know for a fact that shoppers go to different malls for different needs. A BurJuman visitor may come here for a designer shoe, while the same person will go to the close by Al Ain Center to buy a mobile phone and to Carrefour at Century Mall to buy groceries. Are we as BurJuman taking business away from the smaller malls? I don't think so."

Cannibalisation of business by bigger or newer malls is a theory that is also vehemently rejected by Saeed Al Nabouda, CEO of the DSF/DSS. "Malls, whether big or small, do well because they offer shoppers something unique that no one else does," says Saeed. "Whether it is proximity, focus towards a particular demographic segment, unique positioning and services, or a cluster of retailers meeting a certain need. Size has little to do with this - any mall or retail space that can differentiate will flourish, and those that don't will perish. Shoppers are no longer happy with just a cluster of shops - they want more than that."

There are several examples amongst Dubai's shopping malls to support these views. Al Ain Center, cited above, has become the hub of IT related retailers, all under one roof, with Al Khaleej Centre, which is just across the street also hosting "Techno City," a cluster of over 40 electronics and IT retailers and service providers. Both are small malls who have used their location - proximity to Khalid Bin Walid Street (better known as computer street) - to offer an option to IT retailers to operate from a mall environment, instead of the high street.

In a poll conducted by DSMG recently with the 20 odd small malls participating in DSMG's Dhs 5 million promotion, mall managers uniformly replied that the smaller size of their malls was an advantage, given the locality they were based in and their customer focus. Mohammed Shabbar of Al Manal Centre, which is located in Old Dubai's souk area of Naif Road says that the mall which has been in existence since 1992 has become a part of the local community yet it also attracts UAE and GCC nationals in droves - in spite of the parking nightmares of the locality primarily due to their mix of stores that cater to women, including a number of bridal focused retailers. "We have consciously created this mix of offerings to optimise footfalls," he says.

Another small mall that is attracting women - although from a totally different segment of the population - is Karama Centre. Focusing on retailers catering to Indian - particularly South Indian - tastes, Karama Centre hosts apparel and jewellery stores, a south Indian restaurant and an Ayurvedic massage and therapy center as well. "We could do with a good food court to add to our attractions, but over-all, I would say that our retailers enjoy good visitor footfalls throughout the week," says Arshad, Property Administrator of Karama Centre.

So is the future of smaller malls in Dubai's highly competitive environment secure? "If they can innovate, focus on their USP's, and offer the right outlets with the right products in the right locality, there is no reason why small malls too cannot thrive in this shoppers' paradise," says DSMG's Eisa Adam.

-Ends-

© Press Release 2006