Qatar: On Upward Growth Curve

Massive infrastructural developments on the back of the upcoming FIFA World Cup Qatar 2022TM a pick-up in economic activities, coupled with high hydrocarbon prices point toward an upward growth curve in Qatar. ALESSANDRO GAFFURI

Founder & CEO, CELS Group Board Member, MECS+R

The International Monetary Fund (IMF) estimates Qatar’s real GDP growth to reach 3.2% in 2022, underpinned by elevated hydrocarbon prices and recovery in the tourism sector. Improvement in consumer spending is visible too. According to Fitch Solutions, the real household spending growth in Qatar is set to touch 3.6% up from the estimated growth of 1.0% in 2021. Qatari households’ spending is expected to recover to pre-pandemic levels by 2023. All indications point towards an upward growth curve in Qatar. While the four-year blockade imposed on Qatar in 2017 caused an initial economic shock, the GCC country leveraged hydrocarbon resources and international ties to overcome the negative impact. Qatar’s non-reliance on tourism at that time [of blockade] could be seen as a boon too. That coupled with in-country spending on luxury goods by local Qataris [as they didn’t travel and shop in some of the neighbouring GCC countries, although they still shopped in fashion capitals such as London and Milan] offered a much-needed fillip to retail and shopping mall industries. Infrastructure development related to mega projects aligned with FIFA World Cup Qatar 2022™ including stadiums, hotels, malls, hospitals, roads, railways, an underground metro, a light rail line, and an airport extension – has continued at an unhindered pace. However, the pandemic has caused woes for the Qatari economy causing inflationary pressures.

The estimated growth forecasts point toward Qatar being at the crossroads of exciting developments having a clear spillover impact on the retail real estate industry. However, a look into the past is crucial to understanding the pace of change. When I first came to Qatar in 2013, there were only three-four traditional shopping centres and the Villaggio Mall was an early attempt to develop a “destination mall”. Then the mid-range Gulf Mall, Ezdan Mall and Tawar Mall, among others appeared. This was followed by the emergence of super-regional, premium malls including the Mall of Qatar, Doha Festival City, and Place Vendôme [opened its doors on April 15]. Within a decade, the Qatari shopping centre landscape transformed from being traditional and limited in GLA (gross leasable area) to becoming a new generation of super-regional malls. In fact, a cautious evaluation is perhaps necessary to avoid issues arising from an oversupply of leasable areas. Over the past decade, the pace of transformation in Qatar retail real estate industry has been breakneck. In the past couple of years, there has been an incredible shift in the retail and shopping centre landscape that paused briefly due to the COVID-19 pandemic.

Crafting Immersive Experiences in the Age of Hybrid

But infrastructural development alone isn’t enough. Developments must go hand-in-hand with innovation, with a clear goal to transform retail spaces into destinations. Gone are the days when shopping centres were spaces that met the necessities. In the current age of hybrid when almost everything can be purchased in a few clicks, what will drive people to the shopping centres is a key question! The answer lies in multiple clearly visible trends in the Qatari shopping centre landscape where F&B and entertainment are taking centre stage from being outliers and unique experiences are at the heart of successful destinations such as Mall of Qatar and Doha Festival City. A vision that we’ve been living and breathing at CELS Group by developing edutainment-based, highengagement activations to enliven spaces, making them social as opposed to transaction only. In the age of hybrid, digitalisation is here to stay. But it won’t replace human connections. Therein, even digital interactions must be two-way to delight customers. An area that we have pioneered in Qatar by deploying our highly interactive digital solutions used by the Qatar Tourism Authority for its ‘Spend & Win’ campaigns during the ‘Shop Qatar’ seasons. Such integrated communication and activation plans play a pivotal role in nurturing a strong relationship with existing customers while attracting a new base. Alongside digitalisation efforts, the tangible benefits of festive lights decorations on consumption patterns are clear, a phenomenon that’s driven by a sense of immersive engagement. Studies prove that bright decorations have a positive influence on customer mood and perception. Historically, when Christmas decorations go live in Europe in city centres, the level of consumption spikes in the shopping centres beginning in December. The reason why global retailer, IKEA, starts its Christmas decorations beginning of November or earlier to leverage holiday driven sales. Way back in 2014, we witnessed similar results from our immersive Ramadan decorations at the Katara Cultural Village. It pushed the boundaries of immersive experience and set the pace for what would follow in the shopping mall space. Within 12 months of that engagement, we signed up The Gate Mall, Landmark Mall, Lagoona Mall, Doha Corniche and the second year of engagement with Katara Cultural Village. Over the years, along with Ramadan and Eid even festive winter decorations have become integral to the success of the campaigns run by the shopping centres and retail brands in Qatar.

The Strategic FIFA World Cup™ Promise

Looking ahead, several developments will continue to positively reshape Qatar. For instance, the FIFA World Cup™ has, historically, been a driver of massive change. When the World Cup happened in Italy, we saw new developments through highways, train stations and more being built. Even the Winter Olympic Games in Turin and the 2010 Commonwealth Games in New Delhi have accelerated developments boosting economies from the time of award to delivering the event. It isn’t much different in the case of Qatar. However, the thought process that 30 days of the FIFA World Cup™ can drive an incredible increase in turnover or development is a myth. It’s a huge opportunity to place the country, Qatar, on the global map. The FIFA World Cup™ will also transform cultural perceptions about Qatar and its future based on developments that have happened over the past few years. The tourism impact from such global events will undeniably drive revenues, paving the path for future cultural, sports and art events, aligned with Qatar National Vision 2030.

Tips to keep brick-and-mortar relevant

Design brick-and-mortar spaces differently as experience centres. Create logistical hubs to support the experience centres by offering hyper-fast deliveries at preferred doorsteps. Harness the power of a relationship with visitors by becoming their favourite destination to socialise and shop. Curate various offerings ranging from theatres, F&B, and retail stores to fitness centres, co-working spaces, medical centres offering visitors everything under one roof. Create novelty through a constantly evolving exhibition & conference area adding uniqueness to the space.