Gulf Business August 2021

UAE REAL ESTATE: SPECIAL REPORT WITH PROPERTY FINDER

2 5

Y E A R S

1 9 9 6 – 2 0 2 1

gulfbusiness.com / A U G U S T 2 0 2 1

Dubai businessman Dariush Soudi on why he is confident about future success

A GLADIATOR’S STAND

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Education focus: Deep dive into the future of learning

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Where is the UAE’s insurance industry headed?

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Gulf Business

CONTENTS / AUGUST 2021

07

The Brief An insight into the news and trends shaping the region with perceptive commentary and analysis

28

Outside classrooms Have ways of teaching and learning changed for the longer-term?

43

Special focus: Real estate

22

Property Finder report on the latest trends in Dubai’s real estate sector

Dubai businessman Dariush Soudi reveals his rags to riches story and what he plans next

gulfbusiness.com

Exclusive: Journey to the top

August 2021

3

Exclusive paintings, sculptures and photography from award-winning international artists.

Painting by Faisal Abdulqader

Painting by Liz Ramos

Photograph by Joachim Guay

The 50th Anniversary Arabian Falcon Navigator

By David Galbraith

CONTENTS / AUGUST 2021

59

Lifestyle

IWC CEO talks time p.60

Review: Waldorf RAK p.64

The new Hermès H24 p.66

“Today is a moment of hope. Yes, it is very different from what all of us had imagined. But let us cherish this moment” –Thomas Bach, president of the IOC at the start of the 2020 Tokyo Olympic Games

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The SME Story Interviews with entrepreneurs and insights from experts on how the regional SME ecosystem is evolving

Editor-in-chief Obaid Humaid Al Tayer Managing partner and group editor Ian Fairservice Group director Andrew Wingrove andrew.wingrove@motivate.ae Editor Aarti Nagraj aartin@motivate.ae aartinagraj Deputy editor Varun Godinho varun.godinho@motivate.ae varungodinho Tech editor Divsha Bhat bhat@motivate.ae Contributor Zainab Mansoor editorial.freelancer@motivate.ae zzainabmansoor Senior art director Olga Petroff olga.petroff@motivate.ae Art director Ángel Monroy Photographer Joachim Guay

General manager – production S Sunil Kumar Assistant production manager Binu Purandaran Production supervisor Venita Pinto Chief commercial officer Anthony Milne anthony@motivate.ae Group sales manager Manish Chopra manish.chopra@motivate.ae Senior advertising manager Ravi Dutt ravi.dutt@motivate.ae Group marketing manager Joelle AlBeaino joelle.albeaino@motivate.ae Group marketing manager Dominic Clerici dominic.clerici@motivate.ae

Cover: Charlie Banalo

Vol. 26. Issue 3. August 2021 Printed by Emirates Printing Press, Dubai

Follow us on social media: Linkedin: Gulf Business; Facebook: GulfBusiness; Twitter: @GulfBusiness; Instagram: @GulfBusiness

HEAD OFFICE: Media One Tower, Dubai Media City, PO Box 2331, Dubai, UAE, Tel: +971 4 427 3000, Fax: +971 4 428 2260, motivate@motivate.ae DUBAI MEDIA CITY: SD 2-94, 2nd Floor, Building 2, Dubai, UAE, Tel: +971 4 390 3550, Fax: +971 4 390 4845 ABU DHABI: PO Box 43072, UAE, Tel: +971 2 677 2005, Fax: +971 2 677 0124, motivate-adh@motivate.ae LONDON: Acre House, 11/15 William Road, London NW1 3ER, UK, motivateuk@motivate.ae

gulfbusiness.com

August 2021

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THE PHENOMENAL STORY OF AN INDIAN BUSINESS MAGNATE IN DUBAI A MUST-READ FOR BUDDING ENTREPRENEURS AND BUSINESS LEADERS.

th 4 Edition

Taking the

HighRoad T H E 4 T H E D I T I O N I S N OW AVA I L A B L E AT A L L L E A D I N G B O O K S H O P S A N D AT B O O K S A R A B I A .CO M MOTIVATEBOOKS

MOTIVATE_BOOKS

MOTIVATEBOOKS

Costly living

8 9 11 12 15

47.08% 43.73%

3 Qatar

38.20%

5 Kuwait

37.22%

6 Ireland

37.03%

7 United States

AUG

21

39.85%

4 United Arab Emirates

35.14%

8 Bahrain

33.30%

9 Australia

33.12%

10 New Zealand 0%

20%

40%

Rent as % of total monthly spending SOURCE: MONEY.CO.UK

ILLUSTRATION: GETTY IMAGES/NESLIHAN GORUCU

Startups Insurance Finance Events Social

50.25%

1 Hong Kong 2 Singapore

Rank

The Brief

Top 10 countries spending the highest percentage of outgoings on rent

Looking to the sun Bigger factories, the use of automation and more efficient production methods are brightening the prospects for the solar sector p. 13 gulfbusiness.com

August 2021

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The Brief / Startups A N A LY S I S

At your doorstep ILLUSTRATION: GETTY IMAGES/ELENABS

The appetite for dark kitchen concepts has grown significantly in the UAE, writes Zainab Mansoor

T

he pandemic dramatically altered the growth pace of the food delivery ecosystem. As people were either prevented from – or avoided – dining at their favourite restaurants, a number of operators doubled down on efforts to find a path to their customers’ doors. This translated into a marked increase in food delivery and cloud kitchens – designed to offer meals exclusively through delivery.

A whopping 70 per cent of restaurants are eyeing cloud kitchens to expand their business, the POSist Restaurant Industry and Market Evolution report – UAE edition 2021 revealed. The study, based on an online survey with restaurant operators and interviews with executives, unveiled that 40 per cent of restaurant operators recognise investment in technology as one of the top priorities.

“With the growing appetite for food delivery in the UAE and significant increases in the costs of prime real estate, the potential for dark kitchens was inevitable. Overall, the dark kitchen model was positively accepted in the region, giving restauranteurs the opportunity to deliver directly to customers whilst avoiding the expenses associated with retail models,” notes Manhal Naser, group CEO of AWJ Investments.

AWJ Investments recently announced the launch of DKitchen, its dark kitchen concept, hosting a number of new virtual brands. It also launched an automated contactless dispatching model, which places orders

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August 2021

Food delivery

A whopping 70 per cent of restaurants are eyeing cloud kitchens to expand their business

70%

in dedicated boxes with a locked code. “The unique contactless dispatching model has a smart software designed specifically for DKitchen. The orders transit through an automated production line and are sorted automatically, eliminating the need for multiple dispatchers, and resulting in less wait time, reduced cost and a decrease in human error,” explains Naser. “The automated dispatch system entirely removes the human interaction of delivery drivers and dispatchers in line with social distancing expectations.”

However, with food delivery gaining momentum, which cuisines are witnessing greater demand within the cloud kitchen space? “With Dubai being such a diverse city, we have observed demand spanning various cuisines with a high focus on Arabic, Asian and Western cuisines. At DKitchen, we aim to address this demand, in addition to other soughtafter cuisines, through the development of new virtual brands,” says Naser.

“We also see an increasing popularity in the demand for quick service restaurants and street food style concepts as their perfectly positioned delivery offering, in terms of speed and price, cater towards a wider segment of the market.”

However, consistency is key and quality can only be achieved when the correct procedures are in place and the full process is continuously monitored, opines Naser. “Our system is to fully manage the quality standards of each brand throughout the entire process, from concept creation to the moment it reaches the customer’s table. DKitchen is like a factory production, designed with carefully organised and hygiene-controlled zones to ensure that food only leaves its designated zone either during preparation or while it is being delivered to the customer.” gulfbusiness.com

The Brief / Insurance

advancement and investment taking place in just over a year. So, what does this mean for insurers, and more importantly, for customers?

ILLUSTRATION: GETTY IMAGES/PRETTYVECTORS

ACCELERATED ADOPTION OF DIGITAL HEALTH SERVICES

COMMENT

Dean Pollard General manager of Bupa Global Africa, India and Middle East

Lens of change How a year of transformation is affecting both insurers and customers

T

he Covid-19 pandemic and resulting knock-on effect saw a shift in consumer behaviour, with many industries reacting to the evolving needs of customers overnight. While 2020 was all about disruption, 2021 has been a year of transition – one in which we are beginning to shape our future instead of reacting to the present. This transition has been ubiquitous, spanning several sectors as they experience tremendous changes in their digital offerings and customer demands. The insurance industry in particular has seen a shift that will have a compelling effect on healthcare, as health and wellbeing is now at the centre of our attention like never before. The global pandemic has made health one of the most pressing topics on the world’s agenda and a top priority for many. What we have experienced is an acceleration of healthcare innovation, with significant digital

gulfbusiness.com

Remote health has established itself as the new norm as the UAE saw a 500 per cent overall increase in digital health utilisation between March and September 2020 compared to the same period the year before.

As technology continues to become mainstream in healthcare, more than 50 per cent of hospitals in the UAE are using IoT-based solutions which allow the automation of daily tasks and enable effective monitoring and control of connected medical devices.

Digital health has not only offered convenient access to medical services remotely, but it also has the potential to replace traditional hospital visits in the future as it reduces the strain on the healthcare system.

The pandemic also drove us to put new technologies into practice by providing more integrated solutions such as wearables, big data, and AI. Integration allows us to improve our abilities in providing patient care, for example remotely monitoring patients, even after they are discharged.

Importantly, digital health offers convenient access to mental health services with utmost privacy. A survey conducted by Bupa Global at the end of 2020 found that mental health challenges were significantly higher in the UAE compared to the rest of the world. More than a quarter (28 per cent) complained of burnouts, compared to 17 per cent globally, while 21 per cent experienced obsessive or compulsive thoughts, compared to 10 per cent globally. The rapid adoption of digital health proved to be a major success as part of the UAE’s response to providing safe and socially distant interactions for both clinicians and patients. This model reduces costs across the healthcare ecosystem, from patients to insurers and providers.

LEVERAGING AI TO IMPROVE CLAIMS MANAGEMENT

As healthcare costs continue to surge with demographic shifts and rise in chronic conditions, insurers are under pressure to manage claims processes efficiently and reduce administrative costs. Customers have made it clear that they will stay with insurance providers who offer seamless services and flexible coverage options.

WELLNESS INITIATIVES AND PARTNERSHIPS

The lockdowns forced people to stay indoors for most of last year, leading to lower physical activity, isolation leading to loneliness, and other mental health August 2021

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The Brief / Insurance COMMENT

issues. With the rise in digital use across all demographics and a population that is skewed towards younger age groups, there is an opportunity for insurers to connect with a broader section of customers through interactive wellness initiatives.

These programmes help improve members’ physical and mental health while encouraging positive lifestyle changes.

By acting as a valued partner in the customer’s health and wellness journey, there is the opportunity for insurers to proactively reduce health claims in the long term.

As the UAE sees the return of elective surgeries this year, primary care has become a vital building block towards the country’s healthcare systems and infrastructure. Given the increase in lifestyle diseases due to sedentary habits, poor diet, and chronic stress, combined with the current focus on personal wellbeing, there is an opportunity to improve general wellbeing significantly with increased primary care offerings. While we were already seeing a shift towards personalised healthcare before the

CUSTOMERS HAVE MADE IT CLEAR THAT THEY WILL STAY WITH INSURANCE PROVIDERS WHO OFFER SEAMLESS SERVICES AND FLEXIBLE COVERAGE OPTIONS

pandemic, digital and technological advancements and shifts in consumer behaviour have accelerated this even further. As a result, healthcare will be more inclusive and accessible, with patients able to tailor their care to their own individual needs.

CUSTOMER CENTRIC INSURANCE

The pandemic response tested the resilience of insurance companies across the globe. Agile businesses that quickly implemented solutions were able to offer customers uninterrupted care delivery. Going forward, customers will expect a user-friendly, digital-first journey that presents itself as a “super app” all-in-one solution. Insurers who continue to build competencies in this space will be able to seamlessly guide members on their healthcare journey. Intelligent processes are the need of the hour, and insurers are taking significant steps to leverage artificial intelligence for claims management and member engagement. Future focused players will explore business model enhancements that tackle market dynamics in preparation for whatever lies ahead.

ILLUSTRATION: GETTY IMAGES/NAZARKRU

The Brief / Finance

Anupam Pahuja VP - India, SE Asia and MEA at PayPal

COMMENT

Driving business recovery The needs of consumers are evolving and it is critical that businesses remain flexible to meet these demands

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s countries around the world slowly come out of the pandemic, consumers are adapting to a new way of life, born from a year of uncertainty. Businesses have been forced to accelerate to adapt to these changes by pursuing a digital first approach.

Small businesses and freelancers have redefined strategies to enable cross-border operations. This has increased the use of contactless payments while also ensuring that these businesses are able to grow. gulfbusiness.com

Remote working coupled with the ability to reach a global consumer base has given rise to a large number of SMEs and freelancers and the rise of new sectors such as telemedicine and edtech. SMEs and freelancers have the ability to work remotely while servicing global customers from anywhere in the world. Locally, the Middle East has been a popular destination for remote working. The UAE cabinet also approved a self-sponsored remote work visa that will enable employees from all over the world to live and work remotely from the Emirates, even if their companies are based in another country. The one-year visa allows foreigners to enter the UAE and work as per the terms and conditions issued with the visa. The initiative aims to support the public and private sectors, and also enables employees to expand their digital skills and adapt to the emerging gig economy.

Small and medium sized enterprises contribute to about 52 per cent of the UAE’s non-oil GDP, according to the Ministry of Economy. But without significant financial reserves or the flexibility to cut costs, small businesses are vulnerable to systemic shocks. SMEs in the UAE have been extremely resilient and flexible to adapt to change. In fact, 94 per cent of SMEs in the UAE, compared to 67 per cent globally, have pivoted their business models to continue to grow since the outbreak according to a study by Visa.

A vast majority of UAE merchants (82 per cent) surveyed by Visa also said that their investments in digital payments will play a major role in enabling business recovery. The study shows that 86 per cent of retailers surveyed expect e-commerce to continue to grow post-pandemic, while 60 per cent of merchants said that their customers prefer contactless payments, up from 18 per cent at the start of the pandemic. Nearly a third of respondents (31 per cent) said they offered contactless payments as an option to respond to growing demand during the pandemic.

The needs of consumers are evolving and it is critical that businesses be flexible to meet these demands. As such businesses should ensure user experience remains a key piece of the customer experience journey, solving issues including cart abandonment, enabling cross-border sales and offering customers the ability to pay in their local currency without losing on the exchange rate. Payments’ data can also help businesses get deeper insights on how to better serve their customers and make sure they are converting them at different points along their buying journey.

It’s not about just accommodating shopper experience expectations, but about keeping pace as they evolve.

August 2021

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The Brief / Q&A INTERVIEW

Andy White Senior vice president, dmg events

Explainer: Are physical events making a comeback in the GCC? Events that are the leaders in their sector will probably recover quicker as customers will reduce the number of exhibitions they attend

T

he events sector has been among the worst hit by the Covid crisis. How has the industry in the GCC tackled the situation?

In March 2020, the exhibition industry came to an abrupt halt and every event organiser in the GCC felt the impact. During the last 18 months the events sector has had to work quickly and creatively to adapt their business models to provide value for the markets in which they operate. Many have gone online to provide alternative ways of staying in touch with their markets through webinars and virtual exhibitions, although the results have been mixed.

Because of travel restrictions, we decided at a very early stage that we would need to transition our exhibitions from international to local. This strategy for our recent Index and Hotel Show events in Dubai worked extremely well and will form the basis of how we operate going forward. We have used the 15 months break from live events to speak with our customers and understand their (new) needs.

This has really paid off in the UAE and we are hopeful to repeat the same for our upcoming events in Saudi Arabia.

September as the first live events to return to the kingdom.

We have seen domestic and international restrictions imposed overnight – how do you handle such sudden changes?

The one predictable thing about operating in a pandemic is that it’s unpredictable. Many of the decisions that impact our events are completely out of our control, so we focus on what we can control. That has been supporting local businesses and building an event for the local community that won’t be impacted by travel restrictions. By adopting this approach, we’ve reduced the risks and minimised the volatility that many international events are experiencing.

We also assumed from day one that it’s unlikely

Have you noticed demand returning for physical events?

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August 2021

ILLUSTRATION: GETTY IMAGES/ADA DASILVA

Index Dubai and Hotel Show Dubai were the first events we organised in 15 months and while they were smaller because of fewer international exhibitors, the number of trade visitors exceeded our expectations. I believe there is a real desire for people to get back to face-to-face after spending the last 15 months communicating over Zoom and being unable to meet with industry colleagues. We’re currently planning to reopen our events business in Saudi Arabia, with the Saudi Entertainment & Amusement (SEA) Expo, INDEX Saudi and The Hotel Show Saudi – all taking place in gulfbusiness.com

The Brief / Energy

international exhibitors will travel to the GCC and those that do book stands may cancel at any time, dependent on travel restrictions. This means we’ve had to be flexible with international exhibitors, allowing them to cancel without penalty if they are unable to travel and moving their bookings to 2022.

ILLUSTRATION: GETTY IMAGES/MALTE MUELLER

What can be done to increase confidence among attendees and increase participation at in-person events?

The Dubai government and Dubai World Trade Centre have introduced some very clear guidelines for organisers, which makes it very safe for people attending our events. We have wider aisles, no queuing for registration, socially distanced seminar theatres and a range of other measures designed to ensure the safety and wellbeing of our guests.

However, even with all these measures in place, we do understand that it could take some time before everyone is confident about attending exhibitions again and we have to ensure that we continue to maintain health safety standards at all our events.

Looking ahead, when do you expect the events industry in the region to recover?

We expect our events to recover to pre-pandemic levels by 2023 or 2024 at the latest, but it depends on the event, the sector and how quickly the world recovers.

Events that are the leaders in their sector will probably recover quicker as customers will reduce the number of events they attend. However, the pandemic has also levelled the playing field and in the medium term, to remain competitive, event organisers will have to work harder to inspire, educate and entertain their audiences.

A N A LY S I S

Powering the future Solar is getting cheaper, while panels are becoming more powerful

Lastly, with the big shift to virtual events – will they become the norm in the future? Or will ‘hybrid’ events become part of the new normal?

Virtual events have served a purpose during the pandemic, but I think their future is uncertain.

If you’re running an event that focuses on providing high-quality educational content, then virtual events may be able to deliver some benefit, particularly if you’re trying to attract a global audience that won’t travel. However, we run product focused trade events in the design, entertainment, and hotel sectors where buyers come to source products. These buyers need to sit in the chair, check the quality and feel the fabric – something they cannot do virtually.

Virtual event technology has been around for over 20 years and before the pandemic, very few event organisers ran virtual events, because there simply wasn’t the demand. Has the pandemic changed this?

Possibly, but we’ll have to wait and see. I personally believe that the need to meet face-to-face is essential because it builds strong business relationships, the quality of which can never be replicated online. gulfbusiness.com

T

90%

The average drop in the cost of a solar panel between 2010 and 2020

he solar industry has spent decades slashing the cost of generating electricity direct from the sun. Now it’s focusing on making panels even more powerful.

With savings in equipment manufacturing hitting a plateau and more recently pressured by rising prices of raw materials, producers are stepping up work on advances in technology – building better components and employing increasingly sophisticated designs to generate more electricity from the same-sized solar farms.

“The first 20 years in the 21st-century saw huge reductions in module prices, but the speed of the reduction started to level off noticeably in the past two years,” said Xiaojing Sun, global solar research leader at Wood Mackenzie. “Fortunately, new technologies will create further cost-of-electricity reductions.” A push for more powerful solar equipment underscores how further cost August 2021

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The Brief / Energy A N A LY S I S

reductions remain essential to advance the shift away from fossil fuels. While grid-sized solar farms are now typically cheaper than even the most advanced coal or gas-fired plants, additional savings will be required to pair clean energy sources with the expensive storage technology that’s needed for around-the-clock carbonfree power.

Bigger factories, the use of automation and more efficient production methods have delivered economies of scale, lower labour costs and less material waste for the solar sector. The average cost of a solar panel dropped by 90 per cent from 2010 to 2020.

Boosting power generation per panel means developers can deliver the same amount of electricity from a smaller-sized operation. That’s potentially crucial as costs of land, construction, engineering and other equipment haven’t fallen in the same way as panel prices.

It can even make sense to pay a premium for more advanced technology.

“We’re seeing people willing to pay a higher price for a higher wattage module that lets them produce more power and make more money off their land,” said Jenny Chase, lead solar researcher at BloombergNEF. Higher-powered systems are already arriving. Through much of the past decade, most solar panels produced a maximum of about 400 watts of electricity. In early 2020, companies began selling 500-watt panels, and in June, China-based Risen Energy Co. introduced a 700-watt model.

“More powerful and highly-efficient modules will reduce costs throughout the solar project value chain, supporting our outlook for significant sector growth over the next decade,” Fitch Solutions analysts said in a research note.

Here are some of the ways that solar companies are super-charging panels:

“MORE POWERFUL AND HIGHLYEFFICIENT MODULES WILL REDUCE COSTS THROUGHOUT THE SOLAR PROJECT VALUE CHAIN, SUPPORTING OUR OUTLOOK FOR SIGNIFICANT SECTOR GROWTH OVER THE NEXT DECADE”

PEROVSKITE

“We will be able to take solar power to the next level,” said Kim Dohyung, principal researcher on a perovskite project team at Korea Electric Power Corp, one of several companies experimenting with the material. “Ultimately, this new technology will enable us to make a huge contribution in lowering greenhouse gas emissions.”

Adoption of perovskite has previously been challenged by costs and technical issues that prevented commercial-scale production. There are now signs that’s changing: Wuxi UtmoLight Technology Co. in May announced plans to start a pilot line by October with mass production beginning in 2023.

Massachusetts-based 1366 Technologies Inc., which makes wafers for solar cells, last month said it’s merging with Hunt Perovskite Technologies. The new company, called CubicPV, combines two complementary technologies that offer the potential to create more efficient panels. It plans to produce photovoltaic products that will use Hunt’s perovskite technology, layered atop a silicon wafer developed by 1366.

While many current developments involve tweaks to existing technologies, perovskite promises a genuine breakthrough. Thinner and more transparent than polysilicon, the material that’s traditionally used, perovskite could eventually be layered on top of existing solar panels to boost efficiency, or be integrated with glass to make building windows that also generate power.

Solar panels typically get their power from the side that faces the sun, but can also make use of the small amount of light that reflects back off the ground. Bi-facial panels started to gain in popularity in 2019, with producers seeking to capture the extra increments of electricity by replacing

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August 2021

BI-FACIAL PANELS

opaque backing material with specialist glass. They were also temporarily boosted by a since-closed loophole in the US that exempted them from tariffs.

The trend caught solar glass suppliers off-guard and briefly caused prices for the material to soar. Late last year, China loosened regulations around glass manufacturing capacity, and that should prepare the ground for more widespread adoption of the two-sided solar technology.

DOPED POLYSILICON

Another change that can deliver an increase in power is shifting from positively charged silicon material for solar panels to negatively charged, or n-type, products.

N-type material is made by doping polysilicon with a small amount of an element with an extra electron like phosphorous.

It’s more expensive, but can be as much as 3.5 per cent more powerful than the material that currently dominates. The products are expected to begin taking market share in 2024 and be the dominant material by 2028, according to PV-Tech.

In the solar supply chain, ultra-refined polysilicon is shaped into rectangular ingots, which are in turn sliced into ultrathin squares known as wafers. Those wafers are wired into cells and pieced together to form solar panels.

BIGGER WAFERS, BETTER CELLS

For most of the 2010s, the standard solar wafer was a 156-millimetre (6.14 inches) square of polysilicon, about the size of the front of a CD case. Now, companies are making the squares bigger to boost efficiency and reduce manufacturing costs.

Producers are pushing 182- and 210-millimetre wafers, and the larger sizes will grow from about 19 per cent of the market share this year to more than half by 2023, according to Wood Mackenzie’s Sun. The factories that wire wafers into cells – which convert electrons excited by photons of light into electricity – are adding new capacity for designs like heterojunction or tunnel-oxide passivated contact cells. While more expensive to make, those structures allow the electrons to keep bouncing around for longer, increasing the amount of power they generate.

Bloomberg gulfbusiness.com

The Brief / Social Zaib Shadani Managing director, Shadani Consulting

COMMENT

getting them to notice you. Start by following other accounts and engaging with them. Comment on key influencer accounts and offer genuine input, feedback or expertise. Help your followers find what they’re looking for online. Answer their questions and engage with them online. Take a few minutes every day to comment on key influencer accounts and offer your honest opinion, and not just a generic ‘like’. If you do this genuinely and intelligently, you’ll start capturing people’s attention and building your network quickly.

2. Optimise your time spent on social media

Never too late Five social media marketing tips for beginners

I

f you haven’t joined social media yet, don’t worry. It’s never too late to get onto social media and leverage the power of those platforms to market your business. But if you still feel that you’ve missed the boat, here’s something to consider: Many companies are still doing it wrong and failing to engage and retain customers. Here are five ways to ensure that you get started on the right foot and don’t miss any more opportunities.

1. Provide value It can be a little daunting when you start out on social media and have zero followers – how do you go about building a community of followers that are organic, relevant and engaged? The first step is by introducing yourself to the community and gulfbusiness.com

Social media marketing can be addictive and a timeconsuming process, so it’s a good idea to use tools like HootSuite to tie all of your accounts together and schedule posts to appear at pre-determined times. This will allow you to create your content as you see fit, and have it automatically posted, without having to manually do it multiple times a day. The additional benefit is that it can help if you have audiences in different time zones. Posting something at 10pm EST may work in some time zones, but most of your UK audience will be asleep.

Develop a calendar of the best times to post based on the audience you would like to interact with and let the scheduling tool do the rest.

3. Create unique and compelling content – with third party validation Your social media account should have its own unique ‘personality’. What makes you different from your competitors and why should customers care? Creating your social identity includes coming up with your own style of posts, unique hashtags, running competitions and giveaways, developing memes, and ultimately, thinking outside the box to make people want to follow you and be engaged with whatever you decide to post next. Not only should your tone of voice, visuals and overall content be unique, but you should aim to further validate and amplify your USP by posting links to blogs and articles that are talking about you, highlighting your accomplishments, promoting your news, etc. Third party validation is one of the cornerstones of a successful social media marketing strategy.

4. Be authentic with followers People respond to authentic content – they want to interact with real people, not bots, and are very savvy when it comes to knowing which of the two they are dealing with. People also don’t want to be spammed with irrelevant or self-promoting content; they want to feel appreciated for interacting with you. Always remember to acknowledge and August 2021

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The Brief / Alan’s Corner INTERVIEW

Alan’s Corner Engagement

Return the favour whenever you can and watch your community grow

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thank followers for posting and sharing your content. Moreover, return the favour whenever you can and watch your community grow. Slowly you’ll start to see a rise in followers and engagement. In most small businesses, it’s usual to have the owners or founders manage the social media, but as the business grows and the social media marketing efforts are outsourced, it is critical to remain true to your followers and always ensure an authentic connection that is grounded in ‘real’ conversations.

Alan O’Neill Change consultant and speaker

Connect with your customer The next great battleground is not in product differentiation but in customer experience

A

PEOPLE RESPOND TO AUTHENTIC CONTENT – THEY WANT TO INTERACT WITH REAL PEOPLE, NOT BOTS, AND ARE VERY SAVVY WHEN IT COMES TO KNOWING WHICH OF THE TWO THEY ARE DEALING WITH 5. Leverage the power of your connections Social media is more than a way to generate sales – it’s a great tool to create a wide global network that can be galvanised into action. It’s also an opportunity to get to know people from your industry that you wouldn’t otherwise be able to access.

So, ensure that you purposefully create relationships with thought-leaders and people of influence that have a wide group of followers in their own right. There is great power in collaborating with influencers, who, in turn, can have a significant impact on the social media success of your brand.

A retweet or a shout-out from the right influencer can ensure your brand or content gets in front of a whole new legion of hundreds of potential customers.

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August 2021

WHEN YOU ARE MAKING CHANGES TO PROCESSES, PRODUCTS OR OTHER INITIATIVES, ASK ABOUT THE IMPACT ON CUSTOMERS

s the volume, the speed and the complexity of change accelerates exponentially, businesses around the world and across industries are trying to cope in a new marketplace. But where is all this change coming from? It can’t all be just because of the pandemic. The four main drivers of change help to explain it.

Sociological: People are changing after the pandemic in terms of their behaviours and attitudes.

For example, people today have a stronger sustainability conscience.

Economical: The economy continues to change with currency fluctuations, interest rate variations and oil price volatility. Some countries are in growth, while others are in decline.

Political: Compliance is a growing phenomenon as is evident with data protection, for instance. Consequently, banks – for example – are having to resource up significantly to cope with the extra demands placed on them to be squeaky clean.

Technological: And of course, let’s not forget about technology and the massive impact that it is having on the world. Moore’s Law rings true; the capacity in processors, mainframes and memory banks that would have required the space of a football stadium 50 years ago can now fit in your pocket. The growth in digital and mobile is phenomenal.

Some key trends have emerged as a result of the collision of all four drivers. Commoditisation is a real example. More and more service providers are coming to terms with the reality that they can no longer differentiate on product alone. As technology improves, the barriers to entry for new competitors reduce. It’s getting easier to copy established brands, quite quickly.

Banks recognise this. Where in the past they gulfbusiness.com

The Brief / Alan’s Corner

industries. And much of that customer experience is still face-to-face.

Steps to take in re-structuring 1. Put the customer at the heart of all decision-making. When you are making

changes to processes, products or other initiatives, ask about the impact on customers. More than anything this is about culture. This starts in the boardroom and requires a genuine win-win mindset.

When leaders role-model this, consistency is more likely to follow.

2. Listen to your customers.

Because customers’ expectations and preferences keep changing, take time to find out directly from them what it’s like to be a customer of your business.

Consider mystery shopping, customer surveys or other forms of listening.

ILLUSTRATION: GETTY IMAGES/MALTE MUELLER

3. Define ‘what good looks like’ at every customer touchpoint. Stand back

from your business and critically appraise all touch points between you and your customer. Internal workshops are essential for getting to the heart of the experience.

4. Make your people accountable. Linked to

might have thought they could differentiate their mortgage products, they now realise that it is no longer the case. A mortgage is a mortgage – regardless of where you get it. There might be some subtle differences, but over its lifetime of 20-30 years, it’s usually not that much.

So how then can organisations differentiate? The next great battleground is not in product differentiation but in customer experience. That of course means different things to different people in varying gulfbusiness.com

customer service, what measures can you set for each and every person on your team? To make everybody accountable, you also need to consider appropriate rewards and consequences.

5. Train your people.

The last word The concept of providing great customer service is as important for B2B businesses as it is for B2Cs. Check back in here over the next two months and I’ll go into more detail for each of my 7-Steps to Profit.

August 2021

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The Brief / Infographics

Packing your bags?

People around the world are evaluating travel plans amid border restrictions, new Covid-19 variants, safety concerns and the way potential destinations are handling the pandemic ALL DATA AS OF MAY 2021

Barriers to travel globally Consumer concerns that impede travel hover around health and safety 0

0

TOP 6 REASONS

10

10

20

30

20

Wo r

24%k

30

Own healt /family h situ ation 2

4%

40

40

Price of travel

32 %

Safety

Travel restrictions

37 %

35%

Travel impediments Safety

Travel restrictions

Price of travel

60%

TRAVEL RESTRICTIONS Several respondents in the region feel discouraged to travel because of border closures

55% 50% 45%

45%

35% 30%

18

15 Oct 20 22 Oct 20 29 Oct 20 05 Nov 20 12 Nov 20 19 Nov 20 26 Noc 20 03 Dec 20 10 Dec 20 17 Dec 20 24 Dec 20 31 Dec 20 07 Jan 21 14 Jan 21 21 Jan 21 28 Jan 21 04 Feb 21 11 Feb 21 18 Feb 21 25 Feb 21 04 Mar 21 11 Mar 21 18 Mar 21 21 Mar 21 01 Apr 21 08 Apr 21 15 Apr 21 22 Apr 21 29 Apr 21 06 May 21 13 May 21 20 May 21 27 May 21

UAE

August 2021

i s ks

48%

The UAE stands out in terms of improving international travel sentiment Getting worse

40%

Saudi Arabia

Getting better

Global average 47%

37%

UAE 35%

40%

25%

lth r

Positive attitude

Travel restrictions have proven a more constant barrier Health risks

Hea

52%

US 31%

46%

UK 33%

46%

Australia 57%

32%

gulfbusiness.com

50

Leisure travel, anyone?

Travel frequency intentions Type of trips by traveller segment

The UAE leads the way with residents planning to travel substantially more to international destinations International holiday only

Domestic holiday & international

73%

TOTAL SHARE OF PEOPLE WHO PLAN TO TRAVEL

63%

61%

77%

64%

33%

On-The-Go (3+ trips)

80

On-The-Fence (planning to travel but do not know how much)

70

25%

60 60

37%

RESPONDENTS SELECTED ALL THAT APPLY 50

57%

70%

80

70

67%

55%

70%

Occasional (1–2 trips)

Domestic holiday only

23%

56%

50 40 40

69%

30

36%

30 20

27%

86% 17% 13% All

11%

11%

Japan

US

31%

17%

20%

51%

10 10

27% 13%

20

15%

13%

International business trip

0

Australia

UK

Germany

France

Domestic business trip

International holiday

Domestic holiday

0

UAE

*Numbers don’t add up to 100

Young travellers

TOP 10 INTERNATIONAL DESTINATIONS CONSIDERED FOR TRAVEL IN BELOW COUNTRIES

Millennials make up more than half of the total population planning to travel for a holiday in the next 12 months Gen Z (2000 and later)

Millennial (1982–1999)

Gen X (1965–1981)

% OF RESPONDENTS

Baby Boomer (1946–1964)

UAE

Silent Generation (1945 and earlier)

1%

DOMESTIC HOLIDAY 12%

51%

24%

12%

1%

INTERNATIONAL HOLIDAY 10%

55%

22%

12%

UK

US

Maldives

24

Spain

36

Canada

23

Canada

19

Italy

31

UK

20

Switzerland 19

Greece

30

Italy

19

UK

16

Portugal

29

Australia

18

Japan

16

France

24

France

16

US

15

Ireland

20

Iceland

16

Singapore

15

US

20

Spain

15

Thailand

15

Germany

18

Sweden

15

Philippines

15

Canada

17

Germany

14

Italy

12

Iceland

17

Puerto Rico 13

Business-centric travel Business travel in the next 12 months presents recovery challenges but also opportunities in certain markets BREAKDOWN BY REGION

BREAKDOWN BY COUNTRY 18%

14%

GLOBAL AVERAGE 12%

11%

15

10

6% 5

Europe

US

APAC

MEA

0

18%

UAE India Egypt Saudi Arabia Indonesia China Australia Philippines Malaysia Japan Singapore

GLOBAL AVERAGE 12% 2

6

10

14

18

SOURCE: YOUGOV INTERNATIONAL TRAVEL & TOURISM REPORT 2021

gulfbusiness.com

August 2021

19

The Brief / Lightbox

Germany’s Pauline Schaefer-Betz competes in an artistic gymnastics event of the women’s qualification during the Tokyo 2020 Olympic Games on July 25, 2021. The German women’s team are wearing full-body unitards as a “statement against sexualisation” in the sport 20

August 2021

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gulfbusiness.com

August 2021

21

PHOTO: LIONEL BONAVENTURE/AFP VIA GETTY IMAGES

INTERVIEW / DARIUSH SOUDI

A LIFE LESS From poverty to tragedy, Dubai-based businessman Dariush Soudi has seen it all. Yet he persevered against all odds and now has a remarkable life story to share, even as he embarks on a new odyssey

BY AARTI NAGRAJ

P H O T O S B Y J O A C H I M G U AY

22

August 2021

gulfbusiness.com

ORDINARY

S

itting in plush chairs in a discreet little corner at the Capital Club in Dubai, I felt like I was listening to the script of a Hollywood movie. Sat opposite to me was Dubai-based businessman Dariush Soudi, whose personal journey so far has all the ingredients that make for a typical blockbuster. A tough early childhood in Iran; being bullied in school in England because of his dyslexia and accent (which only toughened his resolve to succeed); setting up a successful business in the UK; attacked at knife-point within his own house (with his children thankfully behind closed doors in their rooms); the trauma causing a life-threatening heart attack; arriving in a new country (the UAE) with no money to start life anew at 44; surviving on two cups of coffee and a doughnut every day for six months; and the journey back to becoming a prosperous entrepreneur. No, I did not make up any of that.

Talking animatedly with a smile on his face, Soudi – who regularly posts inspirational messages on social media addressing his audience as ‘gladiators’, says he realised the fragility of life very early on, which has made him take risks that not many can easily shoulder. “I am quite comfortable with taking risks, because 24

August 2021

what’s the worst thing that could happen – you could die, right?

But that could happen anyway, so you can only give it your best shot,” he says. Having resolved early on that he wanted “the best in life”, Soudi says he pursued that path towards gaining wealth and abundance. Hence, although he lost all his fortune after his first entrepreneurial stint in the UK, he was determined to find success once again – this time in Dubai.

“I arrived in Dubai with $750 in my pocket. So, the year before I was buying Ferraris with cash and credit cards. A year later, aged 44, all I had was $750. [I arrived in Dubai] just after Ramadan in September 2009. Before that everybody was talking about the success of Dubai, but after September, we had the global financial crisis. So people thought I was crazy [moving into Dubai at that time to set up a business]. The funny thing was that I didn’t even know what I was going to do. After I landed, I thought about what I’m good at. And I’m good at setting up businesses. So, I became a consultant. Before September 2009, everybody was making money and so they didn’t need a consultant. But as soon as the recession hit, people needed some support. So, what was a really bad time for everybody else was a good time for me,” he reveals. gulfbusiness.com

INTERVIEW / DARIUSH SOUDI

The process of establishing himself was no easy task – Soudi says there was a time when he survived on just two doughnuts and a coffee a day since that was all he could afford. Undeterred, he slowly established his business and set up his company – Be Unique Group – which has diversified operations in digital sales and marketing, employee training and retention, hospitality as well as recruitment.

The company also plans to expand operations into establishing event venues that can cater to huge audiences via video conferencing. The first such space – being set up in collaboration with a local conglomerate in Dubai – is expected to open before the end of this year.

But the business venture that is currently claiming the attention of the businessman is his cryptocurrency trading platform.

Launched in 2020, it offers a range of cryptocurrency trading services, including spot, over-the-counter (OTC), futures, and margin trading products. According to Soudi, between January and June 2021, the platform saw trading values reach over $1.2bn with the amount growing on a monthly basis – from $272m in May to $458m in June. “We have great traders, but the main reason it’s been very successful is because we’ve been really good at customer service – if there are any problems, we just help them straight away.”

BLOCK BY BLOCK

“I AM QUITE COMFORTABLE WITH TAKING RISKS, BECAUSE WHAT'S THE WORST THING THAT COULD HAPPEN – YOU COULD DIE, RIGHT? BUT THAT COULD HAPPEN ANYWAY, SO YOU CAN ONLY GIVE IT YOUR BEST SHOT” gulfbusiness.com

The cryptocurrency market has gradually crept its way into the mainstream investment landscape, with its value topping $2 trillion for the first time in April 2021 – ahead of its rout in May this year. Tokens such as Bitcoin and Ethereum have been the stalwarts driving the ecosystem’s growth, although extreme volatility – Bitcoin went from roughly $24,000 in December 2020 to a record high of around $65,000 in April and dropped back to roughly $29,700 in July driven by comments from Tesla boss Elon Musk and tightening restrictions in China – has caused concerns among some investors in recent months.

But the fundamental technology driving the adoption of cryptocurrency – blockchain – is here to stay, with government and private sector pioneers across the world understanding the benefits of using a digital, decentralised public ledger of transactions that is reliable, safe and transparent. The progressive GCC states – particularly the UAE and Bahrain – have announced ambitious plans to accelerate the use of blockchain in their dealings, as they transition towards innovation and knowledge-driven economies.

The Emirates Blockchain Strategy, launched in 2018, aims to transform 50 per cent of government transactions into the blockchain platform by 2021. By adopting this technology, the UAE government expects to save Dhs11bn in transactions and documents processed routinely, 398 million printed documents annually and 77 million work hours annually. Meanwhile the UAE KYC Blockchain Platform, set up in February 2020 by Dubai Economy in partnership with member banks, is a national ecosystem for the exchange of verified “know your customer” data between licensing authorities and financial institutions.

In May, Dubai-based freezone DMCC also launched its new Crypto Centre to support businesses operating in the cryptographic and blockchain sectors. Located in Almas Tower, the DMCC Crypto Centre offers co-working spaces for all types and sizes of crypto businesses, including those developing blockchain-enabled August 2021

25

Incentivising traders Every time a person trades on the platform, they get compensated in tokens

40,000

Registered traders primarily from China, Russia, Turkey and the US

trading platforms to firms offering, issuing, listing, and trading crypto assets. A month later, the Bitcoin Fund – from Canada – listed on the Nasdaq Dubai exchange, becoming the first of its kind to trade in the Middle East.

As the region sees growing interest in the crypto space, Soudi is keen to leverage untapped opportunities with his new platform.

But according to him, what makes it distinct from its peers is that the platform enables traders to become shareholders of the ecosystem and benefit from the generated revenues.

REVOLUTIONISING RETURNS “We felt that we needed to have more of a unique opportunity to exponentially grow this platform.

So we decided to create our own tokens. Every time a person trades on the platform, they actually get compensated in our tokens. At the moment traders are just paying out commission to all the exchanges in the world. In our case, whatever they pay, they get back in tokens – as in shares – in our platform, so that will incentivise them to trade more,” explains Soudi.

26

August 2021

The tokens are valued at 10 cents each. As part of the first phase of launch, they are being offered at 2.5 cents, with the price set to increase to 5 cents in stage two and 7.5 cents in stage three. Once gulfbusiness.com

INTERVIEW / DARIUSH SOUDI

the platform raises all the capital it requires – $10m – then the token’s value will reach 10 cents, with the market valuation post that set to be determined by trading volumes. Trading of the token will begin on the platform from September 1.

“Unlike other exchanges, every time you trade, we give you tokens. Hence we are offering trading tokens – it’s never been done before. So unlike other businesses where you see gradual growth, we are looking at massive and fast growth because we are already [seeing trading values] of $1.2bn in six months,” elaborates Soudi.

Dividends to traders and investors will be paid out on a daily basis.

At the moment, the platform has 40,000 registered traders, primarily from Far East, Europe and South America. However, Soudi has his eyes set on this region as he strives towards a much more ambitious target. “I’m hoping to get at least half a million traders [by the end of this year]. There are 56 million traders on the

are going to be a community-owned exchange, so everything is very transparent, and everything is community-led for the good of all the shareholders and stockholders.”

Looking ahead, he projects that the value of the token will grow by 40 times in the next two years. “I see that we will go from $500m a month to $500m a day [in terms of trading values] …I’ve been doing business for 35 years and I have never this kind of turnover, it’s just crazy,” Soudi adds.

A DIFFERENT FUTURE One of the key lessons that the Covid-19 pandemic has taught us is technology’s ability to rapidly disrupt and transform the way we live and do business. And with blockchain seeing strong adoption worldwide, it’s abilities to support economies and people is growing. Analysis by PwC late last year found that blockchain

“MY JOURNEY HAS BEEN ONE OF RELENTLESS LEARNING – IF YOU ARE CONSTANTLY LEARNING, YOU WILL GET TO WHERE YOU WANT TO BE”

planet. We are looking for more traders, but we don’t want retail, buy-and-hold type of traders. We want hedge funds who have millions and trade on a daily basis, we’re looking for small investors who can help us grow with marketing so that we can just grow exponentially across the world.”

The platform currently enables the trading of over 1,000 tokens, with Bitcoin predictably seeing the most movement, followed

by Ethereum.

TALKING REGULATION A contentious topic that has come to the forefront in recent years is the lack of regulations governing the cryptocurrency space.

While some governments have started to provide regulatory frameworks and issue licences – including the likes of Abu Dhabi Global Market (ADGM) and the Bahrain Central Bank – Soudi says they do not intend to apply for local licences.

“We believe the future of finance will be decentralised finance (DeFi) and regulators around the world are trying to keep up with pace of development in the space to regulate it. We are following their progress and determined to be compliant once any legal framework is released,” he stresses. On its website, the platform also clearly states: “Our mission has much to do with the adoption of DeFi principles.”

Adds Soudi: “The traders on our platform how the project should evolve. So it’s not in the hands of one or two people – we gulfbusiness.com

technology has the potential to boost global gross domestic product (GDP) by $1.76 trillion over the next decade.

“The future of blockchain technology is very bright, and I do believe I can use it to help the world. We can provide wealth and spread wealth all over the world, where – briefly – we were all contained by who we knew and what we knew within our borders. Now we can actually share wealth, we have got know-how and knowledge about wealth and all this information can now be shared and rewarded using blockchain technology. So with this I can actually contribute to humanity, and a better future,” says Soudi.

Focusing his attention on his crypto business will also afford Soudi – who regularly dons the hat of a motivational speaker – more time to travel across the world. “On a personal level, I can travel the world and do more lecturing, motivating, inspiring and educating and spend less time in the office, running my bricksand-mortar business. It’ll free me after 35 years of business to go and educate young entrepreneurs on how to make money and prosper – they don’t have to be one of the 80 per cent of companies that go down in the first year. I did a talk some months ago and it’s gone viral in America. So, the plan is to get back on stage again and educate the masses on abundance and prosperity.”

His secret to success? “My journey has been one of relentless learning – if you are constantly learning, you will get to where you want to be.”

August 2021

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FEATURES / EDUCATION

R UPLOADING… KNOWLEDGE TRANSFER ON ILLUSTRATION: GETTY IMAGES/DRAFTER123

With the education sector having gone through a metamorphosis in the past year and a half, what does the future hold?

Zainab Mansoor explores

gulfbusiness.com

obust and future-driven education systems are a vital prelude to creating thriving economies.

In the wake of the Covid-19 pandemic, new education ecosystems manifested around the world disrupting traditional methods of disseminating and garnering knowledge. As classrooms morphed into video calls, students receded to postage-stampsize images, and face-to-face questions converted into digital ones, the breadth of academia seemingly shrunk to the size of a screen.

“Education systems across the globe experienced an unprecedented impediment to learning as nearly 1.6 billion students in more than 190 countries were affected by school closures,” an Alpen Capital report revealed. Across all countries, nearly 30 per cent of school days were lost between February 2020 and 2021, with schools operating at partial strength for 16 per cent of the year. Compared to the global average of 29 per cent, the ratio of school days lost was relatively higher in the GCC region as closures impacted nearly 50 per cent of school days in the year, it added.

However, industry stakeholders responded effectively in the form of capacity building collaborations with service providers and technology-led solutions, enabling hundreds of thousands of students, teaching professionals and support staff to switch gears and adopt digital instructions. With massive vaccination campaigns underway and easing of restrictions, students have found their way back to the classrooms. But with the education sector having gone through a metamorphic change in recent months, what does the future hold?

The GCC countries have considered education a priority and made considerable investments to curate an ecosystem that meets international standards, a trend that is expected to hold strong.

The UAE allocated 14.8 per cent of its federal budget to education in 2020, while Saudi Arabia earmarked 18.9 per cent of the annual budgeted expenditure to the sector.

Despite recent challenges, the local education sector has also fared well. Student enrolment at Dubai’s private schools August 2021

29

FEATURES / EDUCATION

ILLUSTRATION: GETTY IMAGES/CSA IMAGES

Education systems across the globe experienced an unprecedented impediment to learning as nearly 1.6 billion students in more than 190 countries were affected by school closures increased by more than 10,000 between Autumn 2020 and Summer 2021, marking an rise of 3.9 per cent, according to the Knowledge and Human Development Authority (KHDA). Dubai has a total of 210 schools, with 10 new schools set to open in the 2021-22 academic year.

DIGITAL TAKEAWAYS The pandemic brought to the fore the significance of upgrading existing infrastructures to prep for potential future crises and enhance operational efficiencies. Which is why the need for educational institutes to realign business models has been met with renewed vigour.

“Covid-19 has highlighted the lack of technology integration into the education system, compelling governments and institutions to optimise operations and swiftly adapt to change and innovate.

During school closures, the GCC governments ensured that students continued to learn through various remote modalities, such as online learning platforms, television and radio, and a range of other digital mediums. Although the adoption of edtech still remains at an infancy stage for the majority of people, such platforms are gradually gaining acceptance due to the ease of use and fun for learning.

Schools and universities across curriculums are extensively collaborating with edtech platforms while also indigenously launching online mediums to conduct classes and engage students,” the Alpen Capital report read.

The corresponding rise in the demand 30

August 2021

Soraya Beheshti, regional director of Crimson Education MEA and Turkey

of edtech has led to exponential user growth and educational institutes are now integrating advanced technologies such as AI/ML and robotics to improve learning as well as track students’ progress. Such advancements are likely to increase the democratisation and accessibility of education across the region, it added.

Based on their ability to effectively deliver content, new educational models are also garnering substantial traction.

“While the longer-term impact of Covid19 on education is yet to fully unfold,

learning models have become more techcentric over the last 18 months. Whilst the concept of ‘hybrid learning’ – mixed online and in-person education – has been around for several years, its use certainly became more prevalent in Gulf schools when students were only in-house for part of the week to maintain social distancing and keep down numbers,” notes Simon Hay, founder and CEO of edtech firm Firefly Learning.

“Overwhelmingly, teachers have witnessed the significant benefits that technology can bring to education. Edtech in particular has allowed schools to provide greater flexibility, personalisation and accessibility, making it easier for students and parents to engage better with the learning experience. There is a better understanding, and in some cases willingness, to embrace new educational models, such as hybrid and flipped learning for example. Technology is making these new approaches more accessible and manageable for all concerned and I believe we will continue to see an increase in their use.”

For many families, online schooling solved critical pain points in their children’s educational experiences, says Soraya Beheshti, regional director - MEA and Turkey, Crimson Education, which gulfbusiness.com

FEATURES / EDUCATION

assists students to get into top global universities.

“In the context of the UAE, where it’s not unusual for families to be split between countries, online schooling provided families with flexibility. Moreover, students found that when e-learning was done correctly, they had more time, greater opportunities, more face time with their teachers and a supportive learning environment. Online private schools tend to have less bullying and peer pressure than traditional schools, while still affording students the time to pursue other inperson activities, such as sports. Finally, online schools tend to be more affordable than their traditional counterparts.”

Parent engagement has seen a significant step change in its nature, with the relationship between school and home permanently changed, adds Hay. “Parents have a greater understanding and respect for what schools achieve, and teachers are able to work more closely with parents to bring about the best outcomes for their students. This looks set to continue, with the expectations of parents having changed in this area.”

The increased adoption of technological implementations has been accompanied by a surge in investment.

According to a report by Global Ventures, the edtech sector started the last decade with $500m of venture capital investments in 2010 and finished 14x times higher at $7bn in 2019. Edtech companies also attracted $8.3bn of venture capital funding in the first three quarters of 2020.

Demand for tools that can personalise instruction is swelling, and technology is allowing for the kind of innovation in education that fulfills such demands, it added.

Furthermore, mergers and acquisitions (M&A) within the education sector have also gained momentum. Last year, online learning platform for course-specific study resources Course Hero acquired math education platform Symbolab, which in 2020 alone, was used by more than 50 million students to work through/ understand one billion questions and explanations. Tutoring non-profit Saga

Brendan Vyner, director, Marketing and Student Recruitment, University of Wollongong in Dubai (UOWD)

Education too announced the acquisition of Woot Math, a suite of math instruction tools. The GCC’s education space also offers room for M&A activity.

HIGHER EDUCATION In the aftermath of the pandemic, distance learning was adopted across the

would essentially come to us. Now, the pandemic has caused us to re-think how we go about this, showing us how important it is to reach our customers where they are. The university stopped only being a building and started becoming an all-encompassing digital and physical entity,” opines Brendan Vyner, director, Marketing and Student Recruitment, University of Wollongong in Dubai (UOWD).

“Once the pandemic started, we began offering several virtual masterclasses that gave students a chance to sample a free university class online. We replaced traditional open days with virtual open days, and introduced digital one-to-one consultations, where students can talk to admissions officers and faculty from the comfort of their own home. We also made the shift from in-classroom education towards a mix of distance and blended learning – designing learning experiences that go beyond just the technology, but including active, collaborative learning supported and facilitated by our academics. I believe these changes will be permanent once the pandemic has subsided.”

In addition to recent challenges, higher education institutes face a tough ask as they aim to prepare a generation of professionals with deep skills to essentially bridge the gap between existing skillsets and those required in the future. By 2025, 85 million jobs may be displaced by a shift in the division of labour between humans and machines, while 97 million new roles may emerge that are more adapted to the new division of labour between humans, machines and algorithms, World Economic Forum’s The Future of Jobs Report 2020 revealed.

“The Future of Jobs report states that 34 per cent of businesses surveyed plan to expand their workforce due to technology integration. The current pace of technology adoption is expected to continue, thereby transforming tasks, jobs and skills by 2025. Hence, programmes in computer science, data science and artificial intelligence are highly relevant to developing skills necessary for jobs of the

“One thing that has changed since the Covid-19 pandemic began is how much more customer-focused a university has to be in order to enroll a student”

gulfbusiness.com

higher education space as well. And as universities look beyond Covid, they may opt to continue with online learning and other digital interventions to attract more students and gain resilience in the face of future disruptions.

“One thing that has changed since the Covid-19 pandemic began is how much more customer-focused a university has to be in order to enroll a student. Previously, universities could host an open day and that would be enough. Students

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31

future,” states Professor Ammar Kaka, provost and vice principal at Heriot-Watt University Dubai.

“At Heriot-Watt University Dubai, we are offering such programmes that help graduates harness the power of technology as well as develop soft skills, needed for building a successful career, especially in a post-pandemic world. In response to market demands and global trends, we are commencing new programmes such as MSc Global Sustainability Engineering, BA (Hons) Fashion Branding and Promotion, and BA (Hons) Communication Design from September 2021.”

He also stresses that university programmes must provide students with an understanding of contemporary developments, emerging trends, and real-world challenges – both inside and outside the classroom.

Crimson Education’s Beheshti adds: “Students are leaning more towards building their skills with greater flexibility of time due to the pandemic and this change outlines the future of schools and universities. Currently, a student could learn many of the technical skills universities provided though online courses. Yet, people still apply in their thousands and invest tens of thousands of dollars to go to universities – this year, we will place more than 1,000 students in universities around the world. This is because the value of such an education lies, not only in pure information, but in the way one learns to think.”

WHAT’S NEXT? The youth segment across the region is booming. By 2030, countries in MENA will see a 23 per cent increase in schoolage population, resulting in the need for approximately 25 million additional students to be accommodated in the education systems. This will put an additional burden on providing quality education for all, a UNICEF report states.

The region’s burgeoning youth base conflated with a growing appreciation for digital solutions offers a formidable reason to invest in and develop the formal education system. Furthermore, trends that disrupt conventional teaching methods may also gain force.

Beheshti opines that when it comes to permanent changes, the ambitions of 32

August 2021

ILLUSTRATION: GETTY IMAGES/ALASHI

FEATURES / EDUCATION

Professor Ammar Kaka, provost and vice principal at Heriot-Watt University Dubai

students to pursue a quality higher education will remain – if not increase. Further, students and their families will continue to look beyond their local bricks-and-mortar high school options for the best quality opportunities online.

“We will also see an increase in the adoption of blended schooling (some classes online, some at physical schools), and the recognition of the need to challenge traditional school models and embracing the benefits of edtech will also continue to rise.”

Vyner builds on it: “The increased popularity and adoption of blended learning will rise, allowing for more engagement and support between students and faculty in different physical locations. Blended learning needs to have a human-centred approach, factoring in the human capacity for learning and catering to different student capabilities across multiple digital touchpoints.”

While blended learning will continue to be on offer, the ‘blend’ may change in response to the prevailing conditions, opines Kaka from Heriot-Watt. “A key advantage of digital learning materials is the opportunity for asynchronous learning, i.e., a student can learn independently, at a time convenient to them.

With additional support provided by the instructor and peers, participants can design their learning schedule to a certain extent around their own work and play. This is a particular benefit for our postgraduate students, many of whom are studying for their Master’s degrees while working,” he explains.

While the jury is still out on whether online learning will become a post-pandemic mainstay, what is certain, is that the education system of tomorrow has been changed forever. gulfbusiness.com

BRAND VIEW

Phi Trends: Taking stock A look at the 2021 first-half performance of certain stocks recommended by entrepreneur and investor Shailesh Dash, who shares his perspective in this monthly column

S

ince the beginning of 2021, the changing market narratives have led to higher uncertainty and increased volatility in global equities. While accelerated vaccination programmes in certain countries has helped push equity markets to new highs, the recovery is likely to slow down over a period of time, which could restrict the upside in the short-to medium-term. Hence, it will be imperative for investors to focus on companies and sectors that are likely to gain competitive advantage and improve earnings over an extended period of time.

Given the importance of long-term investing, we had recommended a total of 26 stocks since March 2020 to capitalise on strong fundamentals and robust growth in earnings over

Performance of select healthtech and medtech stocks STOCK PRICE PERFORMANCE Company Name

Stock Price (USD)

YTD

Q2 21

Q1 21

2020

52-Week High

52-Week Low

Market Cap (USD bn)

EPS (USD)

Teladoc Health

146.8

-26.6%

-8.5%

-9.1%

138.8%

308.0

129.7

22.7

-4.4

Phreesia

63.6

17.2%

17.7%

-4.0%

103.7%

81.6

26.5

3.2

-0.8

Lemonade Inc*

84.3

-31.2%

17.5%

-24.0%

76.5%

188.3

44.1

5.2

-3.6

Health Catalyst

55.2

26.7%

18.7%

7.4%

25.4%

59.5

29.3

2.5

-2.8

Twist Bioscience Corp.

112.1

-20.7%

7.6%

-12.3%

572.8%

214.1

52.9

5.5

-2.7

-6.9%

10.6%

-8.4%

183.5%

Average Growth

SOURCE: BLOOMBERG, YAHOO FINANCE; DATA AS OF JULY 16, 2021;*LISTED ON JULY 2, 2020, ROSE 21.38% SINCE LISTING.

Performance of select fintech stocks in 2021 STOCK PRICE PERFORMANCE YTD

Q2 21

Company Name

Stock Price (USD)

Q1 21

2020

52-Week High

PayPal

294.6

25.8%

20.0%

3.7%

116.5%

309.1

Square

237.5

9.1%

7.4%

4.3%

247.9%

283.2

the medium term. Cumulatively, the 26 stocks appreciated by 11.1 per cent in Q2 2021 after declining by 8.3 per cent in Q1 2021, resulting in a net gain of 2.8 per cent in H1 2021 compared to a rise of 12.9 per cent and 11.4 per cent in NASDAQ and MSCI World index, respectively. It is worth noting that the recommended stocks delivered stellar returns of 116.7 per cent in 2020, outperforming the broader indexes by a significant margin.

Here, we have taken a closer look at two sub-sectors within the broader technology space to understand their performance during the past six months. We will explore other sub-sectors in the next issue.

Healthtech and medtech: The recommended stock prices of companies appreciated by 2.2 per cent in H1 2021. Most key recommended stocks experienced a pullback in Q1, down by 8.4 per cent, but strong recovery in Q2 of 10.6 per cent pushed the sector index performance in green during H1.

Within the selected universe, Health Catalyst was the best performing with gains of 26.1 per cent in H1, while Teladoc Health was the worst performer with losses of 17.6 per cent.

The outperformance in Health Catalyst was broadly driven by robust Q1 earnings coupled with strong future client growth and rising subscriptions going forward.

Fintech: The recommended fintech stocks continued the positive trajectory in H1 with gains of 8.6 per cent, after rising by 133.2 per cent in in 2021 2020. Within the fintech VALUATION MULTIPLES space, PayPal and ShiftP/E P/S EV/ EV/ 4Payments were the top Ratio Ratio Sales EBITDA performers with gains of 11.7 17.1 -63.4 23.7 per cent and 23 per cent 16.2 16.8 -138.5 respectively, while StoneCo 30.0 45.4 -31.9 was the only stock to experi11.4 11.9 -39.6 ence a drop of 17.5 per cent in H1. Square recorded gains of 45.1 44.2 -43.5 11.7 per cent in H1, continuing to benefit from the expected growth in earnings going forward.

VALUATION MULTIPLES

52-Week Low

Market Cap (USD bn)

EPS (USD)

P/E Ratio

P/S Ratio

EV/ Sales

169.1

346.1

117.0

108.2

EV/ EBITDA

3.3

89.8

15.1

15.1

69.3

0.4

659.8

8.1

8.3

468.8

Shift4 Payment*

91.4

21.3%

14.3%

8.8%

124.8%

104.1

34.2

7.4

-2.8

-

5.1

6.4

-115.8

StoneCo

57.0

-32.1%

9.5%

-27.0%

110.4%

95.1

40.3

17.7

2.9

19.4

23.4

3.8

8.7

PagSeguro Digital

51.5

-9.5%

20.8%

-18.6%

66.5%

62.8

34.9

16.9

3.7

14.0

11.9

2.2

7.5

2.9%

14.4%

-5.8%

133.2%

Average Growth

SOURCE: BLOOMBERG, YAHOO FINANCE; DATA AS OF JULY 16, 2021; *LISTED ON JUNE 5, 2020, ROSE 172.63% SINCE LISTING

gulfbusiness.com

Disclaimer: This column is purely for academic and educational purposes. Nothing mentioned here should be taken as solicitation to trade or a recommendation of a specific trade. The author has direct exposure in some of the recommended stocks.

June 2020 33

FEATURES / INSURANCE

INSURING THE FUTURE Insurance providers in the UAE have to adopt a digital customer-centric approach to ensure long-term growth

By Aarti Nagraj

T 34

August 2021

TECH GROWTH

ILLUSTRATION: GETTY IMAGES/SORBETTO

he pandemic has fundamentally changed people. While that might be a bold statement, most industry experts – across sectors – will attest to the fact that consumer behaviour has transformed, although it remains to be seen whether the impact will be temporary or permanent.

Looking at the UAE’s insurance sector, the change in consumer attitudes had a direct bearing on the industry’s outlook. “Prior to Covid-19, there was less of an immediate focus on protection by consumers in the market. As 2020 progressed, however, we started to see a trend that saw people re-assess their priorities when it comes to insurance cover and shielding themselves and their families from risks posed by death, disability and long-term illness. This translated into a tangible shift towards financial protection and in their expectations from insurance providers,” says Simon Price – head of Market Management at Zurich Middle East.

A recent survey conducted by YouGov and commissioned by Zurich in the UAE stated that more than half of the respondents – across all age categories – said that due to Covid-19, they were somewhat likely or extremely likely to consider purchasing life or critical illness cover, with more than 63.3 per cent of respondents aged 18-34 saying

they purchased life insurance since the start of the pandemic.

“This statistic demonstrates the real-world impact the pandemic has had on people’s purchase behaviour.

While there are people who believe insurance is not a necessity and live under the misconception that it’s rather expensive, or that they do not need it because they are young and healthy, the pandemic has certainly caused a lot of people to reconsider and we have seen a shift in mindset,” explains Price.

“While the Middle East insurance market is underpenetrated, the pandemic has been instrumental in driving a new wave of demand in the UAE. Life and health insurers witnessed an increase in the number of claims during the past year, where individuals required hospitalisation and medical attention, as well as cover for deaths,” he adds.

Stefano Nalin, EVP Business Development at Abu Dhabi National Insurance Company (ADNIC), also credits the way the UAE’s insurance sector handled the pandemic. “The industry swiftly, adroitly and effectively implemented measures to help individuals and businesses stay safe and recover, adapting both coverage and operations to meet new risks and new requirements.”

He adds: “With the end of the pandemic now in sight, one legacy may be the emergence of a more mature and sophisticated UAE insurance sector. The pandemic has certainly focused people’s minds on the importance of protecting themselves against risks, while the more sophisticated products and services born from the massive innovation seen over the last year may be the catalyst for significant growth in the industry.”

Predictably, one major trend that has emerged in the insurance industry is the accelerated adoption of technology. On the consumers’ end, individuals increasingly prefer to research and purchase insurance options digitally – especially with the rise in the number of online platforms that offer comparative analysis of the different packages available in the market.

A global report by IT firm Capgemini last year found that policyholders’ willingness to purchase insurance from bigtech players increased from 17 per cent in 2016 to 36 per cent in January 2020 and 44 per cent in April 2020. “To compete with bigtechs, insurers need to focus on critical priorities which are important including delivering superior customer experience (94 per cent), crisis-proof processes (90 per cent), deliver real-time response (87 per cent), be a caring partner (86 per cent), and have insurance-as-a-utility (70 per cent), the report stated.

It also found that insurance providers are falling short when it comes to utilising the cloud and open APIs (application programming interfaces). Among gulfbusiness.com

FEATURES / INSURANCE

PHOTO: GETTYIMAGES/NANOSTOCKK

customers mature and sophisticated offerings across channels and consumer line products.

Digital transformation is about constantly updating and modernising digital experiences.

Gone are the days when general site updates were sufficient in aiding customers, because in an era where digital means dealing with multifaceted integrations, multiple systems and services and deliveries across a variety of channels and devices, then customer centricity means an entirely relevant and seamless experience anywhere, anytime, anyhow,” he says.

“This change, perhaps more than any other due to Covid-19, is one the UAE’s insurance sector will have to realise is going to be forever ingrained into customer culture. Quite simply, it is a matter of fact that ‘24/7 consumer culture’ is now permanent,” Nalin adds.

the survey respondents, only 19 per cent said they have touchless processes, 29 per cent have humancentred design capabilities and digital-ready systems, 38 per cent have implemented open APIs, and 48 per cent have a cloud-native enterprise.

However, insurance players are recognising the need to embrace digital transformation to drive operational agility and ensure long-term growth, says Price.

“Digitalisation has definitely become more prevalent and has played an incredibly important role over the past year. To meet customers’ growing demands and to help them during their time of need, it is essential for businesses to adopt new technology. In the past year, most businesses have deployed new technology that has enhanced customer service, putting more emphasis on user-friendly platforms that can be accessed from the comfort of their home. This also helps businesses stay relevant in today’s everchanging market,” he says.

According to Nalin, the key to successfully implementing digital transformation is about putting people first.

“Investments into technology over the last year have not only met safety criteria and supported customers through the pandemic, they have also served to move the industry forward into the 24/7 digital realm.

Moving forward, it is very much about providing gulfbusiness.com

“Moving forward, it is very much about providing customers mature and sophisticated offerings across channels and consumer line products”

GROWTH PATH

Looking ahead, there are potential opportunities to explore across all verticals within the industry. “The rising cost of healthcare alongside the pandemic has created an upsurge in demand for protection, particularly critical illness insurance, to bridge the gap between any health insurance and actual costs of treatment

for serious health conditions,” says Price.

With life insurance penetration in the UAE currently at 0.5 per cent, there will likely be a growth in that segment, especially since Covid-19 has increased awareness of financial and health risks among consumers.

“On the macro-economic level, the UAE is currently projecting normal rates of growth, which would support demand growth across both the insurance retail and group segments,” he adds.

August 2021

35

BRAND VIEW

Finding success at the summit Irfan Tansel, CEO of Al Masaood Automobiles, shares some of his key learnings garnered from years of rock climbing that can help business leaders achieve their ambitious growth plans

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hen people search for the secret to success, the focus should not be on general qualities, like ‘determination’ or ‘motivation’ – although both are important. Instead, a story often paints a more vivid picture. Rock climbing, for example, with its physical and mental challenges, can offer a powerful tale of what it takes to find success.

In 2009, Brymer & Oades published a paper on the effects of participation in extreme sports. Their findings may surprise you. Far from making you rash or reckless, it turns out that adrenaline-pumping sports such as rock climbing actually build your character, making a person braver, more risk-tolerant as well as more compassionate. I believe I have reaped these benefits firsthand.

Interestingly, Riyadh is home to some of the world’s most extraordinary rock formations, and Faisal’s Pinnacle is where my soul found its sanctuary in the extreme sport of rock climbing in my younger years. To a non-practitioner,

Tansel’s journey to the summit of Faisal’s Pinnacle in Saudi Arabia

rock climbing might seem like an extremely dangerous sport, even borderline deadly. Yet, there is a sense of exhilaration and purpose when you set out to conquer pristine peaks with nothing but your own hands and mind.

Soon enough, I found that my newfound passion for the sport aligned perfectly with my passion for leadership, teaching me the same principles for realising one’s true potential. Here are some key principles garnered from years of rock climbing that may help you on your own journey towards success.

ALWAYS AIM HIGH Just as rock climbers strive to reach the top, true leaders seek to propel their businesses to new, often unimagined, heights of success.

Their vision for their personal career and the organisation’s growth may seem unrealistic to other individuals, but it’s the very oddsdefying nature of their goals that drives them to maintain the discipline required to meet the challenge. After all, a person is barely

motivated if their goals are easily attainable. There’s a reason why rock climbing is an exhilarating and addictive sport, while stair climbing is not. When I reached the summit of Faisal’s Pinnacle with my fellow climbers, we found a bottle and paper inside. When we opened the paper, we found out that only seven people had made it to the top before us.

The sense of pride when we added our names was nothing short of inspiring.

SET A PLAN AND BE PREPARED FOR OBSTACLES An expert rock climber is able to chart a route and stick to it. So should a leader. In a room full of diverse perspectives and competing agendas, a leader should have the clarity of vision to persuade — and inspire — others to defer to his or her set course of action. And just as important: you should have enough conviction in your plan to remain immune to the words of the naysayers that will undoubtedly cross your path.

This does not come by easy. A lot of planning and preparation is needed. When I set out a course of action for a business, the team and I spend weeks – if not months – plotting scenarios, conducting research and charting the future. This is exactly what extreme athletes do. They plan their trainings ahead of time and religiously stick to their plans. Preparedness is your protection against a change in weather and all other possible obstacles.

CREATE A WINNING TEAM Climbers love being around other climbers.

When the team are together on a mission, they are collectively committed to the task.

While they are competitive as a group, they

Irfan Tansel, CEO of Al Masaood Automobiles

you with all their might. As a leader you need to reciprocate with a cheer and an update on how the climb is going.

SELF-ASSURANCE IS YOUR AUTHORITY When you’re climbing, there are times when fear or fatigue kick in. A good climber is able to rally their inner strength to surmount these momentary setbacks. Team dynamics are heavily influenced by individual personalities; often, it is the member that displays the most self-confidence who is accepted as the group leader and rises to the top of the ladder. Remember: Your authority is established by your temperament, not your rank or accolades.

GET INTO THE FLOW Similar to many extreme sports, climbers talk about getting into the flow or what many athletes refer to as “the zone” – which describes an elongated period of focus.

When in ‘the zone’, climbers lose themselves in the action and enter a mindset that creates a sense of euphoria and even blocks pain.

Similarly, a person seeking to achieve their goals needs to develop laser-like focus. By creating such a routine, you can set up conditions where distractions melt away as you enter the flow. In such a state of mind, decision-making and problem-solving will come to you with clarity and ease. don’t compete against each other; instead, they push and support each other to meet their common goal. Your fellow climbers need to be competent enough, ambitious enough, and driven enough for you to form the same level of trust.

The secret ingredient to a winning team is a leader that communicates well. Authentic communication creates the trust everyone needs. In group climbing, communication creates trust, which then creates harmony.

When you are 180 metres high on a rock, hanging by your fingertips and tightening your toes till you cramp, tired and possibly frustrated by waves of fatigue, you realise that your life is in the hands of the climber underneath you, who is probably cheering for

“The secret ingredient to a winning team is a leader that communicates well.

Authentic communication creates the trust everyone needs”

BE CERTAIN IN TIMES OF UNCERTAINTY Once a climber has summited a peak, they must prepare for the other half of their job: a safe descent. Similarly, the head of a leading organisation has to prepare for the good times as well as the bad. Once their organisation has grown to become the market leader, they will face issues such as market relapses or disruptive innovation. They must know how to navigate these crises effectively in order to retain or regain their position.

These are just a few of the lessons one can learn from rock climbing. It may be a dangerous sport, but so is business. And only the fittest, most disciplined and most prepared of us survive both.

FEATURES / TECHNOLOGY

The Asian nation offers new hope for tech investors amidst a fundraising blitz

J

uly marked a watershed for technology startups in India, as a record bout of fundraising shifted attention to the world’s secondmost populous market, just as investors were becoming spooked by a crackdown on internet companies in China.

Food-delivery app Zomato became the nation’s first unicorn to make its stock-market debut, raising $1.3bn with backing from Morgan Stanley, Tiger Global and Fidelity Investments.

The parent of digital payments startup Paytm filed a draft prospectus for what could be India’s biggest IPO at $2.2bn, while retailer Flipkart Online Services raised $3.6bn at a $38bn valuation, a record funding round for an Indian startup.

“Indian entrepreneurs have been quietly building startups for a decade now, the country’s internet infrastructure has vastly improved in that time and there’s a very good appetite for tech stocks globally,” said Hans Tung, the Silicon Valley-based managing partner of GGV Capital, which manages $9.2bn in assets.

“Investors are beginning to see the huge upside and they expect India to be a China.”

Lenskart, an online retailer for eyewear, also said that it raised $220m from investors including Singapore’s Temasek Holdings and Falcon Edge Capital. It raised money earlier from KKR & Co and Japan’s SoftBank Group.

Unlike China, where online usage is much more developed, many of India’s 625 million internet users are just dipping their toes into the world of video streaming, social networking and e-commerce. Opportunities in online shopping are particularly attractive, as e-commerce accounts for less than 3 per cent of retail transactions. Tech startups in India are still paying to build supply chain and delivery networks.

India’s population is expected to overtake China’s this decade and the mood now among investors could not be more different in the neighbouring nations. China is reining in its tech companies, wiping over $800bn off market valuations

38

August 2021

RECORD FUNDING

India had a record $6.3bn of funding and deals for technology startups in the second quarter, while funding to China-based companies dropped 18 per cent from a peak of $27.7bn in the fourth quarter of 2020, according to data from research firm CB Insights.

Flipkart, one of India’s two dominant e-commerce players along with Amazon.com, is among a slew of startups planning to tap public markets in the next 24 months, with a line-up that includes insurance marketplace Policybazaar’s parent ETechAces Marketing & Consulting, logistics provider Delhivery and ANI Technologies’ Ola ride-hailing service. The IPOs will give retail investors a chance to own a stake in the startups, which had been available only to global private investors.

In those private markets, India has been minting startups valued at $1bn or more in recent months at unprecedented speed. In April, half-a-dozen unicorns were born within a span of four days, while intervals between fundraising rounds have contracted to weeks for many startups. A Credit Suisse Group AG report this year found there are about 100

PHOTO: GETTYIMAGES/SOPA IMAGES

INDIA BECKONS

from a February peak and shaving billions off the net worth of its most famous entrepreneurs. This month, the government abruptly pulled ride-hailing service Didi Global from app stores, months after regulators forced Jack Ma’s Ant Group to halt a blockbuster IPO at the eleventh hour. The clampdown is expected to continue, as regulators curb the power of internet companies and wrest back control of user data.

Indian tech companies “can attract global investors who’ve burnt their hands in Chinese tech companies,” said Nilesh Shah, group president and managing director at Kotak Mahindra Asset Management in Mumbai. The successful listing of a few loss-making startups could lead to re-rating of many existing companies and send the market higher, he said.

gulfbusiness.com

clamping down on foreign retailers, social media giants and streaming companies.

On top of that, some analysts are concerned that stock markets are a bubble waiting to burst and that many company valuations are far above their fundamentals. They caution that retail investors in new-age companies that have yet to generate profits will need to look beyond traditional value measures like EPS and P/E and must be able to assess factors such as investment in building a loyal customer base as the startups scale up.

HABIT-FORMING

“Many of these businesses are in the habit-forming stage of acquiring customers and hence the losses can be front-loaded,” said Ramesh Mantri, a director of investments at Mumbai-based White Oak Capital. “What really matters is the potential to generate cash flows.”

The new ventures also have competitive advantages over many traditional bricks-and-mortar rivals, which have high real estate costs and often suffer from broken distribution chains and complicated structures. Those constraints mean the many retail, banking and healthcare chains haven’t arrived at even the smaller cities, let alone the millions who live in remote rural areas.

“The proliferation of smartphones and the internet has allowed tech entrepreneurs to create new age business models to reach the country’s farthest corners,” said entrepreneur Ganesh.

And the promise of attractive returns for major investors as startups increase the number of public share sales could spur further rounds of funding.

The value of the For example, SoftBank, which sold out of Flipkart funding and deals for three years ago for a profit, returned to invest in its technology startups recent round. in India in the second “India’s consumer internet companies have come quarter of this year of age,” said tech tycoon Nandan Nilekani, chairman of outsourcer Infosys whose 1993 IPO introduced investors to an IT services industry that now has almost $200bn in annual sales and made billionaires of its founders. “When these new startups convert their pole position to earnings and cash flow, their future is assured,” Nilekani said.

Bloomberg

PHOTO: GETTYIMAGES/D3SIGN

“Global investors see the potential upside in India’s huge, under-penetrated market and capital flows have multiplied 10 times” unicorns in India with a combined market value of $240bn, in sectors from e-commerce and fintech to education, logistics and food delivery. “$1bn is the new $100m,” said Krishnan Ganesh, a serial entrepreneur who now promotes companies that have attracted investors such as Sequoia Capital, Lightspeed Venture Partners and Qualcomm Ventures. “Global investors see the potential upside in India’s huge, under-penetrated market and capital flows have multiplied 10 times.”

Optimism about India is tempered as one of the worst coronavirus outbreaks in the world threatens to erode decades of economic gains, with over 31 million infections and more than 400,000 deaths. At least 200 million Indians have regressed to earning less than the $5 minimum daily wage, Bangalorebased Azim Premji University estimates, while the middle class shrank by 32 million in 2020, according to the Pew Research Institute.

Nor are investors in India free of political risks.

Technology startups also face a tightening regulatory regime with Narendra Modi’s government gulfbusiness.com

$6.3bn

August 2021

39

FEATURES / PRIVATE EQUITY

PROMISING OUTLOOK As an asset class, private equity continues to perform robustly, with venture capital seeing a standout year on the back of enthusiasm for technology and healthcare, writes Zainab Mansoor

T PHOTO: KTSDESIGN/SCIENCE PHOTO LIBRARY/GETTY IMAGES

he year 2020 was an outlier. With a global health crisis at the fore and its economic implications spreading across businesses worldwide, various industries were put through a wringer. However, the private equity (PE) space weathered the tide, despite short-term disruptions caused by the Covid-19 pandemic.

“The year in private equity was marked by volatility and resilience. While fundraising declined overall and across most sub-asset classes, it rebounded vigorously in the latter half of the year. Buyouts and growth equity bore the brunt of fundraising decline. VC (venture capital) had a standout year on the back of enthusiasm for technology and

healthcare,” states the McKinsey Global Private Markets Review 2021.

The private equity investment performance outpaced that of other private markets assets for the fourth consecutive year, based on year-to-date pooled net internal rate of return (IRR) as of the third quarter of 2020. After a sharp decline in performance in the first quarter, private equity recovered quickly to post a nine-month trailing pooled net IRR of 10.6 per cent through September 30, the report added.

“As it has for the last decade, PE as an asset class continues to outperform other private markets asset classes, as well as public market equivalents, by nearly all measures. Among PE sub-asset classes, VC continues to outperform buyouts at the median but sees greater performance dispersion. A significant driver of VC’s strong growth in 2020 was the prominence of healthcare VC, which enjoyed record fundraising growth of 70.5 per cent.”

Meanwhile, Bain & Company’s Global Private Equity Report 2021 also revealed that the broad technology sector attracted the most PE investment in 2020 (29 per cent of total buyout deal count globally). Funds gravitated toward Saas-based businesses with particularly sticky business models, like vertical software.

“The financial sector also drew significant private equity interest despite the slumping economy, which typically hits the sector hard. Insurance didn’t see much activity, while the payments sector was on fire. The secular shift to digital payments, that was already well underway, got a Covid-19 boost when retailers and consumers alike backed away from cash in favour of cards and other forms of online payment. Deals involving payments companies made up 24 per cent of total financial services/ fintech investment value in 2020, up from 16 per cent the year before,” the report said.

Regionally as well, the technology and healthcare sectors fared well as investors doubled down on funding to foster growth. MENA venture capital funding crossed $1bn in 2020 for the first time,

The broad technology sector attracted the most PE investment in 2020, accounting for 29 per cent of the total buyout deal count globally 40

August 2021

gulfbusiness.com

PHOTO: METAMORWORKS/GETTY IMAGES

up 13 per cent from 2019, according to a MAGNiTT report. Total funding into the e-commerce sector rose by 24 per cent to $162m, while the F&B and healthcare sectors more than tripled their total funding to $122m and $72m respectively.

Industry stakeholders harbour similar sentiments in terms of sectors of growth; 95 per cent of institutional investors and family offices in an annual survey commissioned by Bahrain’s Investcorp named automation, digitisation and artificial intelligence (AI) as the top trend they feel will shape the global economy over the coming decades. Aging population (69 per cent), climate change (65 per cent) and personalised healthcare (60 per cent) were listed by investors as the second, third and fifth highest-ranked trends, respectively. The firm recorded investment activity of $1.4bn in H1 FY21 driven by two new private equity investments in the US and Europe, two add-on acquisitions and other investments. Meanwhile, its placement and fundraising totaled $1.6bn in H1 FY21.

SHOULDERING RESPONSIBILITY

Responsible investing has come a long way from being an esoteric concept to a mainstream concern with companies maturing in key areas to take gulfbusiness.com

important decisions. Private equity, similar to the rest of the business ecosystem, is paying heed to growing trends of sustainable investing in an attempt to build an equitable society and address environmental concerns.

PwC’s Global Private Equity Responsible Investment Survey 2021, that weighed the views of general and limited partners in responsible investment among 209 global PE firms, revealed that private equity is acknowledging ESG (environmental, social and governance) as a driver of value creation. Up to 56 per cent of firms said ESG features in board meetings more than once a year, while 15 per cent said it was discussed at all board meetings. Meanwhile, 72 per cent always screen target companies for ESG risks and opportunities at the pre-acquisition stage, and 66 per cent rank value creation as one of their top MENA venture capital three drivers of responsible investing or ESG activfunding in 2020, up 13 ity, the survey added. per cent from 2019

Over $1bn

WHAT’S NEXT?

With investors harbouring a stronger risk appetite and private equity firms leaning towards change, the PE space seems well poised to leverage opportunities going forward. As the McKinsey report aptly puts it: “In some respects, the PE industry in early 2021 strongly resembles the picture a year earlier: robust fundraising, rising deal volume, elevated multiples. But for the institutions that populate the industry, transformation has come faster than ever, accelerating old trends and spawning new ones.”

August 2021

41

AUG

Prestige

21

POWERED BY

Celebrating excellence The seventh edition of the Property Finder Awards honoured the top brokerages in the UAE, who raised the industry standards thanks to superior service and brilliant performance despite the challenging circumstances Villa is courtesy of an exclusive listing by Espace Real Estate

Cover story

T

he past year has been an exceptionally challenging one for all businesses, as economies worldwide struggled to navigate their way around the uncertainty created by the pandemic. And yet many organisations were able to adapt and excel thanks to persistence and innovation.

At the seventh edition of the Property Finder Awards, the panel of judges sieved through a large number of shortlists to narrow down the winners of the best brokerage. The winners – chosen from across the UAE – stood out because of their sheer commitment to the betterment of the industry by offering exceptional service, high-quality listings and demonstrable success.

The criteria for judging included: Overall structure of the company; adapting to market trends; leveraging technology; future plans; customer experience; and customer feedback.

Based on this, the Property Finder awards for the Best Quality Brokerage were given to: • Espace Real Estate [Dubai large brokerage] • Exclusive Links [Dubai medium brokerage] • Nationwide Middle East Properties [Abu Dhabi] • Hunt & Harris [Ras Al Khaimah] We had a chat with the winners to understand how they have adapted to the Covid economy, their plans ahead and what this award means to them.

John Lyons Managing director, Espace Real Estate

What is your reaction to winning the Property Finder Award?

I think it’s really important. Everyone in the industry recognises that Property Finder does a great awards ceremony and that it’s very objective. There have been years where we obviously haven’t been in the winning position and we have recognised that we have to go back, reassess and work harder to make ourselves a better company.

Everybody – whether they win or lose, or come second or third, know that the decision is objective and not subjective.

There are various different points obviously that the judging panel looks at and we just try to make sure that from one year to the next we get better. When we put in so much work taking the feedback from previous years and then get the win, it’s really encouraging for everyone in the team.

With the real estate sector picking up, how is Espace ensuring that it stands out?

We are trying to diversify our revenue stream – so for example we have set up a mortgage division to vertically integrate that business. We’re also trying to make the business look better from the front end. We’re doing a big project to renew our website, which should be completed in a couple of months.

We are also looking at improving our CRM system – we have 44

August 2021

been working on it since the start of the year and are changing the way it looks and making it more intelligent and more predictive by putting artificial intelligence behind the system.

So, when we roll that out in a couple of months along with the website, we’ll have two really big improvements within the business. One is the front end, how we look from the outside and the other is the main tool that makes us successful as a business in terms of the operations, connecting all the brokers and making that marketplace really efficient.

We’ve got about 130 people in the business in total, out of which about 90 of them are brokers across leasing and sales.

What are your plans ahead?

We’ve set up a team at Downtown Dubai and they have done really well. They have added a huge amount of value to the company and sold some great properties.

We also are now spending more time focusing on the luxury sector. We always did luxury – we have sold some great properties in communities like Emirates Hills over the last 10 years.

But now there’s more of a focus going into luxury, so we have a dedicated team, and we have meetings on a weekly basis discussing luxury real estate.

And since the market has picked up, we’ve sold a lot of properties – including some of the highest value properties in Dubai in recent years – and it’s making a big difference to how we operate. gulfbusiness.com

Cover story

Louise Heatley Managing director, Exclusive Links

What does winning the Property Finder Award mean to you?

I think it’s a benchmark, a goal and something to strive for.

To be recognised by all of your peers – who are amazing and have great reputations – that’s something else.

For us, 2020 in particular was a hard and challenging year.

It’s great when you’re on a wave riding high, but when things are tough and challenges are there, just to actually put it all out and do different things and strive and work [is a big achievement]. The staff stepped up and you want the award for them. I am so proud of them and they really impressed me.

We are always saying the ‘Exclusive Links family’, and they were that, they really had each other’s backs. So winning the award in 2020 was just the icing on the cake, it couldn’t have been better to thank the staff for everything they had done.

As the property sector improves, how is Exclusive Links ensuring that it stands out?

It’s not just about what happened last year – you always have to strive to think outside of the box and be innovative.

We are doing a lot with changing and revamping our website and we’re revamping our CRM systems to be able to help with more lead management for the agents. [This will help us] automate some processes and help the agents be more

“It’s not just about what happened last year – you always have to strive to think outside of the box and be innovative” productive. We also increased our Property Finder package now that growth is there. We utilise the community topspot in Dubai Marina because that’s where one of our strengths is – we have a shop there and it’s a great marketing tool for us as listings are extremely hard for the staff at the moment.

We also introduced Louise’s Lounge, our property talk show.

We’re always saying to our agents, push yourselves, push your boundaries and go on videos. You have to sell yourself, the company and Dubai, property is just the last thing that you need to worry about. So we are doing introductions and personal sales pitches on videos.

What we want to do is to emphasise that Exclusive Links is about personalities – we always say ‘people, profit and personality’. We do it once a month and I’m enjoying it.

Ameen Al Qudsi CEO, Nationwide Middle East Properties

Why is winning the award so important for Nationwide?

The team at Nationwide has worked tirelessly to provide our clients with high-quality services despite the challenges that have been caused by Covid-19. We believe that it is commendable and worthy of an accolade.

How are you looking to upgrade and expand your operations?

It has been a good year for us at Nationwide with over Dhs1m worth of sales recorded in the last year. Although it has been a challenging time, we strive to turn a crisis into an opportunity.

The company has also continued growing as we have increased our staff, despite some competitors in the market downsizing their operations. We have never stopped our efforts in engaging potential clients through marketing campaigns on our website and social media pages. This has helped us capture significant sales deals.

Due to the pandemic, there has been a shift in consumer behaviour. Residents have shifted from apartments to villas since many have been working from home and are looking for more space and amenities such as a garden and an office space.

Our focus has shifted more to selling villa units to satisfy this new trend.

We have expanded our operations into Dubai and Al Ain and our offices are serving a new clientele in these cities and engaging with stakeholders for investment opportunities. gulfbusiness.com

August 2021

45

Cover story

For me, I felt that given that we won the award for three years, Property Finder would give it to someone else. So for the whole team it was just a nice surprise that we won again.

Property Finder does actually value the process.

I look at the stats every single day to make sure the listings are at 100 per cent. We are always on top of it, because for me listings are always top priority. They are the shop window of our business. So it’s always about professional photography, making sure that the listings are of the best quality and have the right information. We strongly believe that as soon as something is rented or sold, it’s taken off immediately.

What are your upcoming plans as the UAE’s real estate market grows?

We believe in consistently training and monitoring our staff to try and do better. They are very good at what they do, they qualify clients, they go out on viewings and they know how to close deals. But for us it’s delving a little bit deeper in terms of how we can assist them a bit more and providing them with the support that they need, whether that’s just additional conversations that the management might have with the buyer or a seller to finish off a transaction at the negotiation stage and possibly even stepping in when somebody goes on holiday to complete the transaction. So it forms a whole process that we feel needs elevating a little bit where management support can really assist our clients as well as the agents.

With the upcoming Expo 2020, there has been a growth of more than 10 per cent in the economy and a rise in the development infrastructure and related projects. As a result, the real estate sector has grown substantially and we at Nationwide are committed to meeting this need.

Also, as we prepare to hit the international market, Nationwide has begun engaging with international investors and encouraging them to purchase property in the UAE for movein or investment opportunities.

Neema Kataria Managing partner, Hunt & Harris

Why is the Property Finder Award so important for Hunt & Harris?

For us, it’s not so much the win – although we do like seeing the trophies in the cabinet – but rather the recognition it provides the team in terms of the effort they put in on a dayto-day basis. It just means that we have done something right throughout the year and maintained the high level of standards that we have.

It was also really important last year because it gave us something to look forward to at the end of the dreadful year that we had.

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August 2021

gulfbusiness.com

Where to stay?

The most sought-out areas in Dubai’s residential real estate market, with details about the average sales and rental rates SALES: APARTMENTS

SALES: TOWNHOUSE/VILLAS

Top 5 searched areas

3 Bed 11.29%

Dubai Marina

4+ Beds 6.85%

Top 5 searched areas

4 Bed 10.54%

Dubai Hills Estate 8.90%

16.80% Downtown Dubai 11.90% Palm Jumeirah

2 Bed 21.49%

SEARCH BY UNIT TYPE

Others 45.31%

Arabian Ranches 7.70%

SEARCH BY UNIT TYPE

Others 60%

Palm Jumeirah

3 Bed 10.89%

6.80%

8.90% DAMAC Hills

Business Bay 6.40% Jumeirah Village Circle 5.60%

Mohammed Bin Rashid City 4.30%

Studio 3.52%

AVERAGE PRICE PER TYPE OF UNIT

2 Bed 6.73%

4.5%

1 Bed 18.39%

AED MILLIONS * AED THOUSANDS

Studio

AVERAGE PRICE PER TYPE OF UNIT

AED MILLIONS

2 Bed 400*

1.4 1.8 1.9

1.1 1.1

650* 730*

1 Bed

3 3.5

3 Bed 650*

1

1.2

1.5

2.1

1.9 2.3 2.7

2 Bed

3.6

8.5

4 Bed 1

1.7 1.8

2.8 2.8

3

3 Bed

3.9 4

9

12.5

4+ Bed 1.3

3 4.8 6.5

2.5

RENT: APARTMENTS

4.9 5.5 5.5

14

RENT: TOWNHOUSE/VILLAS

Top 5 searched areas

4+ Beds 6.47%

Top 5 searched areas 3 Bed 9.55%

Dubai Marina

Jumeirah

12.50%

4 Bed 10.21%

7.4%

Downtown Dubai 7.70%

SEARCH BY UNIT TYPE

Others 40.81%

Business Bay 6.40% Jumeirah Village Circle 5.20% Palm Jumeirah 4.60%

17

2 Bed 21%

1 Bed 22.95%

Studio 5.69%

AVERAGE PRICE PER TYPE OF UNIT

AED THOUSANDS

Studio

Dubai Hills Estate 6.3%

SEARCH BY UNIT TYPE

Others 51.65%

Umm Suqeim 5.4% Arabian Ranches 5%

3 Bed 19.88%

2 Bed 11.79%

The Springs 4.4%

AVERAGE PRICE PER TYPE OF UNIT

AED THOUSANDS

2 Bed 30 42

45

63

70

90 95 110

1 Bed

135

3 Bed 44

60

70 80

110

130

2 Bed

140 145

160 160

4 Bed 64

88 100

125 130

150

3 Bed

180 180 190

250

4+ Bed 86

120

147 178 200

180

230 250 250 275

SOURCE: PROPRIETARY PROPERTY FINDER DEMAND DATA, H1 2021

gulfbusiness.com

August 2021

47

Luxury Report

Looking at super prime properties, there were 22 homes worth Dhs35m or more sold in the first five months of this year, a volume not witnessed since 2015. In fact, in April, 3 per cent of the Dhs10.97bn in sales recorded in Dubai’s property market were at a price point of Dhs10m or higher.

It is a great time to be in the penthouse market, with units in One Palm and W Residences proving to be quite popular. As projects such as The Residences Dorchester Collection and Atlantis, The Royal Residences get closer to completion, we are seeing very high levels of buyer interest in them as well.

Villa sales across the city have been particularly robust, with data released by Property Finder revealing that one in three properties sold in the first quarter was a villa or a townhouse.

A N A LY S I S

Riccardo Scala Head of Luxury Sales & Leasing, Luxury Properties

Lavish growth Dubai’s luxury property segment is booming, with price no criteria for the right residence

T

hese past six months have been filled with superlatives in Dubai’s luxury property market, from incredible new properties coming on the market to record-shattering transactions. After the rollercoaster that was 2020 – from fears of the market plunging into chaos in March to the shattering of a seven-year record in November – we had predicted that 2021 would be the year of super prime real estate. Thus far, the year has not only met that prediction, but greatly exceeded it.

48

August 2021

“FAR TOO OFTEN, SELLERS HAVE BEEN BURNED

BY BROKERS WHO BRING IN UNQUALIFIED CLIENTS, TRYING TO PUSH A DOWNWARD NEGOTIATION ON PRICE AND OFTEN LEADING TO UNREASONABLE OFFERS” Palm Jumeirah has been a hotbed of activity, and some of the best frond villas have been disappearing off the market with remarkable speed. I was very delighted to be involved in two of this year’s most expensive sales so far – both on Palm Jumeirah with a selling price north of Dhs100m each.

These transactions occurred within a few weeks of each other, and really highlighted how quickly that segment of the market is moving right now.

There have also been other transactions at a comparable level for other frond villas in Palm Jumeriah and in areas such as Dubai Hills Estate.

We have been fortunate to end H1 with the sale of a magnificent custom-built villa for an undisclosed sum – as a matter of discretion, I cannot reveal further details at this point.

But what we are seeing is that buyers who are very keen to purchase a property in Dubai are not put off by the price. The city has become something of a safe haven during the pandemic, offering a welcome respite from the rolling lockdowns gulfbusiness.com

Opinion/ Residential

that continue to pop up across Asia and parts of Europe. Anyone who frequents Dubai – even for a few months a year, is now looking to call it their home. And at prices that are far cheaper (and offer far greater value) than what you would find in London, Monaco or Hong Kong, there is no better time to buy.

MUM’S THE WORD

Discretion has become more important to our selling clients than ever before in 2021, especially those who are at the higher end of the market.

Owners of high-end properties who wish to sell are increasingly preferring to keep their home out of the public eye, marketing them exclusively with one agent.

Far too often, sellers have been burned by brokers who bring in unqualified clients, trying to push a downward negotiation on price and often leading to unreasonable offers that cause a deal to fall through and extend the selling timeline of the property. By being more selective about who they work with and limiting the exposure of their property, sellers are able to ensure that only qualified clients walk through their door, which in turn greatly increases the chances of selling at the asking price.

Our Private Client Office is a division of the company that caters specifically to our most high-end clients, and we have been approached by quite a few sellers over the past few months who wish to keep their properties off the market.

Working alongside them, we can create a tailored marketing plan that aligns with their goals and their timeline for selling the property. We also follow a very rigorous qualification process for potential buyers to weed out window shoppers and discount seekers.

OUTLOOK

It is predicted that property prices will rise for the first time in six years, which is a shift that we had expected to happen last year, before global circumstances changed.

The property market in Dubai has always been resilient, and I think it’s fair to say that everyone was surprised at just how quickly it bounced back in the latter half of 2020.

Looking ahead, I do not see any slowdown in activity over the short to medium term at least, and it is safe to say that our Private Client Office will be especially busy dealing with both highend buyers and sellers to produce a few more record-breaking transactions before the end of the year. gulfbusiness.com

A N A LY S I S

Gil Van Gelder Sales director, eSpace

The ‘perfect storm’ Three main factors supported the phenomenal growth of the secondary residential market this year

A

s we entered 2021, it was impossible to predict the long-term impact that Covid-19 would have on the Dubai property market. Compared with many parts of the world, Dubai’s tight restrictions of lockdown were thankfully behind us. All things considered, there is no doubt that 2020 ended well. By year-end, with pricing in the market escalating, along with buyer appetite, and indications of house prices bottoming out in the secondary residential market, the overall sentiment was positive. However, there was still a level of uncertainty at the start of 2021.

Thankfully, it wasn’t long before optimism prevailed – as the government strongly supported businesses and economic growth, demand continued to rise. Added to this, Dubai’s phenomenal handling of Covid-19 challenges, including a seemingly watertight vaccination plan, further boosted confidence.

Soon we were seeing transaction figures reach highs August 2021

49

Opinion/ Residential

that had not been seen in decades, with a multitude of factors contributing to this ‘perfect storm’.

Three key factors included: 1. Loan-to-value increasing to 80 per cent for first time buyers

Only having to make a 20 per cent down payment made a massive impact on buyer demand – it was suddenly far more affordable to get on the property ladder.

2. Interest rates at an all time low

Flexible financing solutions from many of the region’s banks further encouraged buyers to enter the market. We saw some exceptional offers from lenders in Dubai, reflecting a trend which has been witnessed globally.

3. Desire to own your own space

Demand to own property is higher than ever, with month-on-month record transfers being registered by the Dubai Land Department.

Even with the memories of lockdown fairly distant, we saw a fundamental shift in people’s perception of homes. Having personal space to feel safe, spend valuable time with family, and comfortably work from home has become more important than ever.

We saw many active buyers searching for homes with considerable outdoor space. But it wasn’t just secondary market villas and townhouses that saw a rise in demand; apartments with large balconies proved to be a huge USP for those still looking for the high-rise lifestyle.

The above factors, with the ongoing desire to own instead of rent, has driven the market forward. Most areas in Dubai have seen increased valuations – we even saw year-on-year hikes of 35-40 per cent in certain places.

All segments – including the luxury market – have seen substantial growth. Many investors are also looking to the short-term rental market for substantial returns, with this type of property seeing net ROI of 10 per cent.

NOW IS THE TIME

There’s no denying that the first half of the year has exceeded expectations. I strongly believe that the remainder of 2021 will continue to see growth.

A steady buyer appetite will keep the demand healthy. And we can expect to see more sellers materialise as prices reach far more attractive levels compared with the record lows of last year.

I don’t see the market slowing down anytime soon. In the 10+ years of experience I’ve gained as a real estate broker in this unique property market, I believe the economic climate has never been more favourable to buy.

50

August 2021

Edward Millward Managing director, D&B Properties

A N A LY S I S

Calling all investors Dubai’s residential market is seeing growing interest from international investors due to its robust fundamentals

T

he UAE has recovered faster than most countries from the early days of the pandemic. The work here has been outstanding, with precautionary measures in place and a successful nationwide vaccine rollout. This has attracted many people from around the world to relocate to the UAE and enjoy a more stable lifestyle.

In line with that, 2021 has been an excellent year for the Dubai real estate industry. We now have good momentum from a strong market rebound in all real estate segments – residential, gulfbusiness.com

Opinion/ Commercial

rental and off-plan.

Over the last 12 months, strong demand for villas and townhouses has caused a huge upward trend, with apartments expected to follow this trend in the second half of 2021, especially in prime areas such as Palm Jumeirah, Dubai Marina and Downtown Dubai.

This year, all of the major property developers in Dubai including Emaar, Damac, Dubai Holding and Majid Al Futtaim have had very successful new launches, with units selling out fast in communities such as Emaar Beachfront, Arabian Ranches III, Damac Hills, Port De La Mer and Tilal Al Ghaf. Dubai developers are offering apartments and villas on attractive payment plans to new investors from all around the world.

There is also a wide range of inventory of excellent off-plan properties to choose from, ranging from modern beach/waterfront homes to new contemporary villas in the suburbs, right next to a championship golf course.

New properties and communities are constantly evolving and improving. Developers are providing modern designs and better amenities, reducing the high costs of property renovation.

Over the next four to five years, many of the original residential communities will be surpassed by areas such as Dubai Hills Estate and Dubai Harbour. These are now the major hotspots for investors and future end-users.

Planning to relocate or move cash/wealth to Dubai has never been more attractive. The opportunity to purchase a premium asset/property in a prime area of the city is now very easy and affordable. This kind of a real estate market will always appeal to investors on a global scale.

We have already seen a huge influx of overseas investors moving into Dubai in 2021 and this will most likely continue. Many countries in Europe are still suffering because of a lull in tourism and a dull post-pandemic economy. Economists continue to warn of an increase in inflation, therefore many investors are opting to shift their portfolios to the real estate market in Dubai.

During these extraordinary and uncertain times, there are not many countries around the world that can offer: • Safety and security • Excellent infrastructure • Tax-free, stable economy • Capital appreciation and strong yields • High-quality lifestyle for all nationalities With the continued success of real estate in 2021, the best way to predict the future is to build it. Therefore, the best plan is off-plan. gulfbusiness.com

Robert Thomas Head of Agency, CORE Real Estate

A N A LY S I S

Changing landscape The pandemic altered our ways of working, but offices are most likely here to stay

T

he onset of Covid-19 has accelerated the adoption of previously nascent trends, none more discussed than working from home and its effect on the workforce and commercial real estate. As the world gradually inches backs to normalcy and vaccine rollouts prove to be effective, we have seen the initial knee-jerk reactions dissipate with multinational firms championing the return of employees back to the workplace. For example, the CEO of Goldman Sachs has signalled his determination to have his bankers back behind their office desks, calling home working an “aberration” that must be corrected “as soon as possible”.

Additionally, many Fortune 500 CEOs are also echoing this sentiment and stressing the limitations of virtual work. These C-suite executives are increasingly raising concerns around loss of peer learning, collaboration, and mentorship, which is almost impossible to replicate virtually due to the lack of interaction and spontaneity that arises when people are physically together. We have witnessed global tech firms such as Google and Amazon pivot from their original positions and emphasise in recent months that while they are flexible to a hybrid workplace solution, the aim is to return to an office-centric culture as they August 2021

51

Opinion/ Commercial A N A LY S I S

believe it enables employees to invent, collaborate and be efficient. That said, most global occupiers across sectors agree that they expect to reduce their real estate footprint going forward as they move to a more open arrangement and use technology to manage seating and conference rooms. It is yet to be seen how the increased spacing required due to social distancing will impact the overall office portfolio as this could offset the reduction in total space.

The pandemic also accelerated the adoption of various digital solutions, marking an increase in the technology sector workforce. While many can work remotely, we are witnessing this translate to an increase in spatial requirements as most new office demand now stems from the tech sector in the UAE. Globally, technology and allied sectors are the new major tenants, superseding the financial and service industries. A similar acceleration is being witnessed in the retail logistics sector as online retail penetration increases rapidly – and we expect more players to expand their omnichannel offering – translating to an increased demand for last-mile delivery, fulfilment centres and warehouses.

Due to the ancillary effect of people spending more time at home, we have witnessed the burgeoning commercial real estate trend of dark/cloud kitchens gather pace to become a defined retail segment. This trend has been aided by the technological, logistical and marketing support provided by online delivery platforms such as Zomato, Talabat, Deliveroo and Careem. These shared kitchen concepts allow F&B operators to adapt to the market while keeping their costs lower than a traditional dine-in restaurant. While most existing F&B outlets are now fully operational, the convenience and promotional incentives offered by online platforms suggest that cloud kitchens will continue to perform as an asset class. The commercial landscape has and will continue to undergo changes driven by technology and a workforce with differing expectations. It will become critical for our offices to create a sense of place and an environment that is conducive to creating an effective workforce.

52

August 2021

Emrah Yar Head of Commercial, Allsopp & Allsopp

Time to buy Dubai’s commercial market is transitioning from lettings to sales. Here’s why

T

he commercial real estate market in the first half of 2021 has been extremely active. Both buyer and tenant enquiries for properties have been through the roof and we have also seen more sales than usual. The commercial market is usually made up of 85-90 per cent lettings transactions compared to only 10-15 per cent of sales transactions.

But this quarter, we’ve seen this change significantly to around 60 per cent lettings and 40 per cent sales.

We are seeing more tenants looking to make the switch to buying office space because of the growth of their business and greater awareness about the value of commercial real estate in Dubai. Some offices in Dubai have been leased for several years, and most of these businesses could have paid off for their office space with the amount they have paid their landlord in rent.

The number of sales enquiries we’ve had in Q2 has increased by 122 per cent year-on-year and 57 per cent compared to Q1 2021, while enquiries for lettings has risen by 88 per cent year-onyear and 66 per cent quarter-on-quarter.

Amongst these enquiries, we have had buyers unsure on committing and the commercial team have had a lot of educating to do. There are so many rewards to be gained from buying a commercial space – in fact the return on investment can even be much higher than that of a residential purchase.

For example, we recently sold an office with a sitting tenant in JLT for Dhs6.2m that generated a net return of 9.3 per cent for the purchaser. Often, by looking at

the tenant’s profile, you can get a rough idea on how long they will be there as most companies will have a three- to five-year plan – this is where investors turn to commercial over residential as they can provide a much higher ROI and a more stable tenant, resulting in a more stable income.

The buyers we see coming from outside of the UAE have been lured by the way Dubai has navigated through the pandemic with only a brief but strict lockdown. The city has continued to operate to a degree where many businesses have been able to survive and, in some cases, grow and emerge.

A lot of the companies that are buying commercial properties are holding companies who operate in several industries. They are setting up a hub in Dubai as they see this as one of their safest options.

The city is already a global hub and is easily accessible, making it the perfect place for a business.

The commercial market is performing much like the villa communities in Dubai. If a unit becomes available for let or sale in a good condition, desirable location and at an attractive price, it is taken straight away. These spaces are becoming few and far between.

If you need a property of between 800 sqft and 1,100 sqft which would cater for around eight to 10 employees – there will be many offices available. If you have a company with 25 to 30 people requiring an office of between 2,500 sqft and 3,500 sqft, there will only be a few properties available in a desirable location.

There is a significant undersupply for these spaces. gulfbusiness.com

Opinion/ Mortgage

A N A LY S I S

Brendan Kennelly Senior mortgage consultant, Mortgage Finder

Take the home financing route Dubai’s mortgage market has seen significant changes in the past few years, making it more accessible and attractive

D

id you know it is possible to increase your buying potential by up to 24 per cent when you purchase property with a mortgage in Dubai? This is something buyers and real estate agents are often unaware of, but is something that can make a huge difference and make investing more achievable.

The mortgage process in the UAE is still confusing for many. Often potential buyers do not understand the process or have heard false accounts about how it works. However, mortgage products

gulfbusiness.com

have never been so competitive, and the market has also seen significant changes in the past few years, making it more accessible and attractive.

The most notable change was the 5 per cent increase in loan-to-values for first-time buyers introduced in 2020. This means that banks can now lend buyers 5 per cent more, therefore reducing the down payment required for a mortgage from 25 per cent to 20 per cent for non-nationals and from 20 per cent to 15 per cent for UAE citizens. With the down payment requirement being one of the most significant hurdles to buying, this decrease makes a big difference. As an example, if purchasing a property of Dhs1m, this reduction means a saving of Dhs50,000 in cash required upfront.

In addition to the changes in loan-to-value ratios, mortgage interest rates have also become more competitive. The current lowest three-year fixed rate now sits at 2.49 per cent compared to 3.33 per cent in early 2020.

All of this makes getting a mortgage better for buyers. However, the final area which can make a massive difference is the ability to include the fees associated with buying within the mortgage.

Many buyers forget the fees that come when purchasing property, such as Dubai Land Department fees and agent commissions. In Dubai, the fees add up to approximately 7 per cent of the property value.

The good news is that it is possible to include nearly 5 per cent of fees within the mortgage.

So, for those that do not have this cash ready, it removes some of the burden, as you only require approximately 2 per cent of the property value to cover the fees.

For those who do have the cash for the fees, the news is even better. By including the fees within the mortgage, then adding the cash saved here to your down payment, you could see your buying potential rise by up to 24 per cent. For example, if you have a down payment of Dhs500,000 plus the 7 per cent in fees ready, then you can purchase a property of Dhs2.5m. Opting to include the fees within the mortgage and adding the cash saved from this to your down payment could see your buying potential rise to Dhs3.1m.

Given the recent increase in property values across several prime areas in Dubai, including the fees in your mortgage could make buying that dream home a reality. This, coupled with the added benefit of mortgage interest rates in the UAE being at the lowest in years, means there has never been a better time to investigate your mortgage options.

August 2021

53

Mo’asher

THE OFFICIAL SALES PRICE INDEX FOR THE EMIRATE OF DUBAI

JUNE 2020 -JUNE 2021

INDEX NUMBER

KEY FINDINGS • The June monthly index recorded 1.07, while the apartments index stood at 1.088 and the villas/ townhouses index at 1.013 • Sales transactions in June 2021 were up 44.33% in terms of volume and 33.2% in value compared to May 2021 • Q2 2021 recorded the highest quarterly volume of sales transactions since Q4 2013, with 15,638 deals worth Dhs36.86bn

DUBAI OVERALL INDEX Index value Dhs1,066,791

Index value Dhs1,017,352

Index value Dhs1,016,541

1.2 1 0.8 0.6 0.4 0.2

INDEX BASE JANUARY 2012=1

Jun 2021

May 2021

Apr 2021

Mar 2021

Feb 2021

Jan 2021

Dec 2020

Nov 2020

Oct 2020

Aug 2020

Sep 2020

Jun 2021

May 2021

Apr 2021

Mar 2021

Feb 2021

Jan 2021

Nov 2020

Oct 2020

Sep 2020

Jun 2020

0 Jun 2021

0 May 2021

0.2

Apr 2021

0.2

Mar 2021

0.4

Feb 2021

0.4

Jan 2021

0.6

Dec 2020

0.6

Nov 2020

0.8

Oct 2020

0.8

Sep 2020

1

Aug 2020

1

Jul 2020

1.2

Jun 2020

1.2

Index value Dhs1,822,343

Index value Dhs1,678,567

Index value Dhs1,610,700

Index value Dhs904,476

Aug 2020

Index value Dhs953,616

Jul 2020

Index value Dhs1,002,770

DUBAI VILLAS/TOWNHOUSES INDEX

Dec 2020

DUBAI APARTMENTS INDEX

Jul 2020

Jun 2020

0

Going strong THE AREAS IN DUBAI THAT RECORDED THE LARGEST NUMBER OF RESIDENTAL SALES TRANSACTIONS IN THE FIRST HALF OF THE YEAR APARTMENTS

VILLAS/TOWNHOUSES

OFF-PLAN

OFF-PLAN

Jumeirah Village Circle

TOTAL VALUES (H1 2021)

960

Mohammed Bin Rashid City

543

Mohammed Bin Rashid City

831

Dubai Land

333

Jumeirah Lake Towers

790

Arabian Ranches 3

217

Meydan

742

Rukan

126

Business Bay

629

Tilal Al Ghaf

85

Dubai Harbour

508

Arabian Ranches 2

83

Downtown Dubai

452

Dubai South (Dubai World Central) 83

Al Jaddaf

419

Dubai Hills Estate

52

Palm Jumeirah

371

Town Square

52

Jumeirah

48

Arjan

363

SECONDARY

IN AED

61,969,687,231 SALES

Off-plan 9,939 units

Secondary 17,434 units

SECONDARY

Dubai Marina

1,339

Dubai Hills Estate

408

Business Bay

978

Nadd Al Sheba

398

Downtown Dubai

719

Green Community

329

Jumeirah Village Circle

598

Arabian Ranches

241

International City

551

Al Warsan

226

Palm Jumeirah

494

Akoya

226

Jumeirah Lake Towers

494

Town Square

221

Town Square

494

The Springs

211

Dubai Sports City

437

Mudon

158

Jumeirah Beach Residence

361

Palm Jumeirah

152

70,269,409,571 MORTGAGE

Off-plan 98 units

Secondary 10,757 units

SOURCE: DUBAI LAND DEPARTMENT

ABU DHABI OVERVIEW

ASKING PRICES INDEX NUMBER

ABU DHABI LISTING PRICE INDEX (BASE YEAR: MAY 2018) Sales – Apartment

1.4

Sales – Villa/Townhouses

1.2

0.6

0.6

gulfbusiness.com

Jun 2021

May 2021

Apr 2021

Mar 2021

Feb 2021

Jan 2021

Dec 2020

Nov 2020

Oct 2020

0 Sep 2020

0 Aug 2020

0.2 Jul 2020

0.4

0.2 Jun 2020

0.4

Jun 2021

1 0.8

May 2021

1 0.8

Rent – Villa/Townhouses

Apr 2021

1.4 1.2

Mar 2021

1.4 Rent – Apartment 1.2

Feb 2021

0

Jan 2021

0

Dec 2020

0.2

Nov 2020

0.4

0.2

Oct 2020

0.6

0.4

Sep 2020

0.6

Aug 2020

1 0.8

Jul 2020

1 0.8

Jun 2020

1.4 1.2

August 2021

55

Outlook

Strong foundation The UAE’s property market – and specifically Dubai’s – witnessed record sales in the first half of the year on the back of pent-up demand during the pandemic and a progressive regulatory framework. What comes next? Lynnette Sacchetto, director of Research and Data at Property Finder, reveals more details

C

ovid-19 was a growth accelerator for real estate around the world, with many mature markets experiencing high demand and low supply. The UAE witnessed a similar trend. As we saw during the course of 2020, the UAE’s real estate market did quite well – especially in the residential sector. This year also started off strong, with sales transactions continuing to increase month-on-month as demand continues to rise.

There were many factors as to why the real estate market thrived despite the pandemic. Proactive government incentives such as special investor and retirement visas, golden long-term visas, as well as the reduction of the loan-to-value (LTV) for first time homebuyers to 20 per cent by the UAE Central Bank gave a significant boost to the industry. Low interest rates, competitive mortgage products and attractive housing prices also supported the market.

According to Firas Al Msaddi, CEO of fam Properties, “We have seen a much better overall market sentiment due to the built-up demand during the lockdown. This, combined with the positive trends for villas, townhouses and waterfront properties, has massively contributed to lifting the spirits of

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investors and boosting their confidence. All of these factors have increased the number of sales transactions across all segments of real estate in Dubai.”

The other factors that came into play was that for many people, during the pandemic, their homes became their places of work, a school for the kids and the sole place for entertainment and dining. Therefore, we saw a huge surge in many residents wanting to upgrade their living experiences by either opting for larger homes or moving from apartments into villas/townhouses with gardens and outdoor spaces.

Al Msaddi adds, “[Demand for] waterfront and, in particular sea- and beach-front apartments, is another trend driven by the subconscious fear of another lockdown. People now appreciate the living experience more than ever before.”

The rental and sales markets seemed to have moved in parallel for the villa/townhouse sector, especially in prime, popular areas.

According to Simon Baker, managing director at haus & haus, “One big trend we have seen is that the rental rates of villas and townhouses in Dubai have rebounded strongly in the last six months as demand now outweighs supply. In fact, prices have increased by as much as 30 per cent in some communities.

This increase follows the trend Firas Al Msaddi of sales prices, where on average the increase in apartment rentals rates is trailing that of villas.”

Abu Dhabi also followed the same trends, reveals Kika Pavese, managing director of MD Real Estate. “The challenge in Abu Dhabi is that the supply of villas is currently low, putting the seller at a distinct advantage when it comes to setting selling prices in areas like Saadiyat Island and Yas Island. In contrast to this, we see other areas like Al Reem Island, where an oversupply of units has created a buyer’s market where the roles have reversed, and buyers are at a distinct advantage when it comes to price negotiation.”

Ben Crompton, managing partner of Crompton Partners Estate Agents adds, “The current trend in Abu Dhabi real estate across both leasing and sales is the resurgence in prices for villas, and the continued struggles of the mid and lower apartment market. The pandemic and lower interest rates seem to have spurred the market for outdoor spaces, gardens and communities, boosting prices and occupancy rates. Job losses and good supply levels have kept apartment rates suppressed.”

Another factor that has supported the villa/townhouse market is that due to pandemicrelated restrictions, many people have been able to save Simon Baker gulfbusiness.com

Outlook

yet to gain traction. “Short-term rentals is still a very new concept in Abu Dhabi but it is growing. We should see early movers reap the benefits before the market settles down into an orderly pattern. Locations next to tourist hubs like Yas Island should see most of the benefit,” explains Crompton.

Home, sweet new home Dubai registered an uptick in sales transactions in H1 Off-plan Volume

Secondary Volume

956

January

2365 1247

February

2532 1711

March

2924 1933

April

2891 1674

May

2752 2418

June

3970 0

1000

2000

3000

4000

more money, putting them in a good position to buy a property when lockdowns eased – which is exactly what we saw in sales transaction data.

“Clients have also realised that it would be more profitable for them to be homeowners instead of tenants due to the flexibility in payments offered Kika Pavese by banks in comparison to the lower flexibility provided by landlords,” explains Pavese.

Another trend that has carried over into 2021 is the demand for short-term rentals in Dubai with visitors gearing up for Expo 2020.

According to Baker, “Towards the end of 2020, we saw a surge in demand for short-term and monthly rentals from both tourists and residents looking for a more flexible furnished option without the requirement of a year-long contract. Our occupancy rates over the last six months have been close to 100 per cent, and we are searching for more properties as we near Dubai Expo 2020, set to begin in October this year.

“There’s also a trend for people wanting properties with more space as guests look to ensure social distancing with any adhoc visitors – plus after a year of reduced travel, having plenty of space and luxury in a holiday/short-term rental is extra appealing.”

However, in Abu Dhabi, the short-term rental market has Ben Crompton gulfbusiness.com

Dubai Residential Market In Dubai, January 2021 kicked off with the highest number of secondary/ready market sales transactions in a single month over the past few years. The next five months also continued to break records, and the trend doesn’t seem to be slowing down. In fact, June recorded 6,341 real estate sales transactions worth Dhs14.76bn – the highest since January 2014 – marking a 320 per cent increase compared to June 2020 and a 92 per cent rise compared to June 2019.

Overall, the first half of 2021 had 27,245 real estate sales transactions worth Dhs61.67bn – the highest since H1 2014.

Specifically, Q2 also recorded 15,599 real estate sales transactions worth Dhs36.83bn – also the highest in seven years.

Going into the second half of the year and 2022, we expect to see the prominent trends continue. The increase in demand for villas/townhouses will continue to drive prices higher in this sector while low interest rates and competitive mortgage products will also have a positive effect for buyers in the market, especially end-users looking to live in the property.

Al Msaddi says, “I don’t think that 2022 will witness a price increase for villas, townhouses and luxury properties at the same ratio and speed as last year, but it will most likely continue to increase in a very healthy way that is grounded in real end-users demand and not speculators. On the other hand, I would expect a higher price increase ratio for well-located and well-maintained projects in areas like City Walk, Dubai Marina, Downtown Dubai and Business Bay that still did not achieve their fair price point due to the strong supply and the high annual service charges. The unevenness between

The retail market was repurposed/redefined during the pandemic, prompting collaboration between online and brick-and-mortar and making it more customer-driven August 2021

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Outlook

the supply and demand for in-land apartments is a blessing for those who wish to invest in the real estate market today, because it won’t last forever.”

Dubai Commercial Market Commercial real estate was probably the most impacted by the pandemic. Offices were left empty as employees were working from home and many businesses decided to scale down their offices, some entirely. However, on the flip side, we also saw some businesses look for larger offices to accommodate social distancing measures and implement a better working environment.

Andrew Love, partner and head of Capital Markets and Occupier Services and Commercial Agency for Knight Frank comments, “Understandably the sectors most reliant on people traffic were the worst impacted by the pandemic – retail and offices in particular saw occupational rates fall and defaults rates rise, particularly in older Grade B office buildings, but that is changing rapidly as global lockdowns ease and we start returning to a sense of normality. Ultimately there is no replacement or alternative to being in an office environment with co-workers.

“The exchange of knowledge capital cannot be replicated virAndrew Love tually. Ultimately there will be some sectors where a (work from home) WFH culture becomes the norm, but it’s more likely that we will see hybrid working patterns adopted. Either way, the function of an office has likely been altered permanently – there will be places that businesses 58

August 2021

use to showcase themselves to clients and future talent; places for true innovation and collaboration; and places that put employee well-being at the heart of operations, with safety, security and ESG all top of priority lists.”

The pandemic has also catapulted co-working spaces to the limelight as they offer several advantages in the current scenario.

“Business centres and co-working spaces have been around for a while, however many businesses [have now] realised that they do not need to keep the cost of having a 500-1,000 sqft office when they can use business centres at a fraction of the cost while keeping the flexibility that the current business environment requires,” states Ben Bargh, director of CRC. The retail market was repurposed/redefined during the pandemic, prompting collaboration between online and brick-and-mortar and making it more customer driven. Hospitality was also affected as tourism and corporate travel was significantly reduced. With that said, the warehouse and cloud kitchen sectors did well as more consumers and businesses were going online.

“One particular and growing asset class we are seeing in the region are data centres. As lockdowns continue to persist across the world, the amount of data we are consuming is increasing, particularly through streaming services such as Netflix, Apple TV and Amazon Prime. As the digital evolution Ben Bargh continues with online shopping, this trend is only going to continue. As a result, this data needs to be stored somewhere,” explains Love.

“Data centres bring their own challenges; they consume a vast amount of power and they generally need to be in the city or as close to the city as possible. They need to be designed in a certain way so that there is an adequate floor to ceiling height; security; provision for cooling; and back-up power supply. We are now seeing developers rethink how they design some office buildings, on the basis that a floor or more could be a data centre. As an asset class, the end-users tend to have very strong covenant strengths and are willing to take much longer leases i.e., 20-30 years. This is why they are now becoming so attractive to institutional investors who seek security of income.”

Bargh concludes, “As we are heading toward the opening of Expo 2020 in less than 100 days, we are very optimistic that from the end of 2021 through 2022, there will be better recovery and growth for the commercial real estate sector and this is backed up by the statistics published from Dubai Economic Department and DMCC, a leading free zone in Dubai, showing a huge jump in the number of new trade licences issued in 2021.” gulfbusiness.com

AUG

Lifestyle

21

Making scents

When Hermès decided to introduce its first all-new men’s fragrance in 15 years, in-house perfumer Christine Nagel knew what she had to do to raise the bar p.64

“The Middle East is a very important market for us. We currently have over 40 boutiques and retail partners in the Middle East region” Christoph Grainger-Herr, CEO of IWC Schaffhausen

gulfbusiness.com

Louis Vuitton Horizon Light Up Speaker It features a threeinch subwoofer, two 0.75-inch tweeters and three microphones to support voice calls as well August 2021

59

Lifestyle / Horology

Flight path Christoph Grainger-Herr, CEO of IWC, is at the helm of one of the most high-profile Swiss watchmakers – and he’s repeatedly proving that he isn’t short on product or business innovation ideas

BY VARUN GODINHO

F

or many, pinpointing the exact moment when their fascination with watches kicked in is difficult – but that isn’t the case with Christoph Grainger-Herr, CEO of Swiss watchmaker IWC Schaffhausen. Precisely at the age of 3, he remembers accompanying his father to a jewellery shop. Unable to purchase a watch of his own like his father had, the little boy was handed a conciliatory stuffed toy Bernhardiner dog instead, which he – tellingly – named Patek.

Skip forward a few years, while the interest in watches didn’t wear thin, Grainger-Herr didn’t set out to make a career of it. He studied interior design at Bournemouth University in England and became immersed in the concept of luxury, when during a placement year in London he was given the opportunity to design a gentlemen’s accessory store. “At that point, I became obsessed with creating shops for luxury goods. It was not long after I had started a new job as an architect in Zurich when I was contacted by Richemont and asked to design the museum that they were planning for IWC in Schaffhausen,” he told Gulf Business recently in an exclusive interview. “I guess they liked my work because I was offered a job in the trade marketing department.”

That he was offered the job was only one half of the story – the person whose attention he caught when designing the museum, and who made that offer, perhaps had a far more overarching impact on the path that his career was about to take. It was none other than the maverick former IWC CEO Georges Kern who asked Grainger-Herr to part with his job as an architect at Smolenicky & Partner Architektur in Zurich and come on board IWC full-time. “That was back in 2006. Since then, I have held

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various positions in different departments.

I worked as head of marketing, executive brand architect, associate director strategic planning, and associate director retail, and international sales architect,” he notes.

Working his way through the entire gamut of administrative roles, in close coordination with Kern, left him in a commanding position to take over as CEO of IWC in 2017 when Kern left Richemont to take up the top job at Breitling.

A change of guard at IWC, which traces its roots back to 1868 when American watchmaker and engineer Florentine Ariosto Jones travelled from Boston to Schaffhausen with the idea of combining traditional Swiss craftsmanship with advanced manufacturing methods, could go either way. But Grainger-Herr steadied the ship and proved his mettle – according to a report published this March by Morgan Stanley and LuxeConsult, IWC recorded around CHF540m in turnover last year, and was one of only two Richemont brands (Cartier being the other) to rank among the top 10 Swiss watch brands with the highest annual turnovers.

There are six core collections within IWC’s stable. It includes the Pilot’s Watches, Portugieser, Portofino, Da Vinci, Ingenieur and Aquatimer. Every year, the watchmaker picks one of the six collections and overhauls it – 2021 was the turn of the Pilot’s collection.

This year’s novelties included the Big Pilot’s Watch that was for the first time offered in 43mm, powered by the in-house 82100 calibre featuring the Pellaton winding system with ceramic components in the movement. The Pilot’s Watch Chronograph meanwhile was given the 41mm treatment (backed by an IWC-manufactured 69385 calibre column-wheel chronograph movement). But it’s the perpetual calendar complication that usually steals the show at IWC each year, and with good reason.

It was the Da Vinci Perpetual Calendar from 1985 that most definitively signalled IWC’s swing to focus on high complications.

That specific model was courtesy of IWC’s master watchmaker Kurt Klaus – regarded in the same breath as watchmaking legends including Gérald Genta or Günter Blümlein – who took a base Valjoux 7750 chronograph movement and made the first perpetual calendar movement whose calendar indications and moonphase were all controlled via the crown itself. It’s worth remembering that the perpetual calendar at IWC is mechanically programmed to automatically recognise the different month lengths and the leap years without requiring any manual adjustments until the year 2100.

This year’s Big Pilot’s Watch Perpetual Calendar in stainless steel with a blue dial is fitted with IWC-manufactured 52615 calibre, and the Big Pilot’s Watch Perpetual Calendar Top Gun Edition Mojave Desert features the 52000 calibre and shows that IWC still regards the perpetual calendar as central to what it does.

The brand, under Grainger-Herr, has also been pushing forward consistently on the material innovation front. “In the 1980s, we pioneered the use of titanium and ceramic in the watch industry. More recently, we introduced Ceratanium, which combines the lightness and structural integrity of titanium with a hardness and scratch-resistance similar to ceramic in a groundbreaking new material.”

But what is likely set to be a real game changer for IWC, and quite possibly Grainger-Herr’s legacy itself, is the new gulfbusiness.com

Christoph Grainger-Herr, CEO of IWC

Lifestyle / Horology

Opposite page: IWC Big Pilot’s Watch Perpetual Calendar

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August 2021

61

Lifestyle / Horology

engineering division within its facility in Schaffhausen called IWC Experimental.

“The Big Pilot’s Shock Absorber Watch XPL is the first brainchild of IWC Experimental, and is the first watch to feature our patented new shock absorber system. Developed over eight years, the Spring Protect system is based on a cantilever spring that suspends the movement inside the case. Thanks to its use of a bulk metallic glass, the spring protects the movement against the g-forces generated during impacts on the watch. In impact tests conducted at the Cavendish Laboratory at the University of Cambridge, protected movements have survived accelerations in excess of 30,000g.”

On the subject of g-force, it’s difficult to gloss over the fact that IWC partnered with major g-force producer Mercedes-AMG back in 2004, and with Mercedes-AMG Petronas Motorsport F1 in 2013. “Our motorsport partnerships have inspired some truly unique timepieces. The latest is the Pilot’s Watch Chronograph Edition AMG featuring a case made of automotive degree 5N titanium and a carbon fibre dial. Our partnership with the F1 team has also seen some exciting developments. An example is the Big Pilot’s Watch Perpetual Calendar Edition Lewis Hamilton which we developed with seven-time F1 world champion Lewis Hamilton,” notes Grainger-Herr.

S

ustainability has become a buzzword among businesses, with the luxury industry as a whole more eager and enthusiastic to embrace it than it has ever been before. This year, IWC introduced the concept of paper-based TimberTex watch straps that are 80 per cent composed of natural plant fibres, with cellulose obtained from managed forests and tree farms in Austria and Scandinavia,

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This page: (clockwise) The Big Pilot’s Watch Perpetual Calendar Top Gun Edition Mojave Desert; Big Pilot’s Watch with a Racing Green Dial; and Big Pilot’s Watch Shock Absorber XPL

“Our manufacturing centre in Schaffhausen runs on 100 per cent renewable energy – we get our electricity from a hydropower plant just up the river, complemented by solar panels on the roof ”

while the stitching holding it in place is made from recycled microfibers. But the IWC CEO is quick to point out that sustainability is far more deeply ingrained into IWC. “In 2018, we were the first luxury watch brand to publish a sustainability report to the standards of the Global Reporting Initiative. We openly communicate about our targets and how we work towards them.

Our manufacturing centre in Schaffhausen runs on 100 per cent renewable energy – we get our electricity from a hydropower plant just up the river, complemented by solar power generated with solar panels on the roof. We also seek alternatives to single-use plastic and are working to mitigate the environmental impact of our events,” he says, while observing that sustainability at IWC means that it also closely examines its supply chain. “We secure our precious metals and diamonds supply chain through trusted suppliers and have been independently audited to the Responsible Jewellery Council’s new code of practices.”

Whether that social bent has played a role in helping position IWC more favourably among its customers is open to debate, but that the watchmaker continues to be in rude health isn’t.

According to the Morgan Stanley report, IWC sold an estimated 130,000 pieces last year – Richemont doesn’t share business specifics of each of its brands, so it isn’t possible to conclusively verify those figures.

Richemont doesn’t provide sales figures from individual markets either, but IWC does have a robust market in the Middle East. “The Middle East is a very important gulfbusiness.com

Lifestyle / Horology

market for us. We currently have over 40 boutiques and retail partners in the Middle East region. Recently, we introduced our e-commerce offering in the UAE. Just a couple of weeks ago, I travelled to Dubai.

I am very excited about the upcoming projects we have for the region,” he says while being careful not to reveal what lies ahead for the brand in this region.

While business is booming at IWC, the Covid-19 pandemic has meant that Grainger-Herr has had to rethink the positioning of luxury objects at a time when the demand for them can no longer be taken for granted. “The current crisis might change people’s behaviour towards more conscious purchasing decisions – possibly we will consume less and instead invest in products that are physically and aesthetically long-lasting and represent real emotional value for us. The global pandemic has [also] accelerated the digital transformation in the luxury industry. In time for Watches and Wonders 2021, we launched a proprietary smartphone app, including an innovative AR function that lets you try on

our new Pilot’s Watches virtually at home,” he says. Besides rolling out e-commerce platforms in select markets, IWC has also latched onto newfangled digital platforms such as Clubhouse to more closely engage with the watch community, he adds.

Part of catering to that community also means listening in to their whimsical demands and giving some of them a chance to upgrade their timepieces should they want to do so. Last year, IWC partnered with Richemont-owned Watchfinder to offer such a service. “The watch trade-in service was first introduced in our London boutique as a pilot project and then gradually extended to selected boutiques around the world. Many IWC customers are watch collectors, and some may own timepieces they no longer want. The service lets them trade in these watches, receive a valuation and use the agreed value towards a new timepiece from our collection,” says Grainger-Herr.

The year after he took the reins at IWC, the watchmaker unveiled its new 14,000 square metre manufacture in 2018 to mark

its 150th anniversary. The facility, he says, has helped consolidate the manufacturing of movement parts, its assembly, as well as case making operations all under one roof.

But rather than being a vainglorious exercise, the opening of the new manufacture has meant that IWC has managed to rapidly increase the pace at which it is developing its in-house calibres.

“In 2019, we presented an all-manufacture Spitfire Pilot’s Watches collection, followed by an all-manufacture Portugieser launch in 2020. This year, we added another strong set of novelties to our Pilot’s Watches collection, all with in-house calibres. Over the next few years, you can expect us to deliver more of this manufacture strategy,” he says.

As a side note, Grainger-Herr notes that IWC also recently launched a virtual tour of the manufacture, allowing the public to explore the site from wherever in the world they might be – live-streamed from Schaffhausen and narrated in real-time by one of its guides. Presumably, three-year-olds aren’t excluded.

The IWC boutique in The Dubai Mall

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Lifestyle / Travel

Waldorf Astoria Ras Al Khaimah Even a short staycation at the sprawling property is rejuvenating, with all the safety protocols in place

BY AARTI NAGRAJ

P

icturesque beachside views, scrumptious dishes and stunning sunset vistas have started to resurface much more frequently on Instagram as people start to venture out and travel again. But many of these images – especially among residents in the UAE – are now from local staycations. The staycation trend received a tremendous boost this year, as Covid-19 restrictions/apprehensions have stifled international travel plans, and many residents have opted instead to explore the local landscape.

Personally, although I was a bit hesitant about a staycation since the start of the pandemic (thanks in large part to an inquisitive toddler), the summer heat and the allure of ‘getting away’ superseded that angst as we found ourselves driving from Dubai to the shores of Ras Al Khaimah in early July. Driving into the expansive entrance of the luxurious Waldorf Astoria, that familiar (and exhilarating) feeling of a vacation swept over me, and my fears were also allayed by the masked-up and physically distanced ushers.

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August 2021

The check-in process was swift and smooth and after walking along the long and spacious corridors to our suite, the entrance to the room was also a quick, touchless entry with the key card. “The twisting handle is only for decoration purposes,” the attendant smilingly told us. Our home for the night was a plush two-room suite with a sea-view balcony that offered a panoramic vista with colourful hues of the golden horizon, the blue sea and the beautifully landscaped green area within the property.

Jumping gleefully on the bed, my toddler was raring to go to the beach, and so we set out with her sand bucket and toys and headed to the sea early in the evening.

Again, despite the hotel enjoying reasonable occupancy (it was the weekend) – the vast area meant we had our own spot at the private beach and felt comfortably spaced Bottom: Lexington Grill in the Waldorf recently refreshed its menu to include several vegetarian and vegan options

from the other guests.

For dinner that night, we headed to the Lexington Grill – not the obvious choice for us, being vegetarians. But the restaurant has refreshed its menu to include several vegan options, so we were keen to try out the new menu. Boasting lavish interiors and an intimate ambience – there was also soothing live music – the venue gradually filled up but also offered exclusivity at each table. Our server was extremely pleasant and helpful and ensured we had a wonderful meal and experience. For starters, his recommendation was the exotic shaved broccoli salad, which includes quinoa, braised onion and macadamia nut (“even as a non-vegetarian, I really enjoy this salad,” he told us). Digging into the dish, it was not hard to understand why – the freshness of the vegetables mingled deliciously well with the various ingredients to create an explosion of flavours. Following the starters, we were even more convinced to follow his recommendation for the mains and went with the grilled cauliflower steak – which comes with charcoal roasted mushrooms, pine nuts and vegan béarnaise sauce as well as the pumpkin agnolotti – both of which were scrumptious. We were too stuffed by this point to try out any dessert, but our server again strongly advocated the fried ice cream, which we relented to (and which turned out to be a delectable decision).

What also stood out was the immediacy with which they were able to wheel out an appetising vegetarian pasta for my toddler (who obviously relished the strawberry ice cream much more). In all, it was a wonderful experience and fantastic service, with the new vegan options

gulfbusiness.com

Lifestyle / Travel

certainly worth tasting.

Breakfast at Qasr Al Bahar was probably where we saw the biggest crowd during our entire stay, but thankfully the buffet was well-managed and there were no queues.

The good thing was also that the buffet – all kept at a distance – is only served by the staff, so there’s no fear of cross-contamination. Following a hearty breakfast, we headed out to the children’s club, which takes you on a long walk through the property, with manicured lawns, large trees with wild flowers and curious chirping birds.

The club was practically empty (one child was watching a movie in a room), so my toddler had a wonderful time playing with the attendant while we went out for gulfbusiness.com

a stroll. A visit to the swimming pool was next on the agenda and since the family pool is massive, although there were other guests, we managed to retain our personal space. There is also an exclusive adults-only pool and for those looking for adventure, the hotel also offers adrenaline water

sports ranging from jet skiing to banana boating too.

All the pool splashing had our stomachs rumbling soon after, and we sauntered into the Mediterranean-themed Azure, where you can watch the chef prepare steaming hot pizzas. The food is fresh and tasty, and the restaurant has that characteristic vacation vibe around it.

And with that, our short staycation came to an end. Although just a day, the staycation at Waldorf Astoria was relaxing, rejuvenating and an absolute stress buster. It was also particularly safe with the hotel taking all the precautions from a health standpoint. For those looking to get those striking Instagram photos, this is a spot not to miss.

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Lifestyle / Perfume

F

or most mortals, it is a sense of accomplishment to recognise a citrus note in a bottle of perfume.

But for those who create perfumes professionally, it goes much further.

Take for example Christine Nagel, in-house perfumer at Hermès, who has a nose that has been trained to identify whether that citrus note belongs to bergamot, mandarin or orange – and that’s still the easy part. Once she, for example, identifies an orange, she can tell you whether it’s from Morocco, California, Italy or Israel. Impressive as that is in itself, consider that this trained chemist can smell a perfume and write down the entire formula for it.

There are believed to be only around 500 professional perfumers globally – there are more astronauts than that – and Nagel is undoubtedly among the most sought after.

Her list of creations includes the likes of Narciso Rodriguez for Her, Miss Dior Chérie, several creations for Jo Malone and Giorgio Armani Si. When PierreAlexis Dumas offered her a chance to join Hermès, she gladly accepted.

Getting to this point in her career didn’t come without a fight. After studying organic chemistry, Nagel joined the Swiss company Firmenich. It was there that one day she saw the legendary perfumer Alberto Morillas, who also worked for Firmenich, asking two young women in the laboratory to smell his trial fragrances.

“I saw their smiles, I felt their emotions, I perceived their pleasures. At that precise moment, I knew and was sure that this job was for me.”

But a mere desire to become a perfumer wasn’t enough, as Nagel quickly learned about the industry which at the time was dominated by men. “I had to overcome many obstacles to become a perfumer, but not only because I was a woman. I also had to overcome the fact that I was not the daughter of a perfumer and not born in Grasse, in the south of France.

“But I have a tenacious character. The thing that has always motivated me is the drive to prove my ability. To be chosen for my talent and my signature above all else, with no other considerations.”

It is that tenaciousness and sheer skill which led Nagel to become the first female perfumer at Hermès in 2014, a move that seemed to round off a circle. “I have talked previously about the smell of Borotalco from my childhood. That’s one of the 66

August 2021

Message in a bottle Christine Nagel, the in-house perfumer at Hermès, is the nose behind H24 – the first men’s fragrance from the French luxury brand in 15 years

BY VARUN GODINHO

gulfbusiness.com

Lifestyle / Perfume

first scents to have remained etched in my memory. It is linked to specific memories of family. The most evocative [though] is still the scent that emanated from my grandmother’s handbag when I opened it. It had a powdery, sweet smell that has remained deeply rooted in my mind.

When I arrived at Hermès, I discovered that exactly the same story had inspired the creation of the first women’s fragrance

by Hermès: the legendary Eau d’Hermès, which is based on the scent of the inside of a woman’s handbag.”

At Hèrmes, Nagel has worked on several fragrances including Eau des Merveilles Bleue, Galop d’ Hèrmes and Twilly. But it’s what Nagel pulled off earlier this year that is nothing short of a coup.

Hèrmes recently unveiled H24, the first men’s fragrance from the Parisian house in 15 years. “Yes, 15 years have passed since Terre d’Hermès. I wanted to give a Hermès perspective on an enhanced men’s fragrance, a youthful fragrance, one that appeals to a new audience,” says Nagel.

While woody or spicy would have been the safe bet, trust Nagel to wager a dare.

She instead focused on four key ingredients with H24 – sclarene, clary sage, rosewood and narcissus. “For H24, I did not deliberately set out to use other raw materials than those generally used in men’s fragrances. I simply found in plants a natural reflection of movement, of the resonance of rising sap. I have stayed with the masculine codes of freshness, but with sidesteps and the distinctive signature of clary sage. Choosing a plant ultimately triggered a different kind of work and a cascade of new options. With H24, when choosing a plant, it follows a new logic for preserving the fluidity of the plant,” notes Nagel.

The lengths to which she has gone to research and source these ingredients might explain the many years that it took to debut this latest men’s fragrance. Sclarene is biosynthesised in the foliage of the Hall’s tōtara conifer tree native to New Zealand and the rosewood used is obtained from a specific certified sustainable producer in Peru.

The Hermès Parfums studio is located at the top floor of the Hèrmes HQ at 24 rue du Faubourg Saint Honoré. A floor below her is the office of Hermès’ men creative director Véronique Nichanian, who Nagel says played a role in the development of H24. gulfbusiness.com

“It was the creative vision of the Hermès man expressed by Nichanian for more than 25 years that inspired me. We talked at great length and spent time together. I found many creative parallels and surprising similarities between us, particularly in relation to materials – being able to touch the material simply by looking at it,” she adds.

The Middle East is a region that Nagel says holds close connections to the world of perfumes. “The history of perfume, the knowhow around perfumes, the unconditional love of perfume – [are all] clearly Middle Eastern. It is a true art and

“I had to overcome many obstacles to become a perfumer. I was not the daughter of a perfumer and not born in Grasse, in the south of France”

everyone speaks its language. This is the case in the Middle East and the UAE. My latest Hermessences are a form of tribute to this culture.”

Hermès, Nagel notes, affords her complete creative freedom and a sizeable war chest to research her creations. Importantly, the brand isn’t angling for approval from the masses by undertaking extensive testing campaigns for each of its fragrances. Instead, a group of around five people test all the fragrances. “We don’t do market research, nor do we run focus groups. Imagine the incredible freedom I have, everything is open to me. So the challenge could be the dizzying headiness of freedom. But is choosing not the first act of creation?,” Nagel asks rhetorically.

Apart from Morillas, Nagel shares that she was also particularly influenced by another world-renowned French perfumer – Michel Almairac – who has worked with brands including Dior, Burberry and Gucci. “[Almairac] trusted me, believed in me, trained me. I became his pupil and he taught me so much, especially a form of rigour and purity in my work. If I could not answer a question instantly about the presence of a raw material, he made me remove it. Since then, I’ve worked with few raw materials, because I am convinced that what is essential is necessarily simple,” explains Nagel. H24 is an example of her life’s learnings distilled in a bottle.

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Clinique Valmont, Glion, Lake Geneva Region, © NIco Schärer

My doctor prescribed Switzerland.

With its stunning scenery and high level of safety, Switzerland is a favourite with travellers.

But first-rate hospitals and clinics also make it a an exclusive health destination offering excellent medical expertise in luxurious surroundings. MySwitzerland.com/health

BRAND VIEW

Thinking beyond the box Dubai-headquartered self-storage concept The Box has opened a sprawling state-of-the-art facility in JLT. Here’s how the company is disrupting the sector

W

hen Wadih Haddad offered a corner in his bedroom to store a few personal belongings of a friend, little did he know that he was on the cusp of a business idea that would grow exponentially.

When similar requests from acquaintances started pouring in, and he ran out of space in his apartment, Haddad decided to learn about the self-storage industry and began to attend conferences and seminars to learn more about the industry that he had no previous background within.

The result was him starting The Box in 2006 in Dubai to bridge the market for self-storage units in the emirate. As Haddad pointed out, at the time the minimum commitment for storage options was between 6-12 months and it wasn’t customised to serve non-industrial clients such as homeowners and small- and mediumsized business owners who required storage solutions. That’s the niche that The Box addressed, offering 16 sqft lockers all the way up to 1000 sqft mini-warehouses with flexible contracts starting from a month.

Over a decade-and-a-half into the business, The Box reached an inflection point in May this year when it opened a new multilevel storage facility in JLT, within the DMCC Free Zone.

The new 140,000 sqft climate-controlled, secured and 24-hour access storage space is spread across four floors, along with convenient drive-up units.

The construction of the new facility has been made keeping in mind sustainability as well. “We are proud to unveil our new sustainable mega facility equipped with solar panels that is strategically located in the heart of Dubai serving major residential and commercial areas such as Media City, Internet city, JLT, Emirates Living and Jumeirah Park. It has electric car charging stations, bicycle parking slots and we will also continue to plant a tree for every customer,” says Haddad.

“The new facility is the region’s first purpose-built storage facility with some of the highest standards when compared against self-storage facilities, not just here but also across most of Asia and Africa. We have also added a loading bay, drive up mini-warehouses, biometric entry and exit systems.”

Besides offering storage solutions, it will also offer open co-working spaces, a library,

and related services for both its commercial and personal clients, although the core focus still remains self-storage which constitutes 80 per cent of the business,” notes Haddad.

Haddad says that The Box has 25 full time and 75 contract workers and has more than 200,000 sqft of net storage space on offer across all locations. “We’ve grown this completely organically with the support of bank funding and some creative debt solutions like peer-topeer platforms. Our growth story didn’t involve any equity rounds. Oftentimes, entrepreneurs starting out think they need to raise funding, but it is possible in most cases to grow without diluting your position – and we are an example of that,” adds Haddad.

He reveals that the next steps would include The Box introducing safety deposit boxes facilities in Q4 this year. “Drop shipping and storage for influencers is something we are looking at as a lot of them start off in small spaces at home and soon need room to exapnd as they grow their audience,” says Haddad. And he knows that all too well.

Drop shipping and storage for influencers is something we are looking at as a lot of them start off in small spaces at home and soon need room to expand as they grow their audience gym and an auditorium to serve as much more than just a warehouse.

The Box also offers national and international relocation services. “The Box has expanded to include local moves, international shipping, packaging, order fulfillment

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The SME Story

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A dedicated hub for the regional startup and SME ecosystem

INTERVIEW

Reaching critical mass A healthy meal subscription app, a tech solution to solving workflow problems among deskless frontline workers and a sustainable jewellery company are on our radar this month Fadi Ghaly CEO and founder, Count’d What were you doing before you started Count’d?

I previously co-founded Under500, a healthy food brand that was the first restaurant to publish each meal’s macros on food delivery aggregators.

Under500 has proven itself as the leading brand out of the 100+ brands on the Kitopi platform and has the highest retention.

The process to start Count’d has gone over a number of iterations during the past year. We saw a large market need based on a customer research process, numerous discussions with industry professionals, the global trends we are witnessing and personal frustrations that we faced as we looked to eat healthier.

What is the USP of Count’d?

Count’d is a personalised healthy meal subscription app that leverages insights in real-time to achieve health goals. We do this by offering on-demand curated healthy meals from the health-food restaurants in the city. Count’d offers a simple and 70

August 2021

effective experience where customers can easily browse and select healthy meals, connect with their fitness tracking wearables and manage their goals – all in one place.

With over 300 healthy meal options from restaurants in the city such as Little Erth, Fitness Feedz and BR8 Kitchen, customers now have the option to subscribe to one, two or three healthy meals per day. Orders can be pre-scheduled for the entire month, with all calories and macros accounted for. We have partnered with cloud kitchens and a number of individual restaurants, where we work with 20+ brands at the moment.

What is the potential market size of the nutrition and wellness tracking market within the UAE/GCC region?

This is an addressable wellness market of $1bn in the UAE and approximately $3bn in the GCC. Dubai Fitness Challenge alone has a million active participants. We also have 400+ gyms in Dubai.

We understand that coming out of Covid, people are looking to eat healthy and be mentally and physically fit, however many do not have the time or the energy to plan and prepare their meals.

What are some of the further innovations you plan on the app?

(from left) Ahmed Wasfie, Fadi Ghaly and Varun Kapur from Count’d

Personalised nutrition is expected to be a $64bn industry by 2024. We are doing considerable research by talking to our target market of millennials, working professionals and wellness enthusiasts. They want more personalisation and hence we are building a product that caters to their needs. In theory, we should receive custom nutrition advice based on our individual biology or genetic profile. With that goal in mind, we will look to engineer individualised diets.

What are your expansion plans for the business?

We are currently only in Dubai, and plan to start operating in Abu Dhabi by October 2021. In 2022, we will enter Saudi Arabia, Kuwait and Bahrain followed by other international markets.

The one lesson of entrepreneurship that you learnt the hard way?

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The SME Story

There have been many, but an important one that I learnt was that things always take longer than we plan or expect. As entrepreneurs, we tend to be very bullish and optimistic, which is extremely important. However, in reality, building a business can cost more and take more time. This impacts the budget, cash flow, fundraising process and the goto-market strategy.

One solution is to onboard experienced advisors to learn the best processes and manage expectations.

back-office operations, the frontline relied on rudimentary and archaic tools such as clipboards, walkie talkies and paper forms to capture information and execute workflows. This gap created challenges in the streamlined flow of information, often leading to loss of critical data due to the disconnect, as well as loss in efficiency due to lack of access to real-time information by frontline workers. Something had to be done to address this problem that affects close to 80 per cent of the workforce globally.

Give us a sense of the scale of the current business?

Today we serve clients in MENA, the US, UK, mainland Europe and South East Asia. The Arrow Labs MIMS platform serves top tier enterprise customers in telecom, oil and gas, logistics and utilities. [We work] with customers such as Bnet, Linde, G4S, and DP World, to name a few. The team is expected to exponentially grow over the coming 18 months to about 60 people, onboarding talent in the US, Europe and MENA.

Rami Darwish Founder and CEO, Arrow Labs What is the concept of Arrow Labs?

Arrow Labs provides a solution to make deskless work simpler, better and more productive for frontline workers. We work to solve the disconnect by bringing innovative digital tools through the MIMS platform to empower frontline workers with technology to increase productivity and digital contribution to their organisations. The MIMS platform connects workers to the back office from the field and orchestrates daily workflows and tasks to be executed with simplicity.

Towards what end will the $5m Series A funding you received from Tim Draper be used?

The strength of our platform has led us to partner with Draper Associates, Global Ventures and B&Y. We continue to invest in developing our AI capabilities to connect data sources, analyse and automate workflows, as well as invest in resources to expand our offering in the US market and MENA and onboard thousands of new frontline workers with the MIMS digital tools. Our goal is to build a global category leader to connect 80 per cent of the deskless workforce.

What prompted you to start Arrow Labs?

Spending close to 10 years in [the] corporate [world], working in technology focused on the public sector, it became apparent to me that there was a huge gap in access to tools between frontend and backend operations. While there were a plethora of tools available for the digitalisation of gulfbusiness.com

Rami Darwish, founder and CEO, Arrow Labs

What are some of the future areas of uses/industries where MIMS can potentially be deployed?

MIMS was designed from inception to serve as a August 2021

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The SME Story INTERVIEW

horizontal fully modular platform with plug and play capabilities that allow our customers ultimate flexibility in choosing options to solve gaps and pain points in their existing technology stack from the first lines of codes. We believe what the market needs is this flexible horizontal platform rather than limited vertical solutions.

The outlook for the future is bright with much untapped potential in mining, transport infrastructure, construction and others. Just recently, we launched MIMS Optimise, a machine learning based route optimisation-centric capacity planning and task distribution system to provide an optimal solution on distributing service work orders to field personnel, based on skill, booking time, routes, travel time and equipment availability. We are now exploring new potential developments involving IoT sensors and machine vision technologies that will pave the way for exciting new features in the near future.

about that launch later this year.

What is your approach to sustainability?

We look at sustainability across different layers, with the product at the core. This is where we’re currently focusing, by designing quality products that last longer, while also trying to promote a quality-oriented mindset rather than constantly pushing volume through discounts. To us, real sustainability starts with addressing product lifetime and the way we “consume”.

Further to this, we only work with selected production partners based on local certifications that require compliance to high sustainability standards.

However, we’re still a young brand, and at this scale, it’s very hard to control every step of the value chain.

Emanuel Brendarou Founder and CEO, Terrasuya You have a background in consulting at Bain and also fashion. How did that lead to Terrasuya?

I found the perfect intersection between the two things I enjoy: being part of building a company that works as a positive force in our communities, whilst also creating elegant everyday accessories and making these accessible to everyone. I felt like the timing was right after years of advising in the region and finally decided to make the jump.

What is the size of your operations at the moment?

We’re still just at the beginning of our journey, with the brand being introduced in early 2021. Our focus is to provide the best customer experience in the GCC. We offer free delivery in the UAE and Saudi Arabia today, with same-day delivery in Dubai. As we grow, we’ll be eyeing new markets outside of the region as well – we already see traction in some of the larger European markets. Today we mostly sell through online channels – mainly our website – but we’re also looking into expanding offline via retail partners in the GCC.

There are plenty of jewellery and accessory brands in the market. Why did you decide to start another?

That’s right, there are many different brands out there. But there’s always room to introduce new ideas in a different and better way. With Terrasuya, we strive to build a GCC native brand that incorporates cultural elements into the company DNA. On top of this, we still see a window to design and sell elegant accessories in an affordable segment. To date, brands in the GCC are predominantly international, of which many are focusing on the higher price ranges.

What are some of the main challenges you are facing when trying to scale Terrasuya?

What are some of the core collections at Terrasuya?

Our core collection combines earrings, bracelets and necklaces handcrafted in gold vermeil. Most pieces have been designed with a minimalistic orientation. As we grow, we’re looking to introduce more bold pieces, incorporating local elements and inspiration from our surroundings. I think this will become more evident with our next collection – which will be pearl oriented. We’re very excited 72

August 2021

Emmanuel Brendarou, founder and CEO, Terrasuya

Finding new ways to reach customers at a lower cost is one of the main challenges for any online oriented business today. In the last decade, we’ve seen many success stories that rode the wave of influencers and/or various digital marketing channels. Many of these channels have now become saturated, with prices increasing significantly, accelerated even further by the coronavirus [pandemic]. We’re working towards a five-year roadmap – with the ambition to grow Terrasuya into a global brand. gulfbusiness.com

The SME Story COMMENT

Ramesh Jagannathan Managing director of startAD and vice provost for Entrepreneurship at NYUAD

A step ahead The time is ripe for young entrepreneurs to change the world

O

ILLUSTRATION: GETTY IMAGES/MALTE MUELLER

ne striking statistic often quoted is that 65 per cent of the jobs students will engage in do not yet exist today. While it is a brave person who would predict the future in such precise terms, it is undoubtedly true that the world is changing more rapidly than ever before thanks to technological advancement. Young people know this, and their uncertainty is exacerbated by unemployment figures in the Middle East and North Africa (MENA) that are highest in the world, according to the Arab Development Portal, at 27.2 per cent in the Middle East and 29 per cent in North Africa – which is more than double the global average.

Fortunately, this demographic also possesses a ‘can-do’ mentality. SMEs contribute to over 80 per cent of the UAE’s economy, with 40 per cent of young Arabs wanting to start their own business in the next five years, rising to 55 per cent in the GCC. Furthermore, with the proliferation of artificial intelligence, for the first time in human history, technology is poised to help shine the cultural identities of individuals and societies across the world in an uncompromising way. In this context, I am reminded of the expression, “If you teach someone how to fish,

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that someone will feed themselves for the rest of their life”. Following this profound philosophy, we can turn the challenge on its head and teach everyone entrepreneurship skills to create new jobs. In this process, in addition to taking control of their future, they would play a direct role in guiding the UAE’s knowledge economy transformation.

So what are their chances for success?

Ramesh Jagannathan, MD of startAD and vice provost for Entrepreneurship at NYUAD

Laying the groundwork

Turning the will to succeed into a viable pathway starts with education, and students must develop an entrepreneurial mindset from a young age. Although AI and automation are increasingly important, they do not replace human skills including resilience, managing challenges and a creative mindset. It is important to build a strong team for support as well as collaboration, which is another skill that must be honed early.

The UAE government has recognised this opportunity and has promoted STEM initiatives over the past few years at all levels, as it works toward the UAE Vision 2021 goal to develop a knowledge-based, highly productive, and competitive economy, driven by entrepreneurs.

Outside of education, a raft of recent initiatives is laying the foundations for entrepreneurs to build upon. Youth Hub X in Abu Dhabi is a platform to connect youth and launch their ideas. Area 2071, an innovation ecosystem in Dubai, attracts the brightest minds to design the future. Dubai Next is a crowdfunding platform, launched in May, that allows innovators to secure funding to launch their projects. The Ministry of Climate Change and Environment (MOCCAE), launched the Youth Food Security Stations in June, aiming to encourage young Emiratis to pursue careers in agriculture and establish high-tech farms.

But most importantly of all, young people are contributing with ideas that can – and in some instances will – change the world. For example, I have been privileged to work with an entrepreneurship incubator on a programme that featured a range of groundbreaking ideas for the retail sector, such as a platform that uses AI to analyse customer and product data to generate personalised clothing recommendations.

Another digital platform enhances e-commerce websites, apps and online stores by using augmented August 2021

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The SME Story COMMENT

reality to allow users to try on clothes virtually. And a mobile application uses a sign language keyboard and 3D character animations to translate text and audio to sign language and vice-versa.

These three examples are all from UAE-based entrepreneurs. Their inventiveness leads me to wonder at the sheer force of creativity that could be applied to other markets and sectors, given the depth of talent in this region.

We’ve seen this same spirit of entrepreneurship and creativity among UAE university students between the ages of 18 and 25, who are passionate about developing tech-enabled solutions for global challenges outlined in the UNDP’s Sustainable Development Goals.

Unique innovations include microplastic clean-up drones, recycled plastic bricks, and building sheets for construction and design, along with integrated medical and learning platforms. Any one of these ideas could have a dramatic impact on the environment and quality of life for entire communities. And it would also make sound business sense, given the current global market size for conscious investing has been estimated at $715bn, according to UBS Global Wealth Management.

Next steps

With the support of our education sector, industry, and the government, opportunities abound for talented young people to turn these ideas into viable business solutions – and the numbers support this view. The fDi Market report ranked Dubai 11th globally and first in MENA for venture capital investments in 2020, with UAE-based startups raising $577m in venture funding – 56 per cent of the MENA total for 2020.

Added to this are the ever-evolving laws to support small businesses, such as five-year visas for entrepreneurs and the recent 100 per cent foreign ownership law. Less well-known technical assistance includes the Hamdan Innovation Incubator signing an MoU in June with the International Consultant Law Office to provide legal consultancy to SMEs and entrepreneurs. All these changes, large or small, have helped the UAE rise to 16th on the World Bank’s ease of doing business index, as it marches upward, playing a defining role in MENA entrepreneurial economies. In the ‘starting a business’ topic, the UAE scores 94.8, ranking 17 out of 190.

Even more opportune, these young business leaders will be able to use this strong regional platform to reach out to the two-fifths of the global population – more than three billion people – who are aged under 25. And if I can finish where I started, with a prediction of my own, I would argue that this diverse, connected generation has the passion, the commitment and the knowledge to change the world.

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Qatar’s funding evolution The Qatari VC ecosystem remained steady in 2020 despite the onset of Covid-19, growing 9% between 2019 and 2020

Undisclosed proxy

Disclosed funding

IN QATARI RIYALS

41m 31m 22m

21m QR 16m

3m

QR 15m

2016

2017

2018

2019

2020

22

24

NUMBER OF DEALS

14

26

67%

21

Since 2016, the venture capital ecosystem in Qatar grew at a CAGR of 67%, considerably faster than the 4% growth rate noted across MENA

QR22m

The amount startups raised in 2020

Sector focus A look at the industries which saw the most funding in Qatar 5%

3%

Others

Advertising & Marketing

4%

Delivery & logistics

20%

E-commerce

5%

Home services

% SHARE OF FUNDING IN 2020

6%

IoT Solutions

13%

6%

Telecom

Healthcare

9%

Fintech

6%

Events SOURCE: MAGNITT QATAR VENTURE INVESTMENT REPORT 2020

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