Frankly speaking: âThe future of retail is both physical and digital – phygital,â says Alain Bejjani, CEO of MAF
DUBAI: Business in Saudi Arabia and the United Arab Emirates is “buzzing,” Alain Bejjani, managing director of diversified conglomerate Majid Al Futtaim, told Arab News, even as the resilience of their economies is tested by unexpected twists and turns of the pandemic.
He gave his thoughts on the state of the recovery from last year’s coronavirus lockdowns on Frankly Speaking, the series of video interviews with leading businessmen and policymakers in the Middle East and in the world.
âSaudi Arabia (has shown) great resilience during the pandemic, but in reality Saudi measures (to stop the spread of the virus) were quite different from what you have seen in other markets. I have been there more than three times in the last few months and you (can) see it is buzzing. It’s coming back, âBejjani said.
âThe UAE had remarkable resilience in 2020 and is now buzzing across the board. We’ve had a great second half, particularly the third and fourth quarters we’re in, and basically things are starting out really well in 2022. “
Business in Egypt is also on the path to recovery, he said.
Bejjani has been at the helm of MAF since 2015, consolidating the group’s position as one of the leading retail, hospitality and leisure groups in the Middle East. MAF is well known to consumers across the region for its Carrefour supermarkets, gigantic shopping malls and Vox Cinemas chain.
During a broad discussion, Bejjani also spoke about how the pandemic has changed MAF, its plans to give cinema a boost in the Middle East, and the sustainability of MAF’s activities, which include a track ski in Dubai. and another – expected to be the largest in the world – in the under construction Mall of Saudi in Riyadh.
In tune with the post-pandemic economic recovery, Bejjani explained that there could be a financial âblowâ to MAF this year as consumption patterns shifted from online to in-person retail.
âSo 2021 has been difficult and not 2020. Last year was a difficult year to be able to fill and be able to serve customers in the safety of their homes, and to navigate through the very strict restrictions that we had to face because that of the pandemic.
âBut in 2021, when we had fewer restrictions or no restrictions, people could go back to stores, actual consumption changed because people were consuming less. They weren’t at home as much as they were, âhe said.
He said that a full recovery in all areas might not happen until 2024, adding: “We are in several industries and some industries have recovered while others have not yet recovered. So when you look at our overall results, they are affected by those who have not yet recovered. â
How Majid Al Futtaim tackles the coronavirus ‘tsunami’
Elaborating on the subject, Bejjani said: âFor example, the film industry and the L&E (leisure and entertainment) industry – this is a company that is recovering more slowly than others and is now really affected by problems. supply chain.
“When you look at the cinema business, it is a business that was really impacted in 2021 not only by the occupancy limitations, but also by the fact of the unavailability of films due to production delays and all the supply chain issues that were triggered by the pandemic.
In Saudi Arabia, where the MAF has grown rapidly over the past five years, growth has been spurred by the Vision 2030 plan’s reform strategy to diversify the economy, according to Bejjani.
âWhat has happened in Saudi Arabia over the past five years is a blessing. Everyone dreamed of opening Saudi Arabia; bring back Saudi Arabia; to truly become a dynamic and even more dynamic economy, a more inclusive economy; reintegrate women into the labor market and also into society; to bring entertainment back to the Kingdom, âhe said.
MAF’s most prestigious project to date in the Kingdom is the Mall of Saudi, a $ 4.3 billion shopping and entertainment complex under construction in northern Riyadh, slated to open in 2025. Bejjani is convinced that the “mall culture” will overcome the challenges of the pandemic, but that the closures will change the nature of the business significantly.
âFor us, this is of course a very important, substantial investment and a very strategic project. We do this because we truly believe in the future of retail and we truly believe the future of retail is both physical and digital. Now there’s this new word being coined, it’s called ‘phygital’, and we’re seeing it more and more.
âShopping centers aren’t just places where you actually do transactions, where you actually buy something. It is a place where people come together. It is a place where people meet. It is a place where friends and family spend time and create great times together. Of course, they go shopping, have dinner or consume entertainment, but also bond. This is what the new roles of shopping centers are, âhe said.
The Mall of Saudi will be home to the world’s largest ski slope and snow dome. Some environmentalists have questioned the construction of gigantic indoor snowparks in the Middle East, especially as concerns grow about climate change.
But Bejjani is adamant that Riyadh’s new ski resort will comply with the strictest environmental and energy regulations, as Ski Dubai in the United Arab Emirates does. âThere are a lot of misconceptions around indoor ski slopes,â he said.
âIf you look at the Ski Dubai mall in the Mall of the Emirates or the one you’re going to have in our Riyadh project, these are actually LEED (Leadership in Energy and Environmental Design) certified assets.
âIt actually got a lot better. We have invested a lot of technology and investment in order to make it as sustainable as possible. So when you look at the actual slope, it is inside a refrigerator which preserves heat and cold, thus minimizes outgoing heat and preserves cold inside. And we have a lot of technology to make sure we’re actually using as little electricity as possible and producing and having the lowest carbon footprint possible. “
Majid Al-Futtaim chief launches “huge” Saudi mall project
Vox Cinemas, which continued to aggressively roll out new locations after Saudi Arabia’s ban on cinemas was lifted in 2018, is among the activities doomed to strong growth, before being later shut down by the pandemic. Bejjani says he’s confident Vox can win back business through home streaming services like Netflix that have performed so well during the lockdowns.
âPeople love the experience. Cinema is an experience that you share with others and there is nothing like the magic of being in a theater and laughing together and experiencing those emotions together, âhe said.
Consumers had “maxed out” on Netflix during the lockdown phase, he added.
One of the challenges MAF plans to tackle head on is the lack of new content, and especially regional content, in the Middle East film industry. Hollywood and Bollywood studio closures during the pandemic have resulted in a shortage of new material for moviegoers.
âSaudi Arabia is a fantastic market for local content, whether it’s Arabic, Khaliji, or Egyptian content, and that’s where we need and we’re putting a lot of effort into making sure we allow much more that local content, âhe said.
Vox is sponsoring the upcoming Red Sea Film Festival to demonstrate its commitment to creating a regional production and distribution network to raise the level of local content in cinema.
âWe have a huge market with a lot of consumers of cultural products young and old who want local content,â Bejjani said. “This is how we can contribute to the rebirth of our civilization and the rebirth of cultural life in our part of the world.”