OBG talks to Bader Abdullah Al Darwish, Chairman and Managing Director, Darwish Holding

Interview: Bader Abdullah Al Darwish

How is the continued economic downturn in European and US markets affecting competition in growth markets such as the Gulf?

BADER ABDULLAH  AL DARWISH: The market here in Qatar and the Gulf as a whole has seen a revival in the past two years, which can be attributed to rising oil prices. In Qatar specifically, a number of sectors are experiencing growth, including retail and hospitality. Companies in European and US markets are noticing this trend and the increase in purchasing power here through indicators such as the rise in GDP per capita, the substantial number of projects that have been announced and the increase in public sector salaries, which has injected a lot of money in the economy. This has sparked demand in a large number of international companies to enter the market, which in turn enhances competition.

What benefits are expected as a consequence of rising competition in the Qatari retail market?

AL DARWISH: Competition gives Qataris and residents a wider product offering, providing them with choices and more options, both in terms of the range of products on offer and the price of these goods. Another consequence of enhanced competition is an improved quality of service. The Qatari consumer travels abroad far more than they used to and is more educated and aware of what is available outside of Qatar. This is all reflected in the growth we are now witnessing, especially within the high-end luxury goods segment of the market. The ever-increasing presence of brand names in Qatar has also drawn in shoppers from the Gulf region due to the proximity and the quality of our marketplace. There is still a novelty about shopping in Milan or Paris, but this is declining at a very fast pace.

Brands from the Middle East are doing fairly well in taking their share of the market. We are encouraging local designers and are willing to support them as long as the quality, concept and price are right. The market is big enough to accommodate more brands and the region should take advantage of the opportunity.

How would you describe the current climate for franchising in Qatar, and where would you identify specific opportunities for this business model?

AL DARWISH: Opportunities exist in a broad number of retail segments as well as in the hospitality and food and beverages sectors. Franchising is growing ever more popular and at a very fast pace. The enhanced liquidity in the market makes Qatar a popular destination for companies to offer franchising opportunities and investors here are ready to take them up.

To what extent do you feel that inflationary pressure could threaten growth in the retail market?

AL DARWISH: Inflation in the past has negatively affected growth in the retail market. It is a circumstance we need to be aware of and prepared for. However, I believe that we have learnt from the lessons of the past, and more importantly, learnt from other countries in the region which have gone through similar cycles. There is a lot of confidence in the current banking system and belief that any significant upward pressure on inflation can be contained and controlled.

To what extent would you say the lower segment of the market is undersupplied?

AL DARWISH: I do not believe this segment is under-supplied. Qatar has reached a point where we are able to offer both mid-to-upper and mid-to-lower shopping facilities to cater to the needs of the population. The planned construction of malls over the next three to four years gives me confidence that the lower segment of the market will be sufficiently supplied.

A problem facing the region is that the lower-earning segment of the population does not spend a large proportion of their wages inside the country, and this is an issue the region has to deal with. This is, however, offset by the fact that the mid- to upper-earning segment of the market are spending more and more of their earnings domestically, and this rate continues to rise, fuelling growth in the domestic retail sector.