DISTRIBUTION SYSTEM IN THE UAE

Transcription

1 DISTRIBUTION SYSTEM IN THE UAE A BRIEF OVERVIEW By: Vishal Mahajan

2 UAE

3 UAE FACT SHEETS Total Population (recorded in 2012) : 9.2 Million Area : 84,000/- Square Kilometers Capital : Abu Dhabi Official Language : Arabic GDP 2013 (US $ bn) : 390

4 UAE GRDI INDEX

5 RETAIL BUSINESS IN THE UAE Research revealed by CBRE states that the UAE is home to the second highest number of international retail brands. The survey of 326 retailers from 200 cities showed 53.1 percent of those questioned had branches in the Gulf country, while 56.7 percent had a presence in London. In terms of cities, Dubai was the second most popular for global brands, attracting 53.8 percent of those surveyed.

6 DISTRIBUTION SYSTEM A distribution system/channel is a set of interdependent organizations that help make a product available for use or consumption by the consumer or business user from its producer. Intermediaries of this system are firms or individuals such as: Wholesalers Agents Brokers or Retailers, who help move a product from the producer to the consumer or business user.

7 CHANNELS Agent Producer/ Brand Retailer Wholesaler B2C Consumer

8 DISTRIBUTION SYSTEM AS PER NATURE OF BUSINESS Consumer Goods: Producer Consumer Producer Producer Producer Retailer Wholesaler Agent/Broker Consumer Retailer Wholesaler Retailer Consumer Consumer

9 Business Goods: Producer Producer Business User Agent/Broker Producer Producer Business User Wholesaler Agent/Broker Wholesaler Business User Business User

10 Services: Consumer or Business User Service Provider Service Provider Agent/ Broker Consumer or Business User

11 DISTRIBUTION SYSTEM IN UAE The franchise model has become a popular method for overseas companies seeking to enter the United Arab Emirates ("UAE") market whilst retaining control over their brand. It is also popular with UAE businesses seeking to expand domestically and regionally. Franchising is a way of expanding business, in which the franchisee is granted the right to utilize the franchisor s brand (Name, logo, trademark) to engage in the process of Selling or distributing, the goods or services under the operating format prescribed by the franchisor. Franchisor are the owners/producers or in some cases agents of the respective brands. Franchisee are the agents/wholesalers/retailers of respective brands which operates under certain prescribed format by the franchisor. There is no one specific franchise law in the UAE. The concept of franchising falls within the ambit of commercial and agency laws which do not specifically differentiate between franchise, agency or distribution agreements.

12 Key Franchising Advantages are : Franchisor : Opportunity to expand beyond geography of Influence Business Growth unrestricted to Capital, Human resource & Control Potential of an Entrepreneur led business unit Royalty of sharing the brand equity Franchisee : Advantage of owning a successful brand Faster ROI over a new brand development Assisted Training & Development by the franchisor Leverage the marketing campaigns designed by the brand

13 Distribution Systems used under Franchise model: Brand/Producer Brand/Producer Brand/Producer Retailer Wholesaler Agent/Broker Consumer Retailer Wholesaler Retailer Consumer Consumer

14 LIFESTYLE PRODUCTS Home Décor

15 Home Furnishings

16 Furniture & Accessories

17 Beauty & Cosmetics and other Accessories & Gift and Novelty Items

18 LIFESTYLE BRANDS IN UAE

19 DISTRIBUTION SYSTEM FOR OUTLET MALLS Being governed by the Franchisee model, most of the brands are made available in Outlet Malls trough their respective Franchisee. Due to nature of the business, old season stocks are forwarded to outlet stores from the regular stores by the Franchisee of respective brands upon starting of the new season. This is also known as Selective Distribution System However, in some cases Parallel distribution system is also followed for Outlet Malls

20 Parallel Distribution System: Wholesaler Producer/Brand Retailer Major Retail Chains Outlet Stores

21 SHUKRAN THANK YOU Grazie! & WELCOME TO UAE!!