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SPECIAL REPORT: E-COMMERCE – HAS IT ARRIVED IN THE GCC?

F E B RU A RY 2 02 1

A winning argument Emirati lawyer Youssef Al-Bahar presents a solid case on why the UAE’s legal system is future-ready

p.30

Brexit: What comes next for GCC-UK relations?

p.36

Qatar: As the Gulf ends Doha rift, which sectors stand to gain?

BD 2.10 KD 1.70 RO 2.10 SR 20 DHS 20


CHRONOMAT


Gulf Business

CONTENTS / FEBRUARY 2021

07

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

30

Britain’s new path Now that the UK has exited the EU, how will its ties with the GCC evolve?

43

Special Report: Click on How the region’s e-commerce sector is adapting to the new normal

gulfbusiness.com

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Cover Story: Smart judgement From cybercrime to remote legislation, Emirati lawyer Youssef Al-Bahar discusses the UAE’s evolving legal system February 2021

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THE MIDDLE EAST’S LEADING ARABIC TECHNOLOGY & BUSINESS MEDIA PLATFORM TECHNOLOGY | ENTERPRISE | BUSINESS

www.mena-tech.com MenaTechMedia


CONTENTS / FEBRUARY 2021

59

Lifestyle

Mercedes in NEOM p.60

Fine Arts Festival p.64

MB&F’s radical move p.68

“For without unity, there is no peace, only bitterness and fury. No progress, only exhausting outrage. No nation, only a state of chaos” – US President Joe Biden in his inaugural address

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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 Acting editor Aarti Nagraj aartin@motivate.ae aartinagraj Deputy editor Varun Godinho varun.godinho@motivate.ae varungodinh Tech editor David Ndichu david.ndichu@motivate.ae Contributor Zainab Mansoor editorial.freelancer@motivate.ae Senior art director Olga Petroff olga.petroff@motivate.ae Art director Ángel Monroy angel.monroy@motivate.ae angel__monroy Photographers Jitendra Jangir Cover: Ángel Monroy

Photo: 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 Dominic Clerici dominic.clerici@motivate.ae Group marketing manager Anusha Azees anusha.azees@motivate.ae

Vol. 25. Issue 9. February 2021 Printed by Emirates Printing Press, Dubai

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

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

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Operation Vaccine

The Brief 8 9 11 12 13

21.85 Note: This is counted as a single dose, and may not equal the total number of people vaccinated, depending on the specific dose regime (since people receive multiple doses). Data as per January 20, 2021

FEB

21

8.01

8.47

UK

Bahrain

4.99 2.08 Italy

US

UAE

Israel

SOURCE: OUR WORLD IN DATA

ILLUSTRATION: GETTY IMAGES/CARGO

Marketing Energy Future Social Startups

35.46

Countries with the highest Covid-19 vaccination doses administered per 100 people

In a maze Covid-19 has placed unparalleled demands on healthcare providers. Did those in the region find the right way to deal with the situation? p. 15 gulfbusiness.com

February 2021

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The Brief / Marketing COMMENT

Dr M Muneer Managing director of CustomerLab Solutions and co-founder of Medici Institute

Making a noise online

While B2B marketing will revive in 2021, it must look and feel different

8

February 2021

ILLUSTRATION: GETTY IMAGES/RASSCO

T

he pandemic has battered the economy across the globe in more ways than imagined. Business-to-business (B2B) companies have been most affected with not many possibilities for regular marketing activities. Does 2021 augur a better start for them? Will B2B marketing adapt to the changing economic and public policies? Or shall one look at history and try incremental improvements? My discussions with a number of B2B top executives threw up several interesting possibilities for the year. The biggest challenges for B2B companies seem to be retaining customers and increasing brand awareness. Up to 65 per cent of B2B organisations surveyed by Medici Institute in Asia and Middle East expressed these as the top challenges for marketing, as against 40 per cent last year. Hence it is not surprising that more and more B2B companies are now getting into digital media. The proliferation of social/digital media will only get more prominence this year. It is clear that digital marketing will take a larger share of any marketing budget as acquisition of leads will move more and more into this medium. Companies are embracing digital for quicker and inexpensive results. If you are lagging behind on this front, now is pretty much the right time to get your marketing managers to pull up their digital media socks. In a similar fashion, we will also see the proliferation of specialised ad agencies in the digital space. We will find an increasing number of creative shops mushrooming in the coming year with focused offerings. For instance, you will see consulting services

Loyalty matters A majority of surveyed B2B organisations agreed on their biggest challenge

Retaining customers and increasing brand awareness 65%

SOURCE: MEDICI INSTITUTE IN ASIA AND MIDDLE EAST

for the use of appropriate digital media and measurement of results. Existing agencies will increase the breadth of their services. So it will be essential to find the right agency for your needs and it is also possible for you to get specialists for almost all requirements. Direct mailers in the old-fashioned way will make a comeback this year as e-mailers are showing fatigue. Although digital media is faster and cheaper, specially designed direct mailers will have a better chance to get seen in a world where the physical mail is almost non-existent. Those who have been predicting the total disappearance of the hard copy brochure may slowly eat their words. Content will become king too. Content marketing will take centre stage more prominently for B2B just as it is for B2C. This will perhaps trigger more software applications being made available for free, gulfbusiness.com


The Brief / Energy Dark side

gulfbusiness.com

6.8% India

Russia 4.7% Japan 3%

8.7%

13.4% United States

EU27+UK

30.3%

Pricing emissions A low-carbon trade area between the US and Europe would play out for the world’s benefit, opines Bloomberg columnist Andreas Kluth

T Going black

The countries that recorded the largest increase in carbon emissions in 2019 8%

4.2%

Indonesia

3.4% 3.4%

Australia

every possible activity and compare them. That will be primarily led by software service providers and ad agencies, and most marketers will be forced to spend more on such services. Therefore, one trend that will take shape in 2021 is increased IT spending by marketing. B2B companies will find it extremely challenging to build relationships over digital media, because there are many more impersonal touch points. Big data applications are already in use in B2C. Data in the internet space is humongous, worrying all types of marketers. This will be more refined and offerings may get more sophisticated in 2021, resulting in different business models in this area. Most critical will be the analysis of compatibility and effective use of such software applications. With so many new things happening online and offline, companies will find that integrated marketing efforts will be more important than ever. You cannot have an online campaign different from your other campaign. You must coordinate your web, mobile, print, TV and other media efforts in a seamless manner in 2021. Otherwise the content and message will get diluted and eventually harm your efforts.

A N A LY S I S

Iran

WITH ONLINE MEDIA BECOMING IMPORTANT, MARKETING EXECUTIVES WILL PROBABLY DRIVE MORE SALES THAN SALES STAFF

SOURCE: EUROPEAN COMMISSION JOINT RESEARCH CENTER

China

and at a price, for B2B marketers. Syndication of online content will be a normal thing in 2021. This will probably be an after-effect of B2C success in lead generation using content. With online media becoming important, marketing executives will probably drive more sales than sales staff. Will sales as a function get merged with marketing in the current year? Leads get generated directly by online efforts – qualifying them and directing the right leads to appropriate departments may move to marketing in the coming two years. The measurement of digital media has still not evolved and does not yet give the desired results. Most enterprises use TRP methods to measure effectiveness of advertising, which is more appropriate for television. In 2021, new measures will emerge to accurately measure the effectiveness of this media. ROI will be paramount in every marketer’s dictionary. In short, it will become imperative to measure

China

Top carbon emitting countries in 2019

SOURCE: EUROPEAN COMMISSION JRC

here’s a great way the US and the European Union could together address two huge challenges in one policy sweep. It’s to create a transatlantic “carbon club.” The geopolitical promise of this idea is to resurrect the notion of the “West” at a time when the US and Europe are drifting apart but still hoping to rejuvenate their alliance. The even bigger goal is to win the struggle against global warming, which both US President Joe Biden and the EU cite as their priority. The only way to slow climate change is to dramatically reduce our planetwide emissions of greenhouse gases. And the best approach to that is to put a price on carbon that’s both high and rising. This signal will make producers and consumers adopt behaviours and technologies to pollute less. Within a given jurisdiction, we already know how to set such a carbon price. You can tax emissions directly. Or you can limit their overall amount by law, then issue carbon allowances which firms can buy and sell in an open market, at a price that constantly changes. This way emissions will be cut fastest wherever it’s easiest and cheapest to do so. Of these cap-and-trade systems, the EU, Norway, Iceland, and Liechtenstein jointly have the world’s largest. Still, it only covers sectors – from power generators to steelmakers and airlines – that account for 40 per cent of European emissions, so the system must be expanded. Even then, it still faces a bigger problem. February 2021

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The Brief / Sustainability

ILLUSTRATION: GETTY IMAGES/ANDRZEJ WOJCICKI

Non-members of the club, by contrast, would have to pay countervailing carbon duties on their exports to the club. The EU calls this a “carbon border adjustment mechanism” (CBAM). Unlike ordinary tariffs, the surcharges wouldn’t aim at making domestic producers more competitive but at spreading the cost of global carbon abatement. So, they should be allowed by the World Trade Organization. To existing members, the benefits of membership would be obvious, so the club would be a stable coalition. All others would quickly see the upside of joining the club by aiming for the same international carbon price at home. As a first and relatively small demonstration project, the EU could link its emissions trading system with whatever the UK implements, now that it’s left the European regime (thereby causing that system to shrink by 11 per cent overnight). Simultaneously, the Biden administration could work on the bigger goal of introducing a national cap-and-trade for the US.

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February 2021

How does the UAE fare?

Fossil CO2 emissions growth by sector, 2005 vs 2019 834%

150%

120%

Other sectors

Buildings

Other industrial combustion

Transport

72%

42%

Power industry

It’s that the rest of the world isn’t in the system. This both slants the economic playing field against European companies and leads to “carbon leakage.” Take a European steel company, for example. It must buy allowances to emit carbon, which is a cost. To avoid that cost, it can invest in technology that makes production cleaner, but that’s also expensive. By contrast, a Chinese steelmaker doesn’t incur this cost yet. A European firm that uses steel could therefore simply switch to buying it more cheaply from China than from the home market. The European steelmaker and its workers lose. And the world loses because the same amount of carbon – or even more – has been emitted, just elsewhere. Only the Chinese supplier wins. This is the classic problem of free riding, as analysed by the economist William Nordhaus, among others. The solution to the free-riding dilemma is the club model proposed by Nordhaus and now endorsed by sharp minds such as Guntram Wolff, the director of Bruegel, a think tank in Brussels. Here a group of countries would agree on a minimum international carbon price. All club members would then set about reaching that price with either a carbon tax or a cap-andtrade system, the equivalent of their club dues.

A SUCCESSFUL COLLABORATION AGAINST THE COMMON ENEMY, GLOBAL WARMING, COULD DEFUSE THIS CONFLICT – AND SAVE THE PLANET ALONG THE WAY

SOURCE: EUROPEAN COMMISSION

All the while, diplomats on both sides of the pond would be preparing the transatlantic carbon club, a trade zone without internal carbon duties. In the process, the Western democracies would once again act as world leaders playing on the same team. But their club isn’t meant to be exclusive. Rather, it would measure its own success largely by how many new members it can attract over time. It would welcome the world’s biggest emitter of greenhouse gases, China, with particular enthusiasm. Moreover, this kind of positive cooperation between rivals in east and west would have other benefits. Anxiety is growing that the enmity between the US and China could one day end as the contest between Imperial Germany and the British Empire once did: in war. A successful collaboration against the common enemy, global warming, could defuse this conflict – and save the planet along the way. gulfbusiness.com


ILLUSTRATION: GETTY IMAGES/FANATIC STUDIO

The Brief / Future

Rehan Khan Principal consultant for BT, educator and novelist

COMMENT

In the moment Three ways you can ensure your mind is not wandering and is focused on the present

H

umans like to think a lot about what they are not doing. Either pondering over the past, reflecting on what might happen in the future, or musing what could have happened but did not. Psychologists Matthew A. Killingsworth and Daniel T. Gilbert of Harvard University, described in the journal Science: “A human mind is a wandering mind, and a wandering mind is an unhappy mind… The ability to think about what is not happening is a cognitive achievement that comes at an emotional cost.” The psychologists developed an iPhone app that contacted 2,250 volunteers at random intervals to ask them how happy they were, what they were currently doing, and whether they were thinking about their current activity or about something else that was pleasant, neutral, or unpleasant. The respondents selected from 22 general activities, such as eating, shopping, walking and watching television. Remarkably, they reported that 46.9 per cent of the time, their minds were wandering. In other words, they were not present in whatever gulfbusiness.com

Mind wanderers

Almost half of surveyed people were not present in whatever they should have been doing

46.9% People said their minds were wandering

SOURCE: SCIENCE

they should have been doing. “Mind-wandering appears ubiquitous across all activities,” says Killingsworth. “This study shows that our mental lives are pervaded, to a remarkable degree, by the non-present.” The researchers believe that mind-wandering is an excellent predictor of people’s happiness. Based on time-lag analyses which they undertook, the findings suggested that respondents’ mind-wandering was generally the cause, not the consequence, of their unhappiness. “Many philosophical and religious traditions teach that happiness is to be found by living in the moment, and practitioners are trained to resist mind-wandering and to ‘be here now’,” Killingsworth and Gilbert note in Science. “These traditions suggest that a wandering mind is an unhappy mind.” The only way we are going to reduce mind-wandering is if we apply ourselves to the present. Here are three ways you can try and achieve that. Pay attention during virtual meetings. It is easy to start letting your attention drift away when you are on a conference call, particularly if it is audio only. We itch to check emails, messages and social media notifications. Every time this happens, focus really hard on orienteering your attention back to the meeting. This very act will strengthen your ability to concentrate, as you will be exercising your attention muscle. If you keep relapsing, ask yourself the question whether you need to be on the call or not, and whether it would be better to do something else related to your work at this time. Keenly listen. There are times when we sit with someone, but we do not take in much of what they are saying. We might be nodding in agreement, but we are not genuinely listening. When you keenly listen to someone, you bring all your attention to the conversation you are having. You do not think about a clever response to what they are saying, but you just consider their words and allow yourself time to reflect. People genuinely appreciate it when you bring complete attention to the conversation. One of the things I sometimes do is switch my smartphone into airplane mode, in order to create the right conditions to focus just on the conversation in front of me. Read with the flow. Unfortunately, few knowledge workers and professionals are spending time reading, preferring instead to use their devices to receive bitesize content which encourages skimming, but never penetrating the subject matter. As a novelist, I would obviously encourage you to read for the sheer thrill of it, but even from a perspective of productivity, when you are enthralled within a book, you are strengthening your attention muscle and your ability to stay focused. This is a vital skill in the professional world and will become more so in the future as the levels of distraction multiply around us. February 2021

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The Brief / Social COMMENT

Zaib Shadani PR consultant and digital marketing strategist, Shadani Consulting

‘Play next’

Video consumption in the Gulf countries is on the rise IN Q1 2020

% of Saudis that markedly increased their video comsumption 56% % has markedly increased their video-on-demand comsumption 50% % that spent at least two hours a day watching digital videos 46% % that spent at least three hours a day watching VOD 25% SOURCE: MAGNITT 2021 EMERGING VENTURE MARKETS REPORT

1) Nine seconds is all you get, so make it count People’s attention spans are the shortest they have ever been, with most people tapping out after a mere nine seconds. Which means that you only have a few critical seconds to grab the viewers’ attention and convince them that they need to keep watching. Front-load all your valuable content and make sure you don’t try to ‘build anticipation’ or have a slow reveal, because those tactics do not work in video content. Make sure your value proposition is clearly laid out in the first five seconds and people know exactly what they’re tuning in for.

Five tips to boost your video marketing strategy in 2021 Make sure your value proposition is clearly laid out in the first five seconds of your video content

V

ideo content is critical for all marketers, as was made crystal clear during the onset of the Covid-19 pandemic, when lockdown and social distancing forced everyone to get online, resulting in video consumption increasing by over 120 per cent. But what does it actually take to create an impactful and successful video marketing campaign? Is there a formula for creating a great video that keeps viewers engaged and resonates with the right audience? Here are five main tips that you should always keep in mind, as you plan and create your own video content. 12

February 2021

2) Don’t hard sell – tell your story instead Anyone who uses social media will tell you that they can spot a sales promo a mile away. Most users have no interest in watching videos that are simply advertisements for a brand. The videos that do well are the ones that add value, be it in the form of education or entertainment and enable the viewer to connect to the brand. We use stories every day to help understand the world around us and videos are a great way for businesses to share their voice and messaging; the more authentic and genuine a video is, the more likely viewers are to become invested in your brand and become ‘friends’ and ‘followers’. So stay away from traditional sales focused videos and instead opt for things like sharing your ‘origin’ story, interviews with management, explaining a trend or even promotional content, that is creative and emotional, as opposed to “hard selling”.

3) Subtitles are not an option – they are a necessity Almost everyone reading this article will have watched videos on their phone (or another device) with the sound off. It is estimated that nearly 70 per cent of people in public places watch social media videos with the gulfbusiness.com


The Brief / Startups Well funded

In MENA, the top five deals in 2020 accounted for almost a third of total funding (in US dollars)

sound off, which means that not only must your video be interesting for viewers when the sound is off, but that captions are critical to ensure a clear understanding of what’s being said. The ideal case scenario is a video that tells a compelling story without the need for audio, however, this is very difficult to execute, so captions are a great alternative.

60m Kitopi

35m EMPG

40m

4. Always have a call-to-action (CTA) The point of having a video is to cause some sort of action from the viewer and so it’s essential to include a specific call-to-action (CTA) that will direct people on what to do, now that the video is over. Many viewers leave a video after they have seen it, even if they enjoyed it tremendously, but that is a missed opportunity. As a general rule, every video should have a CTA where viewers are told what to do next. This can vary from getting them to subscribe to your YouTube channel, suggesting another video to watch, offering a free trial or even just leaving a comment below.

MANY VIEWERS LEAVE A VIDEO AFTER THEY HAVE SEEN IT, EVEN IF THEY ENJOYED IT TREMENDOUSLY, BUT THAT IS A MISSED OPPORTUNITY. EVERY VIDEO SHOULD HAVE A CTA

Vezeeta

SOURCE: MAGNITT 2021 EMERGING VENTURE MARKETS REPORT

A N A LY S I S

Promising outlook for the future Despite challenges, the region’s startup ecosystem has persevered, writes Zainab Mansoor

The UAE led the pack in funding and total deals in the region Total deals 26%

5. Social proof for social animals Man is a social animal and we love to use social proof when making decisions or justifying certain choices, like which businesses to support or where to spend our hard-earned money. The more evidence we are able to collect that our choice is the right one, the more inclined we will be to go with that option. This is why testimonials, reviews and recommendations are so important in business and the case is not so different when it comes to social media; the social proof that people look for takes the form of likes, views or comments on videos. gulfbusiness.com

36.5m Jahez

Startup haven Sometimes our clients aren’t sure what CTA they want to prompt, in which case an easy solution is to direct them to visit the brand website or get them to visit your other social media channels.

SellAnyCar.com

150m

Funding 56%

SOURCE: MAGNITT

W

hile the Covid-19 pandemic may have challenged individuals and institutions worldwide, small businesses were dealt a particularly harsh blow due to the sheer size of competition, low economic activity, and the need for continuous support. The region’s SME and startup ecosystem were also not entirely immune. Several e-commerce platforms shut shop last year, as the pandemic-induced economic downturn haemorrhaged demand and consumer confidence. UAE-based online marketplace Sprii went into liquidation late 2020, while local e-commerce portal Awok ended its operations, a year after closing a $30m funding round. Despite the effects of the pandemic and the hovering economic uncertainty, the GCC’s startup ecosystem did manage to garner substantial attention. Bahrain and the UAE featured among the top 100 countries for startups worldwide in 2020, while Dubai made it to the top 100 cities’ club, as per the StartupBlink rankings. Meanwhile, Bahrain and February 2021

13


Sharjah were listed among the world’s top five fastestgrowing ecosystems with fewer than 1,000 startups, according to The Global Startup Ecosystem Report 2020. Looking at the wider Middle East and North Africa (MENA) region, startups attracted investments worth $1.03bn in 2020, marking a 13 per cent yearon-year increase, according to a report by startup data platform MAGNiTT. The UAE led the pack with 56 per cent of the funding, equaling $579m, and 26 per cent of the region’s total deals, totaling 129. Bahrain, Saudi Arabia and Egypt registered the highest year-on-year increases in 2020, at 200 per cent, 55 per cent and 31 per cent respectively. However, the region’s total deal count dipped by 13 per cent to 496 transactions in 2020. Innovation hotspots – the UAE, Egypt, and Saudi Arabia – accounted for 68 per cent of the deals disclosed last year. E-commerce and fintech led the sectors race, securing the most number of deals (12 per cent each), followed by healthcare, delivery and logistics, F&B, and education, recording 5 per cent each. E-commerce meanwhile bagged the highest amount of funding, equaling $162m. F&B and healthcare more than trebled their funding to $122m and $72m respectively, the report added. “2020 was a tipping point for the venture-backed technology startups across MENA, Turkey and Pakistan as digital adoption hurdles were rapidly overcome in industries that saw unprecedented surges in demand as a result of the ‘new normal’ of social distancing,” opines Philip Bahoshy, founder and CEO at MAGNiTT. “More than ever before, we are seeing tech’s total addressable market grow in these countries, and we’re seeing founders, investors, governments, and 14

February 2021

ILLUSTRATION: GETTY IMAGES/DANE MARK

The Brief / Startups

496

Total number of deals in 2020 in the MENA region’s startup ecosystem

enablers capitalising on new opportunities as venture-backed startups look set to play a key role in national economies, employment, and GDP returns in the immediate future.” As individuals and businesses continue to operate in the ‘new normal’, a transition to digitisation and disruptive technologies, propelled by convenience and a change in consumer behaviour, is well underway. Given that the call to innovation stands, the regional startup ecosystem appears well-placed to grow and thrive. gulfbusiness.com


The Brief / Q&A INTERVIEW

Dr Fatih Mehmet Gul CEO, Fakeeh University Hospital

Explainer: Understanding the impact of Covid-19 on the GCC’s healthcare sector Healthcare providers have been forced to upgrade to new technologies and improve efficiencies What has been the impact of the pandemic on the GCC’s healthcare industry?

The pandemic has had a profound effect on all sectors. For the healthcare sector in the region, the pandemic precipitated the need to upgrade existing infrastructure and adopt remote patient management technologies on a larger scale. Covid-19 placed unparalleled demands on healthcare providers, who were not ready to deliver care without getting patients to the hospital. But while the pandemic has most certainly disrupted the healthcare industry, it has proven to be very agile in responding to the situation, with many providers championing innovation and reevaluating their business model. The GCC has seen a significant increase in the integration of digital healthcare solutions in hospitals. In the UAE, the Ministry of Health and Prevention recorded nearly 50,000 virtual hospital visits as of the end of Q3 2020. The response was truly amazing, and I believe this will make history.

50,000 The number of virtual hospital visits as of the end of Q3 2020 in the UAE

with the same number of medical teams that we had on the ground. When the UAE government informed us that they were setting up field hospitals, we did not hesitate to lend our medical equipment, ventilators, and beds to alleviate the pressure on the system. In your view, what are the main challenges facing the sector at present?

I believe talent retention will remain one of the key priorities for many providers, who are experiencing very high turnover rates. Covid has taken a significant toll on frontline healthcare workers across the world, not only from a physical perspective by exposing them to the coronavirus, but also mentally, with many experiencing higher-than-usual levels of stress. Unfortunately, talent management within the healthcare sector is not as popular a topic as in other industries. However, healthcare is our business, and at the heart of it are our people, doctors, nurses and clinicians, and if they’re not fulfilled then it’s unlikely patients will have the best experience and

Do you think the industry was prepared to deal with the sudden shift in dynamics – including remote consultations and the use of new tech?

gulfbusiness.com

ILLUSTRATION: GETTY IMAGES/MALTE MUELLER

The real challenge the industry faced at the beginning of the pandemic was managing the extraordinary numbers of patients with the limited number of available caregivers. Nobody was entirely prepared for that. Hospitals deploy and use their resources following a ratio devised on patients’ forecast numbers. With Covid, hospitals saw an unpredicted surge of patients. This meant providers had to rethink how to make their services accessible to more patients, implement new technology, but also learn very quickly how to utilise it to manage the high numbers of patients. In our Saudi operations, remote patient monitoring systems have been crucial to manage large numbers of Covid patients February 2021

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The Brief / Q&A INTERVIEW

MANAGING THE EXPENDITURE STARTS AT THE COST MANAGEMENT POINTS, AND HOSPITALS WHO CAN MANAGE THEIR COSTS WILL CONTINUE TO STAY IN THE MARKET

Fakeeh University Hospital is also a teaching facility – is that an area where you see more scope in the region?

outcomes possible. Talent management is not all about remuneration; very often it’s about providing career growth opportunities. The second biggest challenge in my opinion will continue to be cost management. Healthcare expenditure is increasing every single day for governments, and public and private hospitals due to the burden of chronic diseases, increased life expectancy and ageing populations. According to Alpen Capital, gross medical inflation rates ranged between 3.5 per cent and 9.1 per cent in the GCC during 2020. Managing the expenditure starts at the cost management points, and hospitals who can manage their costs will continue to stay in the market, while the others will find it very difficult to sustain their operations. Cost management can be simplified by implementing automated material management systems, which help monitor the cost and consumption of resources to ultimately provide the right service at the right cost.

Our region is predominantly populated by a young demographic, of which a significant portion may require medical training and education. Hence we certainly see a great opportunity to build our own local capacity development. Instead of sending their children overseas and outside the region, many families are looking for local solutions without compromising on quality. This is why we initially created our education arm in Saudi in 2003. Furthermore, with the UAE aiming to transition to a knowledge-based economy, unlocking the potential of local talent is not only important, but fundamental to the UAE’s economic development. Covid-19 has also propelled the development of local manufacturing for pharmaceuticals and vaccine production, which will increase the demand for home-grown talent in the near future. Looking ahead, what are the biggest trends set to shape the future of the regional healthcare industry?

You recently opened a massive $500m facility in the UAE – can you reveal the reason behind the huge investment?

Through our Saudi operations, we have achieved a proven business model of excellence for academic care delivery, which translates into our newly opened 350-bed university hospital. When we made the decision for expansion, we could have easily built a chain of four or five hospitals in the UAE with this investment. However, we wanted to create an institute, stretching across four-buildings, founded on academics, with locally and regionally based medical research and talent, all under one umbrella. Today, when we look at the UAE market, we see several chains of single focused hospital models; each branch specialises in a few therapy areas. This however can disrupt the patient treatment and recovery journey, especially if his or her chief complaint involves other clinical areas that require external expertise. For this reason, we wanted to bring an all-inclusive multidisciplinary care model, across 55 specialties, set to provide primary, secondary and tertiary care for more than 700,000 patients a year. Fakeeh University Hospital is also equipped with innovative diagnostic technology, advanced dataassisted and automated medication dispensing systems. Patient rooms have built-in smart systems and 16

February 2021

future plans also include a hospital navigation system to help patients move around the clinics and campus. Spread across 35,000 square feet, Fakeeh University Hospital’s emergency department is the largest in the emirate in the private sector. But most importantly, operating as the first teaching hospital in Dubai, it is set to provide medical education to the future generations of doctors in the region.

Big jump

$2bn

AI spending in the healthcare and pharma industries is expected to increase significantly

$463m

2019

2024

We expect to see an enormous uptake of medical technology innovations in the market. Artificial Intelligence (AI) will play an increasingly bigger role in emergency response, but also in predictive analytics. AI spending in the healthcare and pharmaceutical industries is expected to increase from $463m in 2019 to more than $2bn over the next five years. On the diagnostic front, technologies are expected to increasingly assist doctors to make faster and more accurate diagnoses. Preventive medicine will have an accentuated focus as well. Future technologies will encourage proactive digital engagement with high-risk patients, allowing doctors to actively initiate telemedicine follow ups, increase treatment adherence and improve the management of chronic diseases. Technologies such as drones, real-time dashboards and new types of surveillance tools will also be more in demand as a means to monitor and manage infectious and non-communicable diseases. The adoption of innovative outpatient management systems will help hospitals further manage future bottlenecks in emergency departments and triage patients more effectively, allowing providers to manage hospital resources more efficiently. gulfbusiness.com


The Brief / Economy

ILLUSTRATION: GETTY IMAGES/ZUBADA

on to. Employees in the UAE favoured novelties which include weekday lie-ins (35 per cent), binge-watching Netflix (33 per cent) and working outdoors (32 per cent), a study by cybersecurity company Kaspersky, recording the behaviours of 8,076 employees of small-to-medium businesses across several countries worldwide, revealed.

A N A LY S I S

New norms If remote working is here to stay, holding onto sacrosanct novelties may just be the wise thing to do, writes Zainab Mansoor

T

he months that followed the first appearance of the Covid19 strain early last year saw the world transform in more ways than one – individuals and institutions grappled with new ways of functioning; companies and industries made valiant efforts to stay afloat; and governments made several policy and structural changes to navigate the precarious situation. With the Covid-19 vaccination now available globally, there is hope that the spread of the contagion will be stemmed. However, the crisis brought on by the coronavirus has led to a compelling call for significant – and possibly permanent behavioural shifts. Many people took the pandemic as a cue to introduce several changes, hold on to novelties they discovered in recent months and step out of their comfort zones.

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A recent survey conducted by UAEbased Taqeef and AC manufacturer Midea revealed that 67 per cent of respondents in the UAE believe the pandemic pushed them out of their comfort zones. Consequently, 77 per cent have become more cost-conscious, while 79 per cent and 82 per cent have turned more environmentally and health-aware, respectively, the survey, which polled 1,000 respondents aged between 18 to 40 years, revealed. When quizzed on what constitutes ‘ultimate comfort’, 62 per cent of the respondents selected using the internet for sourcing information, followed by spending time with kith and kin (60 per cent), relaxing and taking it easy on weekends (60 per cent) and same-day delivery of online shopping items (41 per cent). Meanwhile, people working out of homes during the Covid-19 pandemic SOURCE: GALLUP unearthed treats they now wish to hold

THE PANDEMIC ALSO BROUGHT FORTH SOME PROFESSIONAL SHIFTS WITH A LARGE NUMBER OF EMPLOYERS GREATLY VALUING HUMAN CAPITAL As dining tables transitioned into workstations as part of remote working during the pandemic, people also changed their habits with 48 per cent attesting that they became used to working in comfortable attires and would like it to be the norm going forward, the Kaspersky study suggested. WHAT LIES AHEAD?

Besides personal transition, the pandemic also brought forth some professional shifts with a large number of employers greatly valuing human capital and the need for reskilling and upskilling. The future of work has already arrived for many of the online white-collar employees; a staggering 84 per cent of employers are set to swiftly digitalise their working processes, with the potential to transition 44 per cent of their workforce to function remotely, a report by the World Economic Forum suggests. “To address concerns about productivity and wellbeing, about one-third of all employers expect to also take steps to create a sense of community, connection and belonging among employees through digital tools, and to tackle the well-being challenges posed by the shift to remote work,” the report adds. February 2021

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The Brief / Infographics $3.69 trillion

Tracking the global Islamic economy As Muslim consumers increasingly seek out faith-based products and services, the Islamic economy is set for promising growth

$2.88 trillion

Buoyant economy

$1.38 trillion

A staggering $2.02 trillion of consumer spending complemented by $2.88 trillion of Islamic finance assets (2019 est.) 2019

2024

1.25trn

$1.17 trillion

1.9bn Muslims

24.1% of the world’s population

1trn

Covid-19 impact Global Muslim spend on halal products and lifestyle sectors has dropped (% YOY GROWTH, 2018-24)*

8

750bn

7.7 4.5

3.2

4.3

-8.1

500bn

2018/19

2019/20

2020/21

2021/22

2022/23

2023/24

$311bn $270bn 250bn

$194bn

$66bn

0

$76bn

Cosmetics

$208bn

$277bn

$222bn

$94bn $105bn

Pharma

Muslim-friendly travel

Media & recreation

Modest fashion

CONSUMER SPENDING ACROSS SIX REAL-ECONOMY SECTORS

Halal food

+

ISLAMIC FINANCE (ASSETS)*

*Islamic finance bars are proportional between each other, but not against the six real economy bars

18

February 2021

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Biggest markets Top 5 consumer countries in certain sectors

Nigeria $83bn

Egypt $95bn

Pakistan $82bn

4

3

5

Bangladesh $107bn

Indonesia $144bn

IN 2019 Halal food

2

1

Modest fashion

TOP 3 EXPORTERS TO OIC COUNTRIES HALAL FOOD

1. Brazil $16.2bn 2. India $14.4bn 3. US $13.8bn MODEST FASHION

1. China $11.5bn 2. Turkey $3bn 3. India $2.8bn

Avid travellers Due to the impact of the Covid-19 crisis, Muslim spend on travel is expected to fall to $58bn in 2020 and make a recovery to 2019 levels by 2023

1 2

Turkey $28bn

$194bn Muslim spend in 2019

Saudi Arabia $21bn

Iran $53bn

TOP 5 MUSLIM TRAVEL DESTINATION COUNTRIES (2019, inbound est. Muslim travellers)

1. Spain 7.6 million

$1.66 trillion outbound global travel

3

2. Turkey 6.4 million

4. Russia 5.6 million

3. UAE 6.2 million

5. France 4.9 million

4

5

Pakistan $20bn

Indonesia $16bn

Money matters Due to the Covid-19 crisis, the value of Islamic finance assets is expected to show no growth in 2020, but could rebound and reach $3.69 trillion by 2024 TOP 3 COUNTRIES BY ISLAMIC FINANCE ASSETS (2019) 1. Iran $698.2bn 2. Saudi Arabia 3. Malaysia 4. UAE

200.3 million outbound Muslim travellers (2019)

5. Qatar

$629.4bn

$570.5bn

$234.2bn $143.9bn

SOURCE: DINARSTANDARD STATE OF THE GLOBAL ISLAMIC ECONOMY REPORT 2020/2021

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February 2021

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The Brief / Lightbox

A Congress staffer holds his hands up while Capitol Police check everyone in the room as they secure the floor in Washington, DC on January 6, 2021. Supporters of Donald Trump stormed a session of Congress meant to certify Joe Biden’s election win, with the resulting riots and violence leaving five dead 20

February 2021

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February 2021

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PHOTO: OLIVIER DOULIERY/AFP VIA GETTY IMAGES


COVER STORY / YOUSSEF AL-BAHAR

TAKING T H E RIGHT STAND The UAE’s flexible and proactive legal system is helping the

country tackle issues such as cybercrime while also keeping

an eye on the future, says Emirati lawyer Youssef Al-Bahar

BY AARTI NAGRAJ 22

February 2021

P H O T O : J O A C H I M G U AY gulfbusiness.com


COVER STORY / YOUSSEF AL-BAHAR

FOLLOWING IN HIS FATHER’S FOOTSTEPS WAS NOT A DIFFICULT CHOICE FOR YOUSSEF AL-BAHAR.

T

he Emirati national is a passionate lawyer, and currently serves as the executive director of Al-Bahar Advocates and Legal Consultants in Dubai – the company founded by his father. An international certified arbitrator and regular columnist in the local media, he describes his job as a “noble profession”, which supports the application of justice in society. In an exclusive interview, Al-Bahar rattles off the history of the profession as proof that this is an industry that has evolved significantly over time and will continue to remain relevant far into the future. “The legal profession is one of the oldest professions in the history of mankind, with its beginning in the era of the ancient Egyptians and gaining further importance during the reign of Babylonian king Hammurabi, from 1792 to 1750 BC,” he elaborates. “The formula at that time was that a person submits to another’s authority to bring him innocence from his grievances, in the form of simple defence, as not every human being has the ability to defend himself. After that, the profession began to develop in the later stages of time, up to the modern era, when unions and associations were formed that are governed by clear and organised laws. “Also, this profession has been affected by political, social, and religious changes, the systems and methods of governance in different countries, and the way the judiciary is viewed and the extent of its independence. Every country applies the law that suits it, and it is our duty as lawyers to work on application of laws in the interest of achieving justice, defending our clients and reaching the truth,” he explains. An important requisite for the legal industry is to keep pace with the rapid changes in society. In the GCC, the last 24

February 2021

year saw several laws being introduced or amended, covering aspects from Covid-19 relief and company ownership to tax and labour regulations.

Combating cybercrime But one aspect that has gained particular importance in recent years – in line with the boom in the digital economy – has been the challenge of cybersecurity. The global cost of cybercrime is projected to hit $6 trillion annually by 2021, according to Cybersecurity Ventures’ 2020 annual cybercrime report. That is further anticipated to rise by 15 per cent annually over the next five years to reach $10.5 trillion by 2025, according to the report. Looking locally, over 80 per cent of organisations in the UAE reported at least one cyberattack in 2019, a survey of 150 senior IT executives in the country by cybersecurity company Proofpoint found. Over half of the organisations also reported multiple incidents, it stated. Meanwhile a report by Trend Micro predicts that UAE’s home networks, remote working software, and cloud systems will be at the centre of a new wave of cyberattacks in 2021. Trend Micro systems detected a combined 13,100,616 email, URL and malware cyber-threats during the first half of 2020, according to its Midyear Security report. According to the United Nations Conference on Trade and Development (UNCTAD), cybercrime is a growing concern to countries at all levels of development and affects both buyers and sellers. While 154 countries (79 per cent) have enacted cybercrime legislation, the pattern varies by region: Europe has the highest adoption rate (93 per cent) and Asia and the Pacific the lowest (55 per cent), it states. “The evolving cybercrime landscape and resulting skills gaps are significant challenges for law enforcement agencies

and prosecutors, especially for cross-border enforcement,” it adds. “Cybercrime has spread across the world due to the rise in the usage of the internet and the spread of social networking sites. There were countries that were able to cope quickly with this change [in the way crime was carried out] and they issued laws that punish cybercrimes with deterrent penalties. So they maintained the security of their societies. However, others were late in enacting laws, which led to the absence of a deterrent punishment for this type of crime that directly affects the rights of people, their money and their interests,” explains Al-Bahar. The UAE has been a front-runner in this aspect, thanks to its legislative flexibility, and its ability to be proactive in drafting laws. It has also established the so-called Smart Police, which is specialised in combating cybercrimes, while various laws and legislations have been enacted regulating communication through social media. “The UAE was keen to develop a special law to contribute to preserving the rights of others and preventing infringement and this came in the form of the federal law 5 of 2012 on ‘Combating Cybercrimes’, which includes penalties and heavy fines aimed at protecting society,” states Al-Bahar. Article 12 of the law states the penalty for a cybercrime in the country: “Shall be punished by imprisonment and a fine or either of these two penalties whoever gains access, without legal right, to credit or electronic card numbers or data or to bank accounts numbers or data or any other electronic payment method by using the computer network or an electronic information system or any information technology means.” A person found guilty of using the data to take over the funds to benefit from the services which they provide, can face imprisonment for a period of at least six months and a fine not less than Dhs100,000 gulfbusiness.com


“The evolving cybercrime landscape and resulting skills gaps are significant challenges for law enforcement agencies and prosecutors, especially for cross-border enforcement�


COVER STORY / YOUSSEF AL-BAHAR

and not in excess of Dhs300,000, or either of these two penalties. If the offender reached out to take over the funds of others – whether for themselves or for others – he/she can be jailed for a period of at least one year, and face a fine not less than Dhs200,000 and not in excess of Dhs1m, or either of these two penalties. “Of course, this is a heavy penalty in order to protect society and preserve people’s financial rights. There are also other crimes on the internet, including threats, insults, slander and others,” Al-Bahar says. The law also lists hacking – either of an email or a website as a crime, with the punishment increased when the hacked email is used to carry out fraud or when its contents are destroyed or published. The penalty for hacking currently carries imprisonment and a fine ranging between Dhs100,000 and Dhs300,000, or either of the two to “whoever gains access to a website, an electronic information system, computer network or information technology means without authorisation or in excess of authorisation or unlawfully remains therein”, the law states. In the event that the perpetrator deletes, removes, destroys, discloses, alters, copies, publishes, or re-publishes any data or personal information from the website he/she accesses, the penalty shall be the imprisonment for a period of not less than one year, and a fine of not less than Dhs250,000 and not exceeding Dhs1m. While the strict punishments will serve as deterrents to cybercrime, the best way to prevent such attacks is to raise awareness in society, says Al-Bahar. “The first line of defence to prevent cybercrimes is to raise awareness in societies of how they [such crimes] are being committed by fraudsters for a very important reason – these offences are considered ‘cross international borders’ crimes, so the victim may not be able to file a report against someone 26

February 2021

who defrauded him and stole his money because he lives in another country or continent thousands of kilometres away from him,” the lawyer states. “Hence we always emphasise the importance of not dealing with unreliable websites and not giving passwords to anyone, and not handing over our credit cards to anyone. If any person falls victim to a cybercrime, he must immediately address the bank to close his bank account, and submit a report to the police, because if the crime is local, all assistance

videoconferencing procedures for criminal proceedings and interrogation has been conducted and managed remotely. Currently, Dubai Courts conduct hearing proceedings in all cases 100 per cent electronically,” Al-Bahar says. “I believe that the remote litigation system has become a reality of today and cannot be discontinued by going back to the conventional method of litigation,” he adds. Another development that has made the UAE more attractive going forward is the easy arbitration options that it offers. Many companies, when looking to expand internationally, seek out nations with “clear laws” to ensure they are well-protected in times of disputes. “Many prefer to resort to the principle of ‘arbitration’ to resolve their disputes instead of litigation by the traditional methods, since the latter takes a long period of time. That is why Dubai was proactive and established the courts of the Dubai International Financial Centre. As an arbitrator, I see that companies have become aware of and prefer to reach a viable solution to their disputes via arbitration to avoid disrupting the process of production and refrain from long court cases,” the lawyer states.

and help can be provided to him, and the fraudster can be arrested,” he adds. The importance of being vigilant online is particularly important in the current scenario, where the Covid-19 pandemic has heralded new ways of working and living.

Compelling evidence

Winning case Talking about the pandemic, the UAE has been quick to adapt new modes of functioning, with the judicial sector seeing the rapid adoption of technological innovation. “Thanks to the adoption of a remote litigation system, it became possible for all to visit virtual courts and attend hearings more easily. The courts also have adopted application of

Looking ahead, Al-Bahar is bullish about the future – both professionally and for the UAE. “The UAE in general, and Dubai in particular, is strongly moving towards the future due to several factors, the first of which is the visionary leadership. The country possesses material and oil assets, human expertise, huge economic markets, and an ideal tourism environment, and this is what has prompted major companies to look to establish their own offices here. “The procedures for opening projects in the UAE are easy and require few administrative steps. On the legal side, there is great support through the type of litigation that a person will choose, whether in gulfbusiness.com


the regular courts or the Dubai International Financial Centre courts or through arbitration or through an agreement to choose a litigation mechanism. The UAE legal environment is an attractive one for work and economic activities,” he argues. The country’s economy will receive further momentum during the Expo 2020 event in Dubai, slated to begin later this year. The six-month long event, being held for the first time in the MENASA region, will be the “most prominent event” held during 2021 and will have a “very large organisational reflection on the movement of activity and commercial growth in the UAE”, opines Al-Bahar. “It will have an impact on various sectors, including hotels, aviation, marine, air and land commercial traffic, and it will be a one-stop-shop for all countries to display their most prominent innovations. The exhibition will also be an opportunity for all countries to closely examine the economic, urban and advanced technology environment of the UAE,” he states. “On the legal side, the UAE legislative environment is an ideal ground to support the efforts of Expo 2020 events, whether laws related to commercial movement and customs or others related

“The UAE in general, and Dubai in particular, is strongly moving towards the future due to several factors, the first of which is the visionary leadership” to the judicial or arbitration aspect, so the UAE is legislatively ready to host this huge global event,” he adds. The lawyer is also confident about the future of his firm Al Bahar Advocates and Legal Consultants, which is specialised in all types of lawsuits and has strategic partners in more than 400 offices around the globe. “We have been able to overcome many difficulties and challenges, and have become one of the leading firms in the UAE. We have a lasting desire and passion to keep pace with progress and development while maintaining the ethics of the profession to the highest global level,” he states. It certainly appears that Youssef AlBahar has a winning argument. gulfbusiness.com

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BRAND VIEW

Mapping today’s financial landscape With the pandemic upending the business landscape, what are the investment trends that we should look out for?

O

ne thing that is certain, we know that adjusting to changes can be challenging. Be it planned or unplanned, gradual or sudden, change is inevitable and very much part of being human. For almost a year now, we have experienced an unprecedented shift in our way of life due to Covid-19. We have reluctantly let go of our old normal and are now settling into what seems to be our new normal. There will be economic damage, but people are learning how to cope and businesses are adjusting. Many lessons will be learned and firms that survive will be more resilient and productive. Even when society starts up again post-pandemic, there will still be restrictions. In reality, we are facing fundamental shifts to our way of life. It is a worrying time for many individuals and businesses from both a health and economic perspective. But what the coronavirus crisis has shown is that people and organisations can be innovative, adaptable and resilient. Many companies moved quickly to keep pace with customers’ new demands by dramatically scaling up their digital footprints – including those from sectors not traditionally associated with online platforms. With the vaccines now being rolled out, the consumer economy is recovering as people slowly return to their daily lives. Rekindling growth in consumption is an absolute priority for policymakers, particularly as the global economic outlook continues to darken. An understanding of the broader economic outlook will be crucial for the future. It is increasingly clear that the current downturn is different from recessions of previous decades. We are experiencing not merely another turn of the business cycle, but a restructuring of the economic order. Undoubtedly, the business landscape has changed fundamentally; tomorrow’s environment will be different, but not less rich in possibilities for those who are prepared.

CHARGING AHEAD 2020 was nothing if not an unusual year, with a seemingly endless stream of twists and turns, and yet it seems to be green lights ahead for the bulls who have been driving global financial markets. Bitcoin is up over 500 per cent since January 2020; the S&P500, which started the year hitting an all-time high on February 19 – and despite suffering the fastest decline in history from that all-time high (30 per cent in 22 days) – is up another 8 per cent above the peak. Gold, long considered to be a favourite when it comes to ‘safe haven’ assets or hedging assets investors flock to in times of instability, reached a new all-time high last year peaking above $2,030 an ounce and is currently sitting at a year-to-date return in excess of 23 per cent.

BITCOIN – THE DIGITAL GOLD Even the most bullish of bitcoin advocates could not have foreseen its meteoric rise in such a short space of time. Cryptocurrencies like bitcoin and ethereum have indeed proven resilient. Bitcoin is a goldmine for those who know how to juggle between risk and profit

from minute to minute. Investor interest, both retail and institutional, in digital currencies, has risen dramatically in recent months. What will be next after the coin’s 2020 bull run? Some remain bullish – CitiBank’s forecast places bitcoin at $318,000 by the end of 2021, while others stay on alert that it could crash similar to January 2018. The heyday of cryptocurrencies may have come and gone, but it’s also possible that the crypto market still has a lot of upsides to go. We do know one thing for sure: cryptocurrencies were once positioned to upend the entire financial system. That kind of noise doesn’t disappear overnight, so expect to hear from bitcoin for another year at least.

WHAT NEXT? While no one possesses a crystal ball, our team of expert analysts, traders and blockchain specialists are hard at work ensuring our clients’ funds are being utilised in ways that are maximising their profits while reducing their risk as much as possible. Whether in the digital assets sphere, which is expected to continue its impressive growth, or in the $6.6 trillion foreign exchange (forex) market, which is expected to present a multitude of profit opportunities as different countries and entities trade in a postCovid world, our team is constantly monitoring and analysing these areas to find opportunities for profit for our investors. While 2020 was a year of new and challenging experiences adopting to a different way of life overnight, markets have bounced back and seem to be stronger than ever. It seems as if, in an instant,


the world adapted to a radical shift and this euphoria is expected to continue as vaccines begin rolling out across the globe, indicating a potential return to a “normal” way of life. However, we also gained some very valuable lessons that we should hold on to long after we move out of this phase. Key among those lessons is our need to maintain a strong connection with one another and the importance of making your money work for you. For brands and businesses, it is imperative that they strategise for this post-crisis future and create a roadmap for success going forward. Accelerating their digital transformation and recalibrating their corporate purpose

around the values embraced by consumers during the health crisis will be key. For some organisations, near-term survival is the only agenda, while others are peering through the fog of uncertainty, thinking about how to position themselves once the crisis has passed and things return to normal. The question is, “What will normal look like?” While no one can say how long the crisis will last, what we find on the other side will not look like the normal of recent years. The new normal will be shaped by a confluence of powerful forces – some arising directly from the Covid crisis and some that were at work long before it began.

While 2020 was a year of new and challenging experiences adopting to a different way of life overnight, markets have bounced back and seem to be stronger than ever

Through it all, technological innovation will continue and evolve at a faster pace, and the value of increasing human knowledge will remain undiminished. For talented contrarians and technologists, the next few years may prove especially fruitful as investors looking for high-risk, high-reward opportunities shift their attention from financial engineering to genetic engineering, software and clean energy. While moving from one transition period to another, it is crucial to have a trusted partner with a proven track record to help you navigate the uncertainty that lies ahead. For over a decade, AIX Investment Group has operated under a model of corporate sustainability that has proven to be resilient during these turbulent times. Luck favours the prepared mind. With all the uncertainty, one thing is certain, that times ahead of us are going to be tough, for individuals and businesses alike. In such a scenario, we are confident we can assist in your financial planning and help you generate passive income for a brighter future.


A NEW ERA With Brexit having come into full effect on January 1, how will the UK’s ties with the GCC evolve?

BY

AARTI

NAGRAJ


FEATURES / DIPLOMACY

It was a nail-biting finish, almost. The saga that was Brexit stretched on to the last minute, with uncertainty about whether the European Union and the UK would strike a trade deal or see an acrimonious ‘no-deal’ split. A historic trade deal was finally signed on December 24, a week before the end of the Brexit transition period, triggering relief on both sides.

The days following January 1, 2021 have been bumpy, with expected issues on the EU-UK borders – especially for freight operators. “As already seems to be the case after the first few days, the new arrangements are not without their challenges in terms of paperwork and red tape,” says Joe Hepworth, director of OCO Global, and founder of the British Centres for Business (BCB). “It seems that companies had preempted this (as well as a no-deal scenario) by stockpiling ahead of the year-end, so volumes have been relatively low. I would expect to see an increase in issues and frustration around all of the new processing that needs to take place as things pick up again,” he adds. It will take time to understand how smooth the transition will be, says Stephen Watson, partner at Expense Reduction Analysts, UAE. “After many years of being tied to an economic union, I am sure there will gulfbusiness.com

remain some significant challenges on exit. There are still a number of contentious areas such as rights to fishing and some significant matters not yet addressed such as the role the city of London plays in a banking and finance context. Consequently, it’s likely we are only seeing the tip of the iceberg in terms of next steps for Brexit,” he elaborates. In a note last month, consultancy PwC also cautioned that it is important to remember that while a deal has been agreed, it is not all encompassing. “Financial services is largely outside the trade agreement, and firms lose their ‘passporting’ rights to provide financial services to EU clients. A separate commitment has been reached to agree a Memorandum of Understanding by March 31, 2021, which should include arrangements for equivalence which may enable some financial services to be conducted between the UK and the EU. Nor does the deal provide for

a comprehensive approach for the mutual recognition of professional qualifications. Other areas have been earmarked for future clarification such as chemicals and data privacy, making it clear that the UK will continue to negotiate with the EU for the foreseeable future,” it stated. On a more personal note, while those on both sides of the Brexit debate may have valid views, it is key for all parties to be “positive” in the way they view the new UK/EU relationship, opines Helen Barrett, partner at CBD Corporate Services. “Britain has not left Europe, just the EU. Collaboration in most aspects of trade between the two parties remain unaffected and it is worth noting that the UK is the second largest contributor, after the US, to the western defence alliance, NATO, whose primary function is the defence of European nations, so the UK’s ties to the EU remain strong in more ways than just trade,” she asserts. February 2021

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FEATURES / DIPLOMACY

The GCC perspective Moving to this region, the GCC has historically enjoyed close ties with the UK, with the two sides cooperating on several fronts. According to UK government figures, trade between the UK and GCC stood at roughly $55bn in 2019, with the Gulf emerging as Britain’s third largest non-EU export destination behind the US and China. So will Brexit cause any disruptions to trade relations? “I wouldn’t necessarily see any insurmountable challenges for GCC countries. Point to point trade I would expect to continue as normal. Complications may arise where trade agreements exist between multiple jurisdictional parties and goods flow through UK and EU territories, but at this stage it’s difficult to be definitive,” says Watson. “I believe there needs to be further clarity in the financial sector – particularly with respect to UK domiciled banks trading in EU territories.” On the other hand, the positive impact of Brexit on bilateral relations would be far greater, argue experts. “In the short-term, the impact will be minimal. As there is no EU-GCC trade agreement that the UK has left, the terms of business and trade remain unchanged for both the UK and the EU. In the medium term, the prospect of a bilateral trade deal will obviously become more appealing and it is likely the UK will look to pursue this,” explains Hepworth. Steve Drake, board director of Strategic Partnerships at British Business Group (BBG) Dubai and Northern Emirates,

Joe Hepworth, director of OCO Global, and founder of the British Centres for Business (BCB)

Steve Drake, board director of Strategic Partnerships at BBG Dubai and Northern Emirates

agrees that ties only look to get stronger. “Some regional countries have historically been very strong trade partners such as Saudi Arabia and the UAE, the UK’s third largest trade partner. I would expect relations to strengthen and trade to increase as Brexit brings a degree of flexibility to the UK. I think this willingness to increase trade relations was very much endorsed by the recent visit of [Abu Dhabi Crown Prince] Sheikh Mohamed bin Zayed to the UK and his meeting with the British Prime Minister Boris Johnson and international trade ministers,” he says. Another advantage that Britain now has post-Brexit is that it can fix its own laws, regulations and standards for products and services. “In effect this means that the UK can be more flexible in negotiations with other countries as it no longer has to refer back to the EU for approval,” elaborates Barrett. Looking to the longer-term, all sectors

will benefit from collaboration between the UK and the GCC, she says. “The UK is a leader in financial services and technology and GCC countries have recognised these as important growth sectors for their economies, so perhaps these are the obvious targets. GCC investment in the UK is both significant and valued by Great Britain. Likewise, UK businesses and entrepreneurs view the GCC states as highly attractive investment markets,” Barrett explains. With the UK setting its sights firmly on a future path based on science, innovation and R&D – segments the GCC is also focusing on, they offer opportunities for collaboration, opines Hepworth. “Similarly, the UK has also been making bold pledges in areas such as decarbonisation and electric vehicles (new petrol vehicles will be banned from 2030), so this is another area where you can see skills, knowledge and technical transfer developing,” he states. BBG’s Drake also asserts that Brexit will provide further opportunities for cooperation between the UK and GCC countries. “There is more that can be learned and exported between them for mutual benefit. Regional strengths such as freight, logistics and real estate sectors could – for example – participate more in a UK economic context. Similarly, I think UK growth companies with innovation and technology related strengths could be more present in the GCC. So I think an active programme to facilitate such collaboration would ultimately support trade development.” As Barrett puts it: “Brexit, or not, the future for collaboration between the UK and the GCC is very bright in my opinion.”

“THE UK HAS ALSO BEEN MAKING BOLD PLEDGES IN AREAS SUCH AS DECARBONISATION AND ELECTRIC VEHICLES (NEW PETROL VEHICLES WILL BE BANNED FROM 2030), SO THIS IS ANOTHER AREA WHERE YOU CAN SEE SKILLS, KNOWLEDGE AND TECHNICAL TRANSFER DEVELOPING” 32

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BRAND VIEW

Powered by people Having a strong and capable team that is highly motivated is a critical factor for success in the current situation, writes Lucy Aziz, senior PR and Communication manager, OPPO GCC

I

n an ever-changing world, where the future depends on the view through a microscope, business strategies are being built for change. In such a volatile scenario, a strong and capable team that is highly motivated is one of the most critical factors for success. In a global technology company, where change is the most constant, people’s power is critical; hence my belief in the motto: “My best most valuable asset is the people I work with.”  Despite all the changes that the past year has brought, 2020 has reiterated this belief more than ever.  From my perspective as the senior PR and Communication manager at OPPO GCC, I believe that we have been able to win on the strength of our so-called ‘OPPO army’, which consists not only of our own people - from all departments and at all levels, but also includes the agencies we work with, businesses who support us, and government entities who enable and empower us.  OPPO is a very young brand, driven by young people and for young people. It is driven by ambition while at the same time living by a strong philosophy of ‘Benfen’ – the Chinese

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term that refers to one’s part or duty. It is focused on accountability. We believe it is our duty to share technology to make customers’ lives easier. This profound quest inspires us to constantly do more and do better. On a more personal note, the company’s passion for the region is what resonates most with me. Following a ‘glocalisation’ strategy, OPPO has adapted this to the GCC by localising strategies, operations and products to suit local audiences. Based on a keen understanding of the local market, we have succeeded in connecting with our audience in the GCC and communicating this local essence of the brand. As an Arab, it has been an honour to tell OPPO’s story from a local perspective. Since I joined

To me, technology is more than just a device; it’s a way of life

the OPPO team early last year, we have implemented several initiatives and campaigns to bring the brand closer to the regional audience, Bil Arabi being the most recent one. OPPO entered into a long-term partnership with the Mohammed bin Rashid Al Maktoum Knowledge Foundation (MBRF) to engage with UAE consumers. Leveraging MBRF’s Bil Arabi initiative, OPPO joined the Arabic International Language Day celebrations last year and activated an integrated communications programme and digital activations to engage, ‘edutain’ and reward local communities. Worth a special mention was the creative video content that saw OPPO employees from diverse cultures and nationalities come together to celebrate the local culture and express their love for the Arabic language. The glocalisation strategy has seen resounding success in the region. Within a short span of five years in the region, OPPO has risen to the top five smartphone companies by shipments. From a communications perspective, our share of voice has risen from fifth place to third place within the Android smartphones category.    A part of what contributed to this rise is OPPO’s impactful milestone campaign of the Reno4 series launch in the region. A great amount of effort was put in by the entire team to make the OPPO Reno4 series win the heart of the region’s consumers. From crafting messages tailored to our diverse audience to tap into the passion of consumers through multiple touchpoints such as gaming and photography, the four-month launch campaign was integrated, original, diversified, hybrid and overall meaningful, and hit over half a billion reach across print, online, social and broadcast media. And what better inspiration than success to forge the path ahead? As we begin 2021, we are poised for bigger and better things this year. We will continue to adopt a local approach tailored to every GCC market we operate in, and to reach out to the digitally creative, style-conscious and entrepreneurial young creators in the region through relevant and inspiring initiatives. OPPO’s strategy is built on making technological innovations accessible to local audiences in line with our theme, ‘Technology for Mankind, Kindness to the World’. To me, technology is more than just a device; it’s a way of life. We will continue to find opportunities to deliver unforgettable experiences that inspire people to fully express themselves through the art of technology.

June 2020 33


BRAND VIEW

New ways of working The time has come for businesses to flip what ‘work life’ means on its head, says Talal Bayaa, co-founder and CEO of Dubai-based HR and insurance tech startup Bayzat

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usinesses in the UAE must be prepared to transform their approach in order to attract the best employees and remain competitive in today’s challenging landscape. Businesses today are facing a wider range of pressures than ever before, particularly when it comes to attracting and retaining the best staff. An ever-growing number of competitors and evolving employee expectations are forcing businesses to reassess how they engage and support their employees. This complexity has been amplified in recent months by the Covid-19 pandemic, which has accelerated the pace of change. For example, the adoption of automation and cloud-based platforms has accelerated as businesses have focused on driving efficiency and agility. Employee attitudes towards benefits have also shifted. Nearly half (46 per cent) say the pandemic has made them reappraise the value of the benefits their employer offers when deciding to stay with or join a new employer. A third now want their employer to prioritise health over lifestyle benefits, while 21 per cent want greater access to wellness support. As we move forward into 2021, one thing is now abundantly clear: organisations can’t afford to overlook the importance of worldclass employee experiences. The onus is on UAE businesses to redefine work-life balance if they want to retain their best employees and drive growth in the months and years to come.

ENHANCING OPERATIONS Amidst shifting employee expectations, increasing operational efficiency has taken on a newfound importance. The new normal is being defined by constant adaptation and rapid innovation, which is where digital tools and platforms are playing a key role. Digitally transforming workforce management will enable businesses to streamline internal processes, cut costs and increase

Talal Bayaa, co-founder and CEO of tech startup Bayzat

Businesses must remember that the current generation of modern, forwardthinking employees expect the same from their employers. They want to be able to get more out of their working lives than previous generations

transparency to ensure a more effective workforce. This will put them in the best position to drive long-term success. Let’s take HR as an example. HR teams can spend a huge amount of time on administrative tasks that have traditionally required multiple different systems; from processing leave requests, to tracking attendance and managing insurance policies. HR professionals are believed to spend around 57 per cent of their time on these tasks, adding up to more than 1,000 hours a year. But, by centralising and streamlining HR operations, businesses can significantly enhance the HR function. As well as saving costs and driving productivity, reducing the admin burden will free HR professionals to focus on what really matters (and the thing that got them into the job in the first place): the people. Taking a digital-first approach can also provide valuable business intelligence through real-time data analytics and reporting – particularly on the insurance side. Businesses can stay up to date with policy details, upcoming expiries and pending requests, providing an increased level of visibility to help companies keep their premiums down upon renewal. These data insights will optimise HR processes and empower HR staff to dedicate more time towards adding value to the business and its people. The same is true for payroll. We’ve seen first-hand how easy it is for businesses to be overly reliant on complex or outdated payroll processes that result in a lack of accuracy and efficiency. Again, digital tools provide the solution. An integrated digital platform can significantly simplify payroll, helping businesses to save time and money, reduce human error and make the lives of staff easier. It’s a win-win situation: modernising workforce management enables business leaders to drive cost-efficiency, while empowering employees to concentrate on helping their organisation grow.


ILLUSTRATION: GETTY IMAGES/LUCIANO LOZANO

workplace – they should also have a material impact on people’s lives outside of work. Consider medical insurance, which can be a complicated and daunting prospect for employees. Often, they don’t know where to look, what they’re entitled to or how to manage the process. Giving them access to a platform that lets them easily find and book medical appointments, submit claims and oversee their policies can all significantly reduce stress. What’s more, the enhanced visibility and transparency empowers employees, in turn helping them feel more secure. Providing this level of bespoke insurance and medical services has traditionally been unattainable for many businesses – particularly SMEs – but is now possible through the Bayzat platform. We empower companies to cost-efficiently transform their employee benefits package with discounts on insurance policies, mental health support, employee wellness programmes and much more. The result is a happier, more productive and loyal workforce that gets to enjoy the benefits of a superior employee experience, making them much more likely to stay with you long-term.

DRIVING BUSINESS SUCCESS

DELIGHTING EMPLOYEES For any business, growth is dependent on the ability to hire and retain the best staff, especially in a region as transient as the UAE. People are your greatest asset, which means they must be supported and rewarded in the right way. This is key to fostering staff loyalty, as 32 per cent of employees say benefits are now equally as important to them as salary. Businesses must remember that the

current generation of modern, forward-thinking employees expect the same from their employers. They want to be able to get more out of their working lives than previous generations and feel like the company they work for truly cares about their experience. This desire can be satisfied through an empowering digital work life platform that simplifies access to employee benefits. And these benefits should go beyond the

Ultimately, the time has come for businesses to flip what ‘work life’ means on its head. Those that are prepared to transform their approach to internal operations and employee benefits will put themselves in the best position for long-term growth. This is what will help them drive internal efficiencies and meet the expectations of modern employees, thereby enabling them to attract and retain the best people in the future. All it requires is for them to truly embrace the era of world-class employee experiences, which is exactly what Bayzat enables. We’re leading the transformation by redefining HR, payroll, insurance and benefits – now is the time for businesses to invest in a new way of working that drives business success.


FEATURES / DIPLOMACY

UNITED FRONT

The resumption of ties with Qatar by Saudi Arabia, the UAE, Bahrain and Egypt will boost the regional economy with certain sectors set to witness a significant impact Aarti Nagraj

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or the Gulf region, the year 2021 started on a positive note. On January 5, during the 41st GCC Summit held at Saudi Arabia’s ancient city of AlUla, the kingdom – along with the UAE, Bahrain and Egypt – signed an agreement to restore ties with Qatar, ending the dispute within the region. The four countries had sealed all land, sea and air borders with Qatar in June 2017, accusing Doha of supporting terrorism. Qatar denied the allegations. The signing of the AlUla Declaration to restore relations “will be a strong and important foundation to the future of the region and its stability” Saudi Arabia’s Foreign Minister Prince Faisal bin Farhan told reporters at the time. The move was hailed as a significant step for the region. The restoration of ties between Qatar and the four Arab countries will “improve political and economic cooperation” within the GCC region, S&P Global Ratings said in a note. “We expect that the resolution of the boycott will support improvement in the region’s broader business and investment environment,” it said. During the embargo against Qatar, businesses operating throughout the Gulf faced disruptions to supply routes, transportation, recruitment, and scheduling obligations, law firm Wasel and Wasel’s Susan Bastress and Mahmoud Abuwasel said in a note. “Parties have sought to accommodate the impacts 36

February 2021

Nazar Musa, chief commercial officer of Pro Partner Group

of these disruptions through contractual provisions aimed at providing relief to harmed parties. These “workaround” provisions have resulted in increased costs to business operations, development projects, and ultimately the public at large, throughout the Gulf,” they wrote. With the agreement now in place, businesses should consider reviewing current contract obligations and how they would be affected by the elimination of embargo related disruptions. Companies that deferred bidding on projects in a particular GCC country due to political concerns can also revisit tender opportunities in these countries. “Businesses may also seek to re-establish relations with business partners in those countries where operations have been suspended,” the report added. Nazar Musa, chief commercial officer of Pro Partner Group – which assists in company formation, agrees that regionally-based businesses can now realistically consider opening operations in Qatar. “The opportunity also lies for Qatar-based organisations who wish to expand into other GCC jurisdictions. The movement of trade and services between Qatar and its regional neighbours has been significantly curtailed in the past few years and the opening builds overall confidence and creates opportunities across the board,” he says. Looking at trade, the embargo negatively affected imports into Qatar from countries previously supplying goods and services, including Saudi Arabia, Germany, China and the United States. These disruptions to normal trade routes resulted in part from the closure of the border between Saudi Arabia and Qatar, the Wasel and Wasel report explained. “For global exporters who utilise the Jebel Ali port as a single point-of-entry to the GCC market, the normalisation of GCC relations could result in reinstating efficient access to all markets within the GCC, as the Saudi-Qatar border reopens for sea-land transport. In addition, the ability to freely access all GCC ports would eliminate current port restrictions limiting imports from foreign markets such as India and China,” it added.

Looking ahead, regional events coming up including the Expo in the UAE this year and the 2022 FIFA World Cup in Qatar should allow regional and international trade to develop further gulfbusiness.com


PHOTO: KARIM JAAFAR/AFP VIA GETTY IMAGES

FEATURES / DIPLOMACY

Another major impact will be on the travel industry, with GCC nationals and residents now able to move between the countries with ease. “Over the past few years, even reaching Doha from the GCC involved hours of travel across multiple borders. At present there are still restrictions on arriving in Qatar since quarantine is required [due to Covid19]. So although the opportunities are great, they will certainly be delayed until meaningful business travel can be undertaken without quarantine,” says Musa. “Clearly aviation and travel will benefit greatly as airlines restart operations into and out of Doha. This will in turn allow GCC-based hotels and attractions [outside Qatar] to benefit from high spending Qatari travellers again and Qatari hotels restarting both business and leisure travel from the other GCC states.” He adds: “Looking ahead, regional events coming up including the Expo in the UAE this year and the 2022 FIFA World Cup in Qatar should allow regional and international trade to develop further and there’s every indication that by the time these events happen, vaccines will be distributed, and a level of normality achieved.” While S&P also stressed that Qatar’s intraregional travel, tourism, and real estate sectors will benefit most, it anticipates the impact on bilateral trade to be marginal. “Trade between member states is relatively limited given the almost uniform concentration of GCC member states’ exports on hydrocarbons and gulfbusiness.com

Passengers heading to the departure lounge to take the Riyadh flight at Hamad International Airport near Doha on January 11, 2021, as flights resumed between Qatar and Saudi Arabia

$30bn

in deposits were withdrawn by nonresidents from Qatari banks in June-October 2017 due to the blockade, according to Fitch Ratings

the lack of strong agriculture or manufacturing sectors in the region,” it said. Another major beneficiary from the agreement is poised to be Qatar’s banking sector. In a note, Fitch Ratings said the blockade led to the withdrawal of about $30bn of non-resident deposits from Qatari banks in June-October 2017, predominantly by Saudi Arabian depositors but also by some from the UAE, causing tightening of foreign-currency liquidity. “We expect Saudi clients, who withdrew deposits from Qatari banks due to the blockade, to start shifting some of their funds back. This will provide Qatari banks with an additional pool of liquidity, which will diversify their funding base, reduce their reliance on price-sensitive government-related entity and corporate deposits, and cut their funding costs,” it stated. “The end of the blockade should encourage GCC tourists back to Qatar when the pandemic eventually eases. This should help reduce the pressure on the country’s distressed real estate and hospitality sectors, which are the largest sources of asset-quality problems for banks,” it added. Overall, the agreement will project a stronger and more united GCC front, helping the regional economy as a whole. As the UAE’s Minister of State for Foreign Affairs Anwar Gargash tweeted immediately after the signing of the agreement: “From the hall of mirrors in AlUla, a bright new page begins.”

February 2021

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BRAND VIEW

Phi Trends: Cleantech Ideology or opportunity? The focus on sustainability means that cleantech offers strong potential for growth, states entrepreneur and investor Shailesh Dash, who shares his market perspective in this monthly column

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orld leaders have recogaction plans to this effect. rise of over 740 per cent in 2020, and traded nised the risk around climate In recent years, major corporations have at a high trailing earnings multiple of 1,000x. change and are aggressively dedicated billions in funding towards cleanStock market interest has also been satiated looking at ways to reduce the tech innovation. Jeff Bezos’ $10bn climate by other cleantech companies such as Nikola long-term risks. This gave birth to the Paris fund, which was launched in 2020 to promote Corporation, hinting at a strong outlook for the agreement in 2015, which was the world’s efforts towards preserving and protectsector in the near future. first legally binding global agreement aimed ing the natural world, stands as proof of this The global investment landscape is now at limiting temperature by 2 degrees celsius. shift, as well as the steadily rising interest and seeing a synchronised shift towards an inteIn the coming years, similar initiatives will be investment within cleantech. Global organisagrated ecosystem, with capital directed undertaken to mitigate and reduce the rising tions have also launched funds, such as the toward addressing diverse avenues with risk of climate change. It is equally important International Finance Corporation’s Clean scope for innovation. Policymaking at the for industries and businesses to adapt and Technology mission, and United Nations’ national and government level as well, has support such initiatives, which has led to the Global Cleantech Innovation Programme, entailed a horde of initiatives aimed at promotemergence of clean technology or cleantech. among others. Most notably, big corporations ing sustainability in business. Consequently, Cleantech offers a vast and diverse have been widely adopting green mandates cleantech has become synonymous with range of sustainable technologies and soluand investing heavily into clean technology opportunities to avail massive gains by remaintions across clean energy (biomass, solar to create not just sustainable, but also profiting invested in the long term. With promising power and manufacturing, alternative power able business opportunities. Key global oil and long-term benefits of improved environmental supplies), water (wastewater treatment, gas majors are also recognising opportunities efficiency and productivity due to lower costs, desalination, smart water, etc.), waste (conin the energy transition away from fossil fuels, inputs, waste and energy consumption, along version to energy, recycling, gasification, etc.), evident by the combined $3.4bn invested with economic pluses via new job opportunibioenergy, green buildings, electric vehicles, by them into low-carbon technologies. This ties, cleantech as both a sector and investment and more. In recent times, the ecological need inclination has also reflected in capital market avenue is appearing more lucrative. for reducing, or to some extent eliminating activity, especially the traction and investor In sync with this sentiment, the stock the negative environmental impact of carbon interest in electric vehicle pacesetter Tesla, market has cherry-picked select cleantech emissions, has become the driving force for during the past one year. As the company stocks that exhibit the potential to create several investment and business decisions. continued to invest into its innovative technolmeaningful environmental impact, and has Moreover, as rising industrialisation and ogies, Tesla’s stock price witnessed a share accredited them with strong valuations. For urbanisation creates a structural carbon Performance of Top Cleantech Stocks lock-in and increases the consequential Company Market Cap Revenue EPS P/E P/B P/S EV/ EV/ Stock Price 52-Week threat of rapid climate Name (USD bn) (USD bn) (USD) Ratio Ratio Ratio Sales EBITDA (USD) High Low change, overpowerSolarEdge (SEDG) 14.5 1425.7 3.7 76.5 14.0 9.2 11.6 87.3 282.3 377.0 67.0 ing masses of climate Plug Power (PLUG) 28. 1 230.2 -0.3 38.0 60.8 92.4 -464.2 60. 1 73.9 2.5 scientists are voicing the need to act immeClean Energy Fuels Corp. 1.9 344.1 0.1 96.9 3.8 5.9 6.0 22.3 9.8 11.7 1.1 (CLNE) diately to reduce emissions, prompting Blink Charging Co. (BLNK) 2.0 2.8 -0.4 - 92.1 295.4 349.5 -136.5 47.1 57.9 1.3 corporates, busiEnphase Energy Inc. (ENPH) 24.1 624.3 1.1 181.6 57.8 32.9 36.3 208.3 190.6 222.4 21.5 nesses, and even governments to pri*Note: Data as of January 15, 2021 SOURCE: BLOOMBERG, YAHOO FINANCE oritise and implement


Shailesh Dash

instance, SolarEdge Technologies, a solar energy company providing power optimisers, solar inverters and monitoring systems, has boasted of strong fundamentals, with its quarterly revenue growing at an average rate of 38 per cent over the last five years. Despite revenues being hit in 2020, the company witnessed a 236 per cent surge in its market capitalisation during the year, to reach a valuation of $16bn. Meanwhile, Plug Power has proven to be a leader in the hydrogen fuel cell domain, moving rapidly with its proven technology to pursue strong market opportunities. With customers including Amazon and Walmart, it recently secured important partnerships, including a $1.5bn agreement with South Korea’s SK Group in exchange for a 10 per cent stake and expansion into the Korean and broader Asian markets; and another with French automaker Renault to enter the European light commercial vehicle market and build fuel cell vans in Europe. These positive developments and earnings expectation led to a whopping 973 per cent surge in its stock price in 2020, and another 77 per cent in the first two weeks of

Over the next few years, cleantech offers huge promise to not just create sustainable impact, but also presents lucrative business and investment opportunities 2021. Clean Energy Fuels, on the other hand, offers natural gas fueling solutions, and holds promise in terms of contributing significantly to the evolving energy landscape transition. In December 2020, the company partnered with two firms to build carbon-negative renewable natural gas fuel facilities and infrastructure, pushing its stock price up 73 per cent in the month. The company’s stock price surged

by 236 per cent in 2020, and added another 25 per cent at the end of January 15, 2021. Blink Charging Co. was another company that benefited from the wild market frenzy into electric vehicle charging infrastructure. Blink’s revenue nearly doubled y-o-y in 2020, and the rising appeal of its sector pushed its stock a mind-boggling 2,198 per cent in the year. While its fundamentals remain subdued, the company’s market appeal provides it with the required capital to plan ahead for expansion, and create a feasible strategy to become a standout long-term growth stock. Lastly, Enphase Energy is another solar stock that comes as the whole package. It boasts of strong operational fundamentals ($39.4m in net income, and a robust 41 per cent gross margin and 24 per cent operating income in Q3 2020), as well as notable business developments (partnerships with solar module manufacturers, providing micro-inverters to top European solar panel manufacturers, growth in its energy storage segment, and ramping up volumes of its new storage product). Accordingly, its stock rose 572 per cent in 2020, and continues to surge. Over the next few years, cleantech offers huge promise to not just create sustainable impact, but also presents lucrative business and investment opportunities. Moreover, the global climate agreement, together with the backing of major world leaders such as US President Biden’s new stimulus blueprint that includes an emphasis on clean energy, are likely to firmly sustain this sentiment. In coming years, deployment and adoption of clean technologies and innovations will continue to expand. Bloomberg New Energy Finance experts suggested world renewables capacity investment could reach about $300bn in 2020, while the Global Commission on the Economy and Climate estimated global economic benefits from investing in climate solutions at $26 trillion by 2030 in its 2018 New Climate Economy report. Given the scalability, efficiency, and sustainability cleantech offers, and most importantly, the urgency of deploying this industry in full swing, the market appears as one definitely worth getting into.

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.


FEATURES / TECHNOLOGY

Middle ground DIGITAL TRANSFORMATION SAVED MULTIPLE BUSINESSES FROM UNTIMELY DEMISE; IT WILL ALSO DRIVE IN THE NEW ERA OF THE HYBRID WORKPLACE

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he initial foray into workfrom-home in 2020 was forced – its permanence will be the result of more deliberate efforts. As the Covid-19 fog dissipates, the benefits of flexible work models are becoming all too apparent. Global companies such as Microsoft have said most roles will remain remote while Twitter and Square have said more of their workforce can work from home permanently. In May 2020, Facebook said it would eventually begin allowing most of its employees to request a permanent change in their jobs to let them work remotely. The change of heart is because businesses soon realised they can attain even better productivity from a remote workforce, observes Aongus Hegarty, president, International Markets, Dell Technologies. Employees too are expressing their feelings, making it well known they prefer this hybrid mode of working. Although most employees do not necessarily want to work 100 per cent remotely, many prefer to be in the office a few days a week and work the rest of the week from home, he adds. Businesses are simply looking at doing things differently, says Chris Cooper, director and general manager, Lenovo

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February 2021

Data Centre Group MEA. “Businesses are not expecting to go back to as it was. As they continue down their digital transformation, there’s an acceptance that there will be a higher degree of mobile working.” That is all well and good, but the permanence of hybrid work models will require businesses to re-evaluate their technology stack. IT systems in existence were largely designed for a predominantly office-bound workforce. Although the technology for the remote workforce such as virtual desktop infrastructure (VDI) has been in existence for a while, few organisations took an interest. There’s no fast rule for how to enable a remote workforce. A good place to start is to identify the job profile of your employees, says Hegarty. “Some employees are involved in transactional tasks so a VDI solution favours them. Some require mobility solutions as they will be required to operate from multiple locations. Others work with a lot of data, so they’ll need a powerful desktop or laptop.” The second consideration is the IT management angle – how to deploy IT systems, how to maintain them, patch them, migrate them when shifting, install remote working tools, etc. Lastly is how to keep these systems secure within an expanded exposure landscape, says Hegarty.

PHOTO: GETTY IMAGES/VASILINA POPOVA

BY DAVID NDICHU


FEATURES / TECHNOLOGY

Digital transformation Many organisations had committed to some form of digital transformation, albeit at a much more leisurely pace. The coronavirus put those plans in the fast lane. Digital was always important, but nobody understood how crucial until Covid-19 showed them, observes Mohamed Al Qubaisi, chief technology officer at Injazat Data Systems. “There were a lot of things that were not in place from a digital perspective to help with the sudden shift. So digital platforms had to be created on the fly.” Injazat for instance released the Abu Dhabi Department of Health RemoteCare app for non-Covid patients to have access to physicians and medicine subscriptions during lockdowns. “The need was there even before Covid19 for such platforms but there was no urgency. Covid-19 changed all that. This shows people that they need to be ready for disruptions in the future,” says Qubaisi. He highlights the risk to other businesses with no digital plans in place. According to some statistics, 70 per cent of restaurants that closed or were affected by Covid-19 may never open again. They are instead being replaced by digital-first cloud kitchen concepts. There was a risk businesses would hunker down and try to ride out the Covid mayhem. The opposite happened as organisations accelerate their digitalisation efforts. “As people realised that they have to move to mobile working, tools such as Microsoft Teams or Zoom soon became mainstream,” says Cooper.

Aongus Hegarty, president, International Markets, Dell Technologies

of traditional data centres, it has to be computed outside that as well, or on the edge. And then there’s the explosion of the number of devices that are getting connected to the internet, estimated to be around 80 billion by 2025. The pandemic has accelerated the gap between edge and cloud. “The edge computing environment, which has a degree of artificial intelligence and analytics is now being connected to existing data centres and cloud infrastructures,” says Cooper. The shift to remote workplaces and the financial pressure emanating from Covid-19 is accelerating previous shifts towards as-aservice or pay-as-you-go delivery models. Hegarty says Dell is shifting its technology stack towards an as-a-service model which will eventually be rolled out across

Cloud The initial demand when the pandemic struck was for computing devices such as laptops, as well as the applications and security tools that go with that. But as WFH models mature, businesses are pivoting towards infrastructure and cloud to empower their remote workforce says, Hegarty. The major cloud providers have been winners in the Covid-19 era, as seen in their exploding customer base and stock valuations. “There’s a huge growth in new data outside of traditional data centres and cloud around edge computing, and the requirement there for new infrastructures and new ways of doing things,” says Cooper. As new data is being generated outside 42

February 2021

“As they continue down their digital transformation, there’s an acceptance that there will be a higher degree of mobile working”

its markets. Dell launched its financial services arm in the Gulf as a step towards enabling this model, he adds. Related to this is the shift from CAPEX to OPEX models. “Technology is now a major part of investments companies make. Providing technology as a variable cost OPEX model means organisations do not need to tie up significant working capital in technology-related outlay,” says Hegarty. Organisations initially struggled with cybersecurity as many lacked the tools to secure remote work environments. Technology companies like Dell have responded with more aggressive cybersecurity architectures. “Today, data and protection of that data are built into the infrastructure solutions now. Security is now built into the workforce transformation solutions as well,” Hegarty says. Injazat recently launched its Cyber Fusion Centre (CFC) cybersecurity offering which combines forensics, threat detection and response, vulnerability management, vendor and malware analysis, intelligence sharing and analysis, and APD Hunt. “We handle citizen data, so we need to make sure that is protected and managed in the right way,” says Qubaisi.

Business strategy Businesses are still figuring out how to evolve their operations in this new era. Qubaisi of Injazat says business models have to change in this new reality. He cites healthcare that continues to be reactive, i.e., you need to wait for someone to get sick then they need to report it. Transitioning from a reactive to proactive care strategy requires healthcare systems to embrace digital transformation and roll out new capabilities that tailor patient care to the individual. “So, you’re now changing the business model and the impact becomes significant. And this is what digital transformation will do for healthcare as an example to disrupt the status quo, and to do things very differently in a modern way,” says Qubaisi. Hindsight is indeed 20/20. While many business leaders wish they had paid heed to calls for digitisation, the pandemic has proven why transforming business processes through the latest digital technology is important. When the next disruption hits, and it will, sooner or later, most will be more prepared next time around. gulfbusiness.com


ILLUSTRATION: GETTY IMAGES/MALTE MUELLER

S P E C I A L R E P O RT

THE FLIGHT OF E-COMMERCE


SPECIAL REPORT

A world to deliver BY ZAINAB MANSOOR

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echnologically-savvy consumers; high internet penetration; a 360-degree product suite; and the Covid-19 pandemic. E-commerce arrived. The year 2020 was more than just the closing of a decade; it was an inflection point for individuals, businesses, and economies around the globe. The arrival and spread of the Covid-19 virus slowed several industries, upended the supply-demand balance, and caused many to rethink their strategies for survival and mitigation. On the other hand, the pandemic also piloted innovation, rejuvenated several sectors, and marshalled the growth and adoption of digital solutions and channels that fell in step with virus containment measures across the globe, helping curate the ‘new’ ecosystem.

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In the days and weeks following the outbreak of the pandemic, consumers and businesses pivoted towards technology, albeit for different reasons: The latter resorted to digitalisation to retain customers, capture market share, and emerge gainfully on the other side of the crisis. The former, meanwhile, ventured online to shop, learn and work. E-commerce, having deep interests on both sides, rose as a natural winner. “The Covid-19 was a good booster for e-commerce players because it taught them that in case of a huge surge in business, how were [areas such as] operations and customer service going to handle it. It’s almost like a steroid shot to the e-commerce industry because all of a sudden, everybody had to use it,” opines Rashid Mohamed Alabbar, board member at UAE-based Barakat. “Anybody who was able to capitalise during Covid to give a good experience to customers in terms of delivery, in terms of the quality of the product, obviously will have an amazing advantage because you are going to be increasing your loyal customer base.” Taarek Hinedi, vice president of FedEx Express Middle East and Africa operations, expands on it: “While e-commerce has long been a popular method of shopping across the Middle East, during the Covid-19 pandemic it has grown to become the retail option of choice. Both consumers and retailers have shifted their focus to safer and more effective ways to keep commerce moving in a challenging environment. “Looking at recent consumer behaviour and spending habits, many companies are now strengthening their online presence and using e-commerce to make their products and services more accessible. In the first five months of 2020, the UAE saw a 300 per cent increase in demand for e-commerce services among consumers. In May 2020 alone, e-commerce represented the highest number of licences issued to any business sector.” If history is a precedent, the sector’s growth trajectory is, in many ways, expected. From a mere $5.3bn in 2015, rising to $17.7bn in 2019, the GCC’s e-commerce market is expected to become an almost $50bn market by 2025, a report by Kearney Middle East notes. Two salient factors will drive this growth: more, newer and digital-savvy shoppers – millennials account for more than 45 per cent of the user base, which is growing at 6 per cent CAGR; and more growth in key segments – online food delivery and grocery are expected to grow by 30 per cent each year until 2025, while fashion and beauty is forecast to experience annual growth of 18 per cent over the same period, the report suggests.

Test of resilience E-commerce, similar to the technology underpinning it, has gone through several layers of disruption. But the pandemic arguably made the most compelling case for its evolution and usage, promising convenience, safety and efficiency all bundled in one offering.


ILLUSTRATION: GETTY IMAGES/TALAT KARAGOZ


ILLUSTRATION: GETTY IMAGES/DANE MARK


SPECIAL REPORT A Mastercard study revealed that nearly three out of four UAE consumers (73 per cent) are shopping more online than they did prior to the pandemic, with FMCG (fast-moving consumer goods), healthcare, apparel and banking seizing the highest spike in online activity. Social media too played a fair role in engaging consumers online as 72 per cent and 56 per cent of respondents discovered new sellers through Facebook and Instagram respectively, the survey confirmed. This tide, in the face of growing digital comforts, is set to gather further momentum and extend gains across the region. “Our model shows that there will be a larger acceleration in e-commerce between 2020 and 2022, at 20 per cent CAGR, and a gradual growth at 14 per cent until 2025. Without Covid19, the same growth was projected at 14 and 10 per cent, respectively. For businesses with a physical footprint, this could mean bumps in the road as current trends show a significant drop in store sales versus 2019, while online sales have tripled or even quadrupled,” the Kearney report expounds. However, despite the impetus it provided, the Covid-19 pandemic proved to be a litmus test for various operators – for retailers, it tested their resilience to survive the shift from offline to online, ramp up or launch their digital presence or collaborate with existing marketplaces to push products through digital channels. For e-commerce players, it tested their resilience to handle the surge in online traffic, customer orders, and last-mile challenges to ultimately engage and retain the enduser for healthy bottom lines in a challenging economic climate. “This past year has been a challenge for all businesses, ours included. In early 2020, we accelerated the development of noon Daily, our dedicated grocery platform, and nownow, our on-demand app. Both products were in the pipeline for much later launch dates but, due to the changing needs of consumers, we launched both during the lockdown in April and May. In addition, 2020’s Yellow Friday sale was our largest yet,” says Maya El Ayach, SVP, Growth and Digital Strategy at noon. “Over the past nine months adoption of e-commerce in the region accelerated, trust increased, and overall reliance on a more digital lifestyle grew. We watched as noon became a utility that people relied upon for the safe delivery of essentials, groceries, and so much more. Noon was created to give people in the Middle East a local digital champion, a platform through which businesses can expand their offering online. We believe the love for e-commerce will only get stronger and that we’ll see more local SMEs and businesses joining noon to reach digital audiences.” As the world queues up to receive the Covid-19 vaccine in a wider attempt to contain the infection and return to life as we knew it prior to the pandemic, a far sterner test for retailers awaits amid what is expected to be a competitive landscape. As e-commerce gains further ground and a sizeable contingent of consumers transition from offline to online, traditional retail brands will face the heat as physical stores struggle to stay relevant and feel burdened by costs of operating omnichannel approaches. “We believe there is room for both brick-and-mortar and online shopping moving forward. Focus must be placed on

creating a more seamless and enjoyable shopping experience for the customer – be that online, in-person or omnichannel,” suggests noon’s El Ayach.

Immune to failure? The sheer rockface of competition with a growing number of operators vying for the same consumer basket and the precarious path to securing investment all come together to form a potentially challenging concoction for new and existing e-commerce companies. Mohammed Dhedhi, principal at Consumer Industries and Retail Practice at Kearney Middle East explains: “The Middle East is now a key battleground for regional and global e-commerce players, each of whom are fighting to stamp their dominance and capture market share. Global experience shows that e-commerce winners are few and need deep pockets as players are competing on price, marketing spend and delivery, and losing significant money in doing so. In the region, smaller businesses struggled to compete across all of these areas as players with deeper pockets were able to spend their way into share.” Several online platforms shut shop last year, as the economic downturn battered businesses and eroded bottom lines. In H2 2020, UAE-based online marketplace Sprii went into liquidation, while local e-commerce portal Awok ended its operations a year after closing a $30m funding round. Online fashion platforms Nisnass and The Modist too shut shop last year. To boost chances of churning out a profit, companies must stay alert to three stumbling blocks: inefficiencies in the supply chain, changing consumer behaviour and an excessive focus on boosting demand through marketing and promotions, the Kearney report suggests. “While offering discounts, holding large sale events, and investing in online ads can increase customer numbers, we found that it can also inadvertently add 3 to 5 per cent to selling, general, and administrative expenses (SG&A). With the

“The Middle East is now a key battleground for regional and global e-commerce players, each of whom are fighting to stamp their dominance and capture market share” 47


SPECIAL REPORT

Winning the last-mile There is now a growing consensus that the Covid-19 pandemic has etched a profound change on consumer behaviour, and that online shopping will account for a sizeable portion of the shopper’s basket size moving forward. Hence, there is no better time for online retailers and logistics partners to course correct and align their last-mile strategies. “Consumers are more demanding with e-commerce becoming more prevalent. The advent of same-day, next-day delivery along with multiple payment options at a consumer’s disposal such as COD, CCOD, payment plans, ‘buy now pay later’ options, delivery where you want it, are all testaments to the evolving last-mile delivery in recent years,” opines Forster. With instant gratification turning into a key differentiator and next-generation technologies shaking up delivery chains, the last-mile ecosystem is expected to go through further disruption. “As e-commerce penetration increases across the region, service providers are focusing on the development of flexible delivery options which are convenient, safe and secure. Delivery chain innovations will target the development of solutions that provide seamless last-mile delivery experience to the consumers,” notes Sivan T J, senior consultant, Supply Chain and Logistics Practice at Frost & Sullivan. Solutions to overcome the challenges associated with lastmile delivery include click and collect, digital locker boxes, micro-distribution centres, and delivery automation, he adds. As disruptive technologies such as automation, AI and tracking software are adopted across delivery channels, digitalised solutions may see a larger role in the regional e-commerce ecosystem as operators seek to streamline shipments in the last leg, while optimising resources and achieving greater viability. “Inventory management and optimisation, route navigation and scheduling, parcel tracking, condition monitoring, and delivery automation are some of the areas with potential for digitalisation. Autonomous transportation, supply chain automation supported by big data analytics, artificial intelligence, wearables, predictive inventory optimisation and warehouse automation are likely to be adopted by service providers. The use of autonomous driverless vehicles, electric vans and drones is also expected to gain prominence for delivery of e-commerce related parcels,” explains Sivan T J.

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“Delivery chain innovations will target the development of solutions that provide seamless last-mile delivery experience to the consumers” E-commerce companies have already warmed up to the new technologies and are adopting alternative and optimised solutions, while logistics providers and startups are seeking innovative delivery methodologies. “To increase convenience for our customers, we have deployed hundreds of noon Collect lockers across the UAE and Saudi Arabia. In Dubai, we launched our autonomous vehicles, driverless vans using AI technology, stocked with F&B essentials for on-the-go consumption. We have also been working closely with our retail partners to incorporate a better collection network including drop shipping and more localised processing hubs. Getting orders from our retail partners to our customers as smoothly, accurately, and swiftly as possible is a top priority. Which is why we’re also testing drone deliveries for future last-mile developments,” observes noon’s El Ayach. Similarly, in a bid to optimise delivery, UAE tech startup Fodel offers a network of pick-up locations as an alternative to home delivery. Transforming local merchants into pickup points, Fodel is enabling online consumers to collect their parcels from a place and at a time most convenient to them. “Delivery is the most stressful part of the online shopping experience. Customers have to change their schedule to be home to wait for the parcel, they usually get multiple calls from the drivers asking for directions and in the worst cases, they miss their delivery and it gets postponed to another day,” opines Soumia Benturquia, CEO and founder of Fodel. “Fodel puts an end to the uncertainty associated with lastmile delivery in the GCC by making the process simple and convenient. Customers purchasing online can now select a store nearby like a grocery, pharmacy, laundry, or a gas station. Their products get delivered there and they can then pick them up at their convenience.” Fodel is the region’s first last-mile delivery service based on the pick-up and drop-off (PUDO) model, the CEO says. Its network currently consists of more than 2,000 merchants across Saudi Arabia, the UAE, Bahrain, Kuwait and Oman. “Our solution is unique in the GCC region but it’s a proven and well-established business model with many successes

ILLUSTRATION: GETTY IMAGES/TARRAS79

same customers often chasing bargains, and firms continuing to offer free delivery on low-ticket items, this also bumps up fulfillment costs. Taking both scenarios into account, businesses can easily slash their own profits by up to 5 to 10 per cent or even go into the red,” the report reads. DeVere Forster, COO, Dubai CommerCity also identified other challenges that new e-commerce businesses must watch out for: “How to differentiate oneself given the saturation of e-commerce; how to localise brands to deal with consumers on a local/regional level as opposed to being a ‘one size fits all’ brand; and how to identify and promote to the right target audience to ensure the right lead generation.”


BRAND VIEW

Beyond digital transformation JMR Infotech’s innovation adds value to the digital transformation journey of banks and financial institutions in the Middle East and Africa region

T

he classical banking world is in a state of radical change. Interest rates are low and revenues are dwindling. Challenger and neo banks are dominating the customer interface. Traditional players design their digital opportunities primarily from their viewpoint, focusing on their banking products, and becoming financial superstores for customers. With open banking and open finance, financial institutions are now required to work more closely with nonbanking players, often outside the world of finance. Digitisation of key spheres of a customer’s lifestyle provides a plethora of opportunities for both banks and non-banks to create value services across shopping, housing, recreation, and healthcare. A winning strategy will be to surround endcustomers with convenient digital services with easy access and the right pricing. Customer expectations are quickly adjusting to a digital world where products and services are recommended based on past behaviours and preferences, and where location-based offers are provided instantaneously on their mobile devices. Banks have powerful inherent advantages – they have their customers’ trust

A winning strategy will be to surround end-customers with convenient digital services with easy access and the right pricing along with the data on their financials and spending patterns. Additionally, they have the brand recognition to attract partners to shape digital ecosystems. These ecosystems enable banks to embed themselves into their customers’ lives and influence behaviour patterns – enabling them to buy their new home, next car, or shop for home appliances via their mobile. China’s ICBC has launched a B2C mall in Argentina to provide a wide range of lifestyle services and white goods. Russian bank Sberbank has also attempted to surround customers with services with their ecosystem including groceries, entertainment, health, auto, travel, and even logistics.

In the MENA region, an Egyptian fintech named valU, backed by EFG Hermes, has shaped a new digital marketplace with embedded lending. ValU, supported by its platform partner JMR Infotech, has gained significant traction via its ecosystem approach and ability to link everyday lifestyle needs alongside lending. ValU has won three fintech awards and is growing much faster than the market. ValU is powered by JMR’s Genie De Banca (GDB) – an agile digital platform that enables banks to function as a value aggregator, enabling fulfillment of customer’s life-needs. It enables banks to explore the digital economy and ensure that they meet requirements in a customer’s daily life, delivering all products and services through E2E digital channels. Apart from banks, GDB can also be seamlessly adopted across diverse businesses like real estate, automobile, consumer goods, education, and travel and tours, among other business verticals. JMR Infotech has recently signed a strategic joint venture agreement with the Seed Group (UAE), a company of The Private Office of Sheikh Saeed bin Ahmed Al Maktoum, to enable value-based, technology solution offerings for banks and financial institutions in the MEA region. Jayafar Moidu, founder and CEO of JMR Infotech says, “The key focus of the joint venture will be to create opportunities for banks and financial institutions to shape digital ecosystems for customer digital engagement and fulfillment journeys. These ecosystems will be future ‘game-changers’ with re-imagined customer journeys through automated processes, combining digital e-commerce with embedded finance including payments and lending.”


ILLUSTRATION: GETTY IMAGES/VECTOR FUN

SPECIAL REPORT

around the world, including Kiala in the UK with more than 7,000 locations, or Cainiao in China with over 40,000 locations. In many countries, the majority of deliveries happen via the PUDO model. In the Nordics for example, more than 70 per cent of all deliveries happen via pick up and drop off locations,” notes Benturquia. Delivering en masse to one location ticks several boxes – parcels are delivered to a single place already frequented by customers, while the host partner receives increased footfall which would lead to potentially incremental revenue. It also grants service providers and e-commerce companies the bandwidth to handle increased orders during peak times without compromising customer service. “Fodel’s scalable solution helps improve logistics bandwidth at all times, and especially during peak seasons such as Ramadan and other festive seasons when logistics partners get overwhelmed with demand. In that regard, our solution can multiply the capacity of an e-commerce or a logistics partner. On top of solving this problem, the supply chain also benefits from the significant reduction in return to origin (RTO) deliveries, an issue for shippers and e-tailers which is especially poignant in the GCC markets where last-mile delivery failure rates are high,” adds Benturquia.

Best mix Since several factors such as convenience and sustainability come into play, different delivery models may work best according to the layout and requirement of each market. On-demand services may propel home delivery and delay the adoption of peripheral business models in some locations, while in others, providers may be compelled to widely offer pick-up services and collection points. Alternatively, a combination of delivery solutions may work in concert, drawing on their individual strengths to best serve the diversified needs of consumers. Given the GCC’s e-commerce ecosystem, which solutions are best suited to this region? “Home delivery services will continue to stay due to the increase in demand of online grocery and food products,” Frost & Sullivan’s Sivan T J says, adding, “With advances in technologies such as delivery bots and drones, cost of home delivery services is expected to decline significantly. Further, as the digital infrastructure improves, localised delivery networks will play an important role in the last-mile delivery chain. This will favour the adoption of delivery solutions supported by digital locker boxes and micro-distribution centres. In summary, a combination of home delivery solutions and collection points are more suitable for the GCC region.”

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ILLUSTRATION: GETTY IMAGES/DARIA VOSKOBOEVA


SPECIAL REPORT

Sustainable e-commerce: Green delivery BY ZAINAB MANSOOR

W

hile the Covid-19 pandemic may have propelled the growth of the e-commerce sector, a shift in shopper preferences and the convenience the segment offers indicate that it will continue to boom even after the outbreak

recedes in the future. The surge in e-commerce has also transformed the concept of urban delivery, last-mile, and associated technologies. Demand for last-mile delivery is increasing and is expected to grow by 78 per cent globally by 2030, according to a World Economic Forum (WEF) report. However, this trend in its current format – and with expected forecasts – appears unsustainable as the growing consumer base and purchasing power will have adverse environmental

implications on a broader scale. Rising demand for online shopping and time-definite deliveries is expected to weigh heavily on sustainability as urban density, air pollution and traffic congestion scale. “To satisfy customers’ ever-rising desire to buy products online, without any intervention, the number of delivery vehicles in the top 100 cities globally will increase by 36 per cent until 2030. Consequently, emissions from delivery traffic will increase by 32 per cent and congestion will rise by over 21 per cent,” the WEF report reads. “Rapid urbanisation, increased number of online customers, product availability, rise in demand for faster delivery of parcels are some of the factors contributing to the growth of last-mile delivery services. High cost associated with failed delivery due to lack of address systems and non-availability of customers, poor route planning and the use of inefficient transport vehicles adding to the carbon footprint of package delivery, vehicle noise pollution and urban congestion, are the factors relevant to the development of sustainable last-mile strategy,” says Sivan T J, senior consultant, Supply Chain and Logistics Practice, Frost & Sullivan. “Strategies adopted by service providers are expected to focus on cutting down emissions generated by last-mile transportation. Some of the strategies include optimising route navigation and scheduling with real-time information about traffic congestion and increasing the use of alternate fuels and autonomous vehicles to combat challenges associated with sustainability issues.” Taarek Hinedi, vice president of FedEx Express Middle East and Africa operations, adds: “The key to a more efficient and sustainable approach in logistics is reducing the transportation requirements, and as a result we’re seeing more companies create more efficient supply chains. Consolidating packages within circular routes instead of point-to-point trips means greater delivery efficiency and a more sustainable logistical model.” An integrated approach could come into play to optimise the last-mile ecosystem and minimise the impact on customer service. Three transition roadmaps – the WEF report suggests – include electric vehicle (EV) regulation for inner-city areas, deliveries during night-time and before/after working hours, data-based connectivity solutions such as dynamic re-routing and load-pooling, and multi-brand parcel lockers and boxes. “Such a scenario could reduce CO2 emissions by 30 per cent, congestion by 30 per cent and delivery costs by 25 per cent by 2030 when compared to a ‘do nothing’ baseline,” the report adds. Innovative solutions are also being introduced to address the issue. Roxo, FedEx’s SameDay Bot – an autonomous delivery device designed to travel on sidewalks and along roadsides, safely delivering smaller shipments to customers’ homes and businesses – made its first international appearance outside the United States in Dubai in October 2019. “The innovation was welcomed by the Roads and Transport Authority (RTA) and customers alike. This innovation fits well

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ILLUSTRATION: GETTY IMAGES/MALTE MUELLER

SPECIAL REPORT

with the UAE National AI strategy 2031 and Dubai Autonomous Transportation strategy, which support the adoption of robotics and artificial intelligence technologies,” says Hinedi. In addition to greater traffic congestion and increased greenhouse gases, the shift to online shopping has also led to an exorbitant usage of packaging materials. Most of the waste ends up in landfills or in the environment. Bearing sustainability concerns in mind, local online businesses are working towards rolling out measures to mitigate the impact of packaging waste and move forward responsibly. “We are currently implementing more sustainable packaging and packing guidelines and look forward to rolling out our learnings across the entire noon group,” opines Maya El Ayach, SVP, Growth and Digital Strategy, noon. Meanwhile, UAE-based luxury e-commerce platform Ounass also launched eco-friendly boxes made from recycled materials as its default packaging in 2019.

Greener solutions In the wake of rising consumer awareness and calls for environmental change, companies can make a compelling case for sustainable practices by integrating business engagement with eco-friendly policies. Additionally, tapping into the sensitivities of ‘conscious consumers’ will go hand-in-glove in cultivating sustainability within supply chains, in-store and online marketplaces. In 2020, e-commerce giant Amazon launched its ‘Climate

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Pledge Friendly’ programme to help customers discover and purchase sustainable products. Consumers can browse for products that have one or more of the sustainability certifications. The company is also working towards powering its operations with 100 per cent renewable energy by 2025. Meanwhile, FedEx Express’ Hinedi asserts that in the 20192020 fiscal year, the company avoided more than three million metric tonnes of CO2 equivalent emissions globally as a result of enterprise-wide fuel and energy saving initiatives. That is equivalent to the carbon offset of more than four million acres of US forests in one year. “Sustainability has always been a key focus of our operations. Our innovative solutions include the use of robotics – including autonomous robots inside select warehouse facilities – to optimise package sortation and pickup, packaging innovations to minimise materials and waste, and other advancements to reduce emissions, traffic congestion, and noise during last-mile delivery,” she adds. “We recognise that the long-term health of our business is directly connected to the health of our planet and local communities, and that’s why we’re committed to ‘reduce, replace, revolutionise’, which we apply across key areas like aircraft efficiency, vehicle efficiency, sustainable facilities, and sustainable materials and recycling.” With sustainability taking priority across this region, players who are keen to succeed in the longer-term must integrate a greener approach in their operations. The customers of tomorrow will care.


ILLUSTRATION: GETTY IMAGES/JORG GREUEL


SPECIAL REPORT

Growing basket

With modest beginnings, the GCC e-commerce market has come a long way, with sector revenues growing more than four-fold since 2015 Saudi Arabia

$50bn

UAE Qatar Kuwait

IN US DOLLARS

1.9bn

17.7bn 1.9bn 1.8bn

GCC’s e-commerce expected market value by 2025

Bahrain and Oman

21.6bn

14.4bn

1.6bn

1.6bn 6.7bn

11.2bn

1.4bn 5.7bn

1.4bn

8.4bn

1bn

4.4bn

1.2bn

5.3bn

3.6bn

0.8bn

0.8bn

2.8bn

0.5bn

9.8bn 7.5bn 6.2bn

1.9bn 4.5bn 3.1bn 1.8bn 2015

2016

Young and digitally savvy ILLUSTRATION: GETTY IMAGES/TETIANA LAZUNOVA

Across the GCC, millennials are a vital part of the market SHARE OF THE BASE 45% Millennials

2017

2018

The pandemic effect Several key segments will see increased growth due to Covid-19 by 2025 IN US DOLLARS

Covid adjusted

Electronics, appliances and media 8.6

2.9

60% Online

Average yearly spending (clothing, electronics and travel)

Timely services Consumers in the Gulf expect faster response times

11.5bn

2.3

10.6bn

Toys, hobby and DIY 7.4

1.5

8.9bn

57% 1 hour or the same day

Digital services (food delivery, events, fitness and services) 6.4

$1,500

2020E

Fashion and beauty 8.4

WHERE DO THEY SHOP?

2019

2.2

8.6bn

Food (e-grocery included) and personal care 3.5

2.7

Digital music and video games 2

6.1bn

10% 2%

Next day 2 days

31% 2+ days

0.6 2.6bn

SOURCE: KEARNEY’S GCC E-COMMERCE UNLEASHED: A PATH TO RETAIL REVIVAL OR A FLEETING MIRAGE?

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SPECIAL REPORT

“YOU SHOULD LEARN FROM YOUR COMPETITOR, BUT NEVER COPY. COPY AND YOU DIE”

JAC K M A , CO-FOUNDER OF ALIBABA


FEB

Lifestyle

21

The road ahead

NEOM inked a long-term partnership with the Mercedes-Benz EQ Formula E team, which will help the Saudi Arabian development meet some of its most ambitious targets p.60

“We want to be the healthiest place on earth where 75 per cent of the population does 180 minutes of exercise every week” - Neal Coupland, sports partnership director at NEOM

gulfbusiness.com

Hermès The new Fall 2021 Menswear collection, courtesy Véronique Nichanian, has us longing for an extended winter February 2021

59


Lifestyle / Sport

On a grand scale Sports has a definitive role to play within Saudi Arabia’s futuristic development, NEOM. A recent partnership with Mercedes-Benz puts that into sharp focus, as does NEOM’s determination to house a population which is among the healthiest in the world BY VARUN GODINHO

N

EOM, the $500bn 10,000 square-mile mega development in northwest Saudi Arabia, is a project with unlimited ambition. It was first announced by Crown Prince Mohammed bin Salman in 2017, who has since then made it abundantly clear that it will serve as more than just a newfangled city with offices, homes, resorts and conventional infrastructure including an airport. Instead, it is being built as an incubator for cutting-edge technology, with sustainability as a founding principle. It is also a staging ground for radical renewable energy initiatives which reimagines mobility through hyperloop-esque travel solutions. Among the 14 core ideological concepts around which NEOM is being envisioned, sports is one of them. Playing a pivotal role in pushing that agenda is Neal Coupland, sports partnership director at NEOM. “I think it’s important to put into context what we’re trying to achieve,” Coupland explains about his role within the project. “We’re trying to help define the destination through sport. Inevitably therefore, the partnerships we have need to contribute to the whole of NEOM, and not just to NEOM sports.” One of the key partnerships it struck was in March last year when it signed a longterm sponsorship agreement to become the principal partner of the Mercedes-Benz EQ Formula E team. “We look at Mercedes as a very successful brand globally in car and vehicle manufacturing and mobility. Mercedes racing is the most successful racing team on the planet. We look at knowledge transfer and at sharing skills. When we look at the partnership of Mercedes Formula E, we want to contribute to the whole of NEOM, which is about our future livability, mobility, innovation and technology. Mercedes

60

February 2021

ticks all the boxes,” says Coupland. He acknowledges that the timing of the partnership was unfortunate as it came when the Covid-19 pandemic began to sweep across the world and resulted in lockdowns around the globe. But it hasn’t been an entirely futile past few months as there were a few ePrix races held in the second half of last year and NEOM also collaborated with the carmaker on its Mercedes-Benz EQ FE Driver Development programme. “In the last six to eight months we have worked on a graduate development [programme] to develop young talent in the kingdom and start to get them into the Mer-

cedes environment, so that they can then come back as managers and project leaders, engineers, software development marketers, through Mercedes.” That Mercedes won the Berlin ePrix race at the close of last year’s truncated season meant that they finished third in the team’s championship, ahead of rivals at BMW, Audi and Porsche. It gives Mercedes – and its partner NEOM – rightfully earned optimism as they launch into the doubleheader Diriyah ePrix in Saudi Arabia this month with ex-Formula One driver Stoffel Vandoorne and Dutch driver Nyck de Vries taking the wheel of their machines that can accelerate from 0-100kph in 2.8 seconds and reach top speeds of 280kph.

F

or now, NEOM is an investor-based proposition, but with construction on an initial few projects already underway – including a NEOM Bay airport – it is destined to turn into an income-generating source for the kingdom. Likewise, the sports components at NEOM also remain an investor-backed initiative, with Coupland’s team investing in branding to get the visibility of NEOM high on global sporting events. Eventually, NEOM could become a destination to attract sports. “When you look at skydiving and other adventure sports, we have the most amazing backdrop to be a global leader in adventure sport – beaches, mountains, deep seas, the wind for wakeboarding and surfing.” A teaser video on NEOM’s website doesn’t reveal exact plans for sporting infrastructure within NEOM, but does include visuals of football stadiums, cricket pitches, athletic tracks, and even a virtual reality-aided boxing training session. In 2019, NEOM played host to its inaugural Beach Soccer Cup in which Oman won against Egypt in the finals. This year too the Beach Soccer Cup will return, and earlier last month the Dakar Rally 2021 also tore through the area’s rugged landscape. But as Coupland points out, while the economic benefits of hosting sporting events could be massive, NEOM is more focused at the moment on promoting a lifestyle rather than a specific sport. A recent study by The Royal Society of Tropical Medicine and Hygiene noted that among 26,000 families surveyed in Saudi Arabia, 71.7 per cent of all Saudi males do not practice a physical activity, whereas that figure stands at a staggering 91.1 per cent for Saudi women. “In terms of lifestyle, we want to be the healthiest place on earth where 75 per cent of the population does gulfbusiness.com


Lifestyle / Sport

Aiming to provide an adrenaline rush, NEOM promises to roll out an extreme sports calendar and also tap into esports which has grown exponentially within the kingdom 180 minutes of exercise every week. We can then make a big economic contribution by keeping people fit and in the workplace, and not in the healthcare system, which costs hundreds of millions of dollars.” Aiming to provide an adrenaline rush, NEOM promises to roll out an extreme sports calendar and also tap into esports, which has grown exponentially within the kingdom and globally over the past 12 months. NEOM’s sporting partnerships haven’t been without hiccups – Riot rescinded its decision for NEOM to become a major sponsor of the League of Legends European Championship last July, a day after it was announced. Beyond NEOM, Saudi Arabia is becoming a major reckoning force in sports. The kingdom will host its first Formula 1 race in November in Jeddah, and the high-profile Saudi International golf tournament returns to the kingdom in February, part of the European Tour, which will see world number one Dustin Johnson tee off against gulfbusiness.com

the likes of Bryson DeChambeau, Tommy Fleetwood and Sergio Garcia. Saudi Arabia does have the potential to reach the level of its neighbours such as the UAE, which regularly hosts mega sporting events across cricket, tennis, racing, mixed martial arts and golf. Qatar, which resumed diplomatic relations with its GCC neighbours, will be hosting the FIFA World Cup next year. NEOM is watching and scoping for events that could make its way into the development. “It’s going to be really important to try not to be too competitive against each other in terms of getting events,” says Coupland. “That’s going to happen to some degree, but in NEOM we’re going to have our own USP which is about the healthiest lifestyle on the planet.” Above: Mercedes driver Stoffel Vandoorne Opposite page: NEOM is the principal partner of the Mercedes-Benz team

The Saudi Crown Prince recently announced a 170-kilometre long car-free, zero-carbon city within NEOM called The Line, which is being prepped to house a million residents and generate 380,000 jobs by 2030. While construction will begin this quarter, the $100bn-$200bn being allocated for infrastructure includes a walkable belt of hyper-connected communities where no journey between two destinations along The Line is longer than 20 minutes. “We look forward to the opportunities that The Line brings in terms of how people access sport. It’s about access and opportunity. One of the biggest barriers to people being active and healthy is the time it takes to get to the right facilities to take part in those exercises. “If we can solve those issues through The Line, which of course we hope we can, then that’s going to be a massive factor in hitting our target of getting 75 per cent of the population active for three hours a week.” February 2021

61


Lifestyle / Auto

The EQC – the Mercedes-Benz of electric cars We got behind the wheel of the Mercedes-Benz EQC, the automaker’s first EV BY DAVID NDICHU

Y

ou could call the EQC Mercedes-Benz’s transition car as the illustrious brand shifts to an all-electric future. That is because the EQC is largely the electric version of the existing GLC SUV. Upcoming models on the other hand will be built as electric vehicles from the ground up, a Mercedes-Benz representative told me. That should mean lighter, roomier and longer-range vehicles. The EQC is Mercedes-Benz’s first model under the new label EQ, embodying the design idiom of what the company calls ‘progressive luxury’. Over the next 24 months, the company plans to launch the EQE, EQA, EQB and the all-electric variant of the flagship S-Class, the EQS.

Design The EQC silhouette resembles its spirit animal the GLC, albeit with more curves and a sportier facade. The unit I tested had a matte grey finish. At the front is a large black-panel surface enclosing the headlamps and grille. At the top of the black panel is an optical fibre that creates an almost uninterrupted horizontal light band at night. Inside, the EQC is undeniably, luxuriously, Mercedes-Benz. The only difference is that the interiors are built with sustainability in mind. The automaker says that it has 99 components within the car which are manufactured 100 per cent sustainably. The seat cover “Sunnyvale” developed for the new EQC is made of recycled plastic and renewable raw materials such as

Market forces The era of the electric vehicle is truly here, led by customer demand, widespread environmental concerns and various governments that are now pushing forward an electric-first agenda within the auto sector. In China, the government wants ‘newenergy vehicles’ to make up at least 15 per cent of the market by 2025, and twice that figure a decade later. By 2035, the UK says it will ban the sales of ICE cars. Ahead of everyone is Norway, where full EVs comprise around 60 per cent of sales each month and will permit the sale of only full-electric cars by 2025. A study by Allied Market Research states that the electric segment will grow at a compound annual growth rate of 9.7 per cent from 2019 through to 2026, clearly demonstrating that the market is ripe for EVs. 62

February 2021

The era of the electric vehicle is truly here, led by customer demand, widespread environmental concerns and governments pushing forward an electric-first agenda

hemp, kenaf, wool, cotton, wood and natural rubber. Two 10.25-inch screens upfront serve as the instrument cluster and the infotainment system running along halfway across the dashboard. The screens will display the range, charge status and energy flow. The car also includes a heads-up display which once you get used to it, is a marvel. You can control the MBUX interface through gestures – and the system is configured to determine the difference in hand gestures being made by the driver and the front passenger. Voice control is my go-to mode of interaction. Saying “Hey Mercedes navigate to Bluewaters” sets you on your way to some of the most Instagrammable backdrops in the city, or so I’m told. I found the system very responsive – even my heavy accent was little bother to the well-refined system. It is also compatible with Arabic. The 3D mapping system is superb – better than what your smartphone mapping app can deliver. The car diverges from the minimalist interior ethos advanced by Tesla and followed by other EV manufacturers. The sleek digital screens exist side-by-side with a plethora of physical buttons, both on the cluster and the steering wheel. Extra touches include a ribbed edge of the instrument panel, which resembles the cooling ribs of a hi-fi amplifier. A high-gloss cassette housing flat air vents with keyshaped, rosé-gold-coloured louvres round up the high-end mien. One thing that strikes you is just how quiet the car is. Mercedes-Benz engineers have further reduced the noise levels of the typical EV with several measures. In the EQC, the power packs are isolated by rubber mounts to reduce vibrations, supplemented with insulation measures.

Charging Electric car models will live and die on the strength of their batteries and range anxiety is a real source of mental distress for EV owners. The only relief from this unease is either more powerful batteries or more charging options. The new EQC charges up to 80 per cent in just 40 minutes and has a range of around 320km. Mercedes says it will ship a “Wallbox” which it says is up to three times faster than a domestic power socket for charging at home, or you can opt for the much faster public charging points. gulfbusiness.com


Thanks to EQ-optimised navigation, Mercedes-Benz owners can easily find charging stations on their route, and ‘Mercedes me Charge’ gives them convenient access to the charging stations of numerous providers, also beyond national borders in certain markets. In this case, customers benefit from an integrated payment function with simpler accounting. There are two electric motors connected to the lithium-ion battery which create 408hp of power and sends it to all four wheels. At full throttle, the SUV can leap from 0-60mph in around 4.8 seconds. The high-voltage battery is mounted beneath the vehicle floor. The energy storage unit is surrounded by a stable frame that can absorb energy for safety purposes. Under the hood, Mercedes has kept the ICE engine “block” look although mostly for appearance sake. This will be removed in upcoming models to create more trunk space.

Autonomy

The lithium-ion battery has an energy content of 80kWh. The EQC comes with five driving programmes, each with different characteristics: comfort, eco, max, range, sport and an individually adaptable option. The average driver on eco-mode should be able to get roughly 450km between charges. The eco assist function helps keep the charge by prompting drivers to lift their foot off the pedal to conserve energy, and the haptic accelerator prevents them from unduly revving or flooring it which drains the juice quicker. gulfbusiness.com

The new EQC charges up to 80 per cent in just 40 minutes and has a range of around 320km

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Of the components within the car are manufactured 100 per cent sustainably

Like all other major manufacturers, Mercedes is advancing its autonomous driving capabilities. The EQC is at level 2 of the fivestage path to full autonomy. Various driver assists come into play to protect the car’s occupants including active lane-keeping (which vibrates the steering wheel to warn drivers that they are veering off their lane) and blind-spot assist. It even has cameras to scan for speed signs and adjust the speed of the car automatically. Beeps warn you when you are tailgating or driving too fast. The EQC is a statement by Mercedes-Benz as it eyes an all-electric future, although brands such as Tesla have had an early start. However, the combination of legendary luxury, brand recognition and engineering prowess should put the German brand on the EV fast lane. February 2021

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Lifestyle / Art

Celebrating art The ninth edition of the Ras Al Khaimah Fine Arts Festival returns this month and will play a pivotal role in reviving the country’s impacted arts and culture sector BY VARUN GODINHO

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ith the biting economic fallout of the Covid-19 pandemic, the arts – expectedly – took a body blow and was consigned low down on the priority list of sectors that needed to be revived. Nonetheless, it is clawing its way back. The Emirates Airline Festival of Literature in Dubai returned in January, as will the region’s largest affordable art fair World Art Dubai in April. Another annual event that has been a long-time mainstay on the UAE’s art calendar, the Ras Al Khaimah Fine Arts Festival (RAKFAF), will also stage a comeback for its ninth edition this year, following an interrupted showing in 2020. “Like the rest

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of the UAE and the world, the arts in Ras Al Khaimah has been seriously impacted by the pandemic. We cancelled the last two weeks of programming for the 2020 festival and subsequently moved all our year-round events online. We also postponed our Artist-in-Residence programme,” explains the festival’s director Suqrat bin Bisher. Bisher, who is also the Art and Culture manager at the Sheikh Saud bin Saqr Al Clockwise from top left: Harvest, Nuwair Al Hejari (UAE); Stand Up Together, Om Kalthoom Al Alawi (Saudi Arabia); Smile From Tondo, Buddy Gadiano (Philipines); and Dialogue, Luis Barata (Portugal)

Qasimi Foundation for Policy Research, says that the theme of this year’s festival – Hope – was chosen to reflect that mood around the reopening of the arts. Held from February 5-April 3 at its traditional venue at the abandoned 1960s pearling village of Al Jazirah Al Hamra where homes are built of seashells, stone and coral pieces, the festival’s organisers have decided to also add two outdoor venues – one each at Jebel Jais and Open Park on Al Marjan Island – which will serve as satellite exhibition spaces for the festival. In another first, RAKFAF is partnering with The Arts Center at NYU Abu Dhabi and Art Dubai. “Hala Khayat, regional director for Art Dubai, will be presenting a talk on the region’s art festival circuit. This event will help local artists build an awareness of the sector, enabling them to navigate the available opportunities. The Arts Center at NYU Abu Dhabi will be presenting a virtual workshop from Dr Ghazi Al Mulaifi, Learning Rhythms of the Arabian Sea,” says Bisher. Khayat’s session will be held on February 19, whereas Al Mulaifi’s workshop will be conducted on February 14. “The Rhythms of the Arabian Sea workshop is built around gulfbusiness.com


Lifestyle / Art

the residency with Kuwaiti-American artist, ethnomusicologist, and NYUAD music faculty Dr Ghazi Al Mulaifi and members of his band Boom.Diwan. These online events provide a platform and an opportunity to further expand our mission beyond the NYU Abu Dhabi campus by bringing communities from Ras al Khaimah and other emirates together to serve as a resource for fostering the growth of an arts ecosystem through the UAE,” says Linsey Bostwick, director of Artistic Planning at The Arts Center at NYUAD. The wide-ranging festival includes photography, art, sculptures, film, food and heritage tours, as well as workshops, among other activities. Prominent Emirati artists participating include Faisal Al Rais, Nuwair Al Hejari, Azza Al Nuaimi and Yousef Al Zaabi whose photographs were featured in a recent issue of National Geographic Arabia. Another long-time National Geographic photographer, Brooklyn-based Robert Clark, will be this year’s US honorary guest artist at the festival and will be conducting a falcon photography workshop on Jebel Jais. “Other notable international names [attending] include Dubai-based Filipino photographer Buddy Gadiano, Portuguese sculptor Luis Barata, and past winner and Al Qasimi Foundation resident artist Leonardo Montoya,” adds Bisher. Artists from across the region including Lebanon, Egypt, Jordan, Palestine, Morocco, Algeria, Turkey and Iran are expected to participate. With the Abraham Accords signed, RAKFAF will also see Israeli participation. “We are excited to welcome Israeli curator Sharon Toval who will be showcasing four video art installations at the festival,” confirms Bisher, while adding that Qatari artists can also submit their work to be showcased at the festival. “Due to how recent the normalisation with Qatar has been, we will not see any participation this year.” A major component of the festival will be film. “This year we’re hosting both indoor, in collaboration with Vox Cinemas, and outdoor film screenings showcasing short documentary and narrative films from young filmmakers. It is a chance to see the creative spirit of independent filmmakers from the region and beyond. [With] our unique focus of blending contemporary arts and cultural heritage, we have created five short films with former residents of the [Al Jazirah] village,” says Bisher. gulfbusiness.com

The star of Ras Al Khaimah has only been rising over the last few months as it aims to position itself as a major tourist magnet Each year, the Al Qasimi Foundation Film Grant provides Dhs25,000 in funding to create short films on topics which are relevant to the UAE. The short experimental documentary of the 2020 recipients of this grant – Ukrainian-born artist Anna Kipervaser and Syrian Majid Alloush – will be screened at the festival. Titled Synopsis: Terrain Ahead, it explores the impact and transformation of the UAE coastline over the last 100 years as a result of human activity.

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indful of the Covid-19 conditions, RAKFAF will also be launching digital initiatives including virtual tours of the festival. “The virtual tour is a project we started last year when we had to close the festival early. This year, we wanted to make it a fundamental part of the festival, and release it alongside our opening night,” says Bisher, adding that the virtual component will also broadcast the festival to an

international audience. A separate fynd.art web app developed for the event will enable the sharing of information about the artworks and the artists by simply scanning the artwork with their phone. People can also save the artwork information on their phone and contact the artist directly too. The star of Ras Al Khaimah has only been rising over the last few months as it aims to position itself as a major tourist magnet. The emirate was named the Gulf Tourism Capital 2021 at the fifth meeting of tourism ministers of GCC member countries last November. According to the Ras Al Khaimah Tourism and Development Authority, during the Eid Al Adha break last year, the emirate saw a 12.9 per cent growth in the average daily rate (ADR), the highest increase in the last three years under non-pandemic travel conditions. Airlines operating out of its international airport, including Air Arabia and SpiceJet, have recently increased the number of destinations they fly to from the emirate. Also, Bahrain’s Gulf Air has said that it too plans to begin flights to Ras Al Khaimah – all of which will help the emirate achieve its target of attracting 2.9 million visitors annually by 2025. Arts and culture festivals like this one can only help its cause. But for Bisher, it’s not about drawing numbers alone to the festival. “The success of the festival is not just about numbers. If our artists can use this festival as a launching pad for wider domestic and international success, if we are able to bring the UAE arts community together and reach new audiences and new collaborators with a view towards our 10th anniversary, then we will know that this year’s festival has been a success. “People need art, they need hope.”

Suqrat bin Bisher, RAKFAF director

The festival venue is the abandoned 1960s pearling village of Al Jazirah Al Hamra

February 2021

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Lifestyle / Tech

Game on

Riot Games’ Intel Arabian Cup adds new shine to the regional gaming scene BY DAVID NDICHU

Sponsorship

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he Intel Arabian Cup (IAC) held in December 2020 was another shot in the arm for the regional esports sector. Based on the League of Legends title and organised by publisher Riot Games in partnership with Intel and Lenovo, the tournament saw Anubis Gaming from Egypt beat eight other teams from the region in the finale. eGz Esports from Saudi Arabia finished second while Fox Gaming, who represented Morocco, secured third place. More than 1,000 teams and 5,000 players from MENA took part in three different stages over eight months. IAC provided an opportunity for amateur and professional gamers to test themselves in a competitive environment, to recognise and nurture local talent as well as further developing the gaming landscape in the region, explains Ali Muslumanoglu, general manager for Riot Games MENAI region. Riot Games is the publisher of the wildly popular League of Legends franchise, which is today the most-played PC game in the world and a key driver of the explosive growth of esports. The game has evolved since the initial launch in 2009, adding new spinoffs such as Teamfight Tactics, Legends of Runeterra, VALORANT and League of Legends: Wild Rift. Unlike other games, League of Legends doesn’t necessarily require a high-end PC or advanced graphics to play, which has helped widen the addressable audience.

Cup was an extension on the Twitch platform embedded within the League of Legends profile. This allowed fans to be rewarded for watching. “This interactive tool helped significantly increase our viewing audience and we even had people from Brazil logging in and following the tournament,” Muslumanoglu says.

Ali Muslumanoglu, general manager for Riot Games MENAI region

Sponsorship money is flowing into esports in the region, attracting more pros and teams. The total prize fund for the Intel Arabian Cup was $180,000. A year earlier, the Nexus Festival (a League of Legends tournament) in Riyadh had a prize fund of $2m split across six categories. “We are keen to create tournaments that are sustainable and can be expanded in the coming years. More importantly, we want to develop the ecosystem and players for long term objectives,” says Muslumanoglu. Global tech brands in particular are eager to associate themselves with an industry whose only way is up. Riot Games partnered with Intel and Lenovo for the Intel Arabian Cup. “These partnerships are extremely important because the gaming industry revolves around a broad ecosystem. Within this mix are the players, the publishers, technology providers such as Intel and Lenovo, the broadcast teams and many other pillars that are key in the gaming industry. “We believe that bringing all of these experts together to create an experience for the players is always the right approach,” says Muslumanoglu. Intel technology powers many of the gaming platforms while Lenovo is a regular supporter of the industry by providing gaming laptops and PCs. “Given their expertise and what they can bring, it made sense that Riot Games partners with Intel and Lenovo, who share the same core principle of putting the players’ experience first and creating a memorable environment for gamers,” he adds.

Streaming

viewers with more than 80,000 unique viewers tuning in for the final, the organisers said. While there was a gradual increase of viewers when the tournament began, Riot Games wanted to boost the numbers by introducing a streaming ladder, says Muslumanoglu. The result was some of the best numbers for esports live streaming in the region. “We realise that [the regional] streaming audience is still relatively small compared to the other regions around the world. However, given our games’ popularity and the constantly growing community, it made it easier to promote the streaming ladder and attract more people to the action,” he adds. The streaming mode for the Intel Arabian

Traditional sports would not have grown without TV. Similarly, streaming is one of the biggest drivers for esports. According to research firm Kenneth Research, global live game streaming will grow at a CAGR of over 19 per cent between 2019 and 2025. More than 22,000 viewers across MENA tuned in for the live broadcast of the IAC on streaming platform Twitch, Facebook and YouTube. The grand final attracted 22,000

While there was a gradual increase of viewers when the tournament began, Riot Games wanted to boost the numbers by introducing a streaming ladder

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Covid-19 Muslumanoglu acknowledges the challenges of sorting out a schedule for an eight-month tournament in the middle of a pandemic. The initial plan was to stage the tournament offline and host an elaborate grand finals event at a physical venue where the players could compete in front of a live audience. However, the pandemic made it impossible to plan, admits Muslumanoglu. “This meant we had to revisit our plans every month before making the final decision to host the entire tournament online. It wasn’t an easy decision as we wanted to bring the gaming community together in person. Ultimately, this proved to be the right decision as it allowed players to participate safely while also adhering to government guidelines and protocols.” Interest and participation in the Intel Arabian Cup validate available research on the upward trajectory of esports in the region. According to industry data, the global gaming industry is now worth a whopping $129bn a year. That is bigger in terms of revenue than annual worldwide box office, part. From previous experiences, we know annual music streaming and album sales, there is a big pool of gamers that are playand major sports leagues all put together. ing League of Legends and at the same time There are close to 2.5 billion gamers there is a growing appetite for tournaments worldwide. to be staged in the MENA region,” says The Middle East boasts the world’s fastMuslumanoglu. est-growing gaming market, with a 25 per Tournaments such as IAC will only accelcent annual revenue growth. The GCC erate talent development in the region. gaming market has followed this rapid “We are fully aware the region is up and expansion and is expected to hit $821m by coming when it comes to esports and talent, 2021 from $693m in 2017, as some of the world’s best according to research firm talents are based here and Strategy&. this is why we see a bright “When we began mapping future ahead. We’re also The global gaming out the Intel Arabian Cup, more than happy to provide industry worth, we were never really conmore opportunities like the according to cerned about the number Intel Arabian Cup so teams industry data of teams or players taking and players can shine on

$129bn

gulfbusiness.com

Ready player millions

The GCC gaming market is expanding rapidly, according to research firm Strategy& $821m $693m

2017

2021

a competitive level and be recognised for their talent,” Muslumanoglu says. “Overall, we are pleasantly surprised with the talent level of this region with players that can perform extremely well on an international level if given the chance. This applies to not only the League of Legends but across multiple games including our new game Valorant,” he adds. However, there are still a lot of things that need to be done to help players and teams fulfil their ambitions, Muslumanoglu reckons. “Launching more esports teams would be a good start as well as injecting more investments in players while hiring the right coaches and enhancing training for gamers to harness their skills and help their development,” he concludes. February 2021

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Lifestyle / Horology

Mission impossible The MB&F Horological Machine No. 9 Sapphire Vision throws open a stunning movement to full viewing pleasure BY VARUN GODINHO

H

orological machines. Can you really call it by any other name? Maximilian Büsser’s HM creations are intricate revelations of mechanical artistry where telling the time is the most cursory function of that wristbound device. Truth be told: we’re more likely to consult our smartphone or the clock on the top right-hand corner of our computer screen when all we want to do is know the time of day. And so, it is with that keen realisation, that the former Harry Winston managing director who set up his own company, MB&F, in 2005 continues to approach mechanical watchmaking. In 2018, he unveiled the Horological Machine No. 9, nicknamed the Flow. There are two completely independent balances, each of which keep time and whose energy is fed into a planetary differential (think of it as a central brain of the movement) that takes the time measurement from the two balances, averages it, consolidates it and feeds in into the vertical dial that displays the time. There are 301 components on the movement, including the twin turbines on the reverse that in MB&F’s own words “spin freely as an element of pure visual interest” (remember, telling the time is only an ancillary function on an MB&F). The HM9 has a movement that Büsser himself said is the “brand’s most beautiful movement to date” – a bold statement considering that there were 17 other contenders from the house of MB&F vying for that top honour. Allowing you to view most of those components within the HM9’s movement as they spin, click and twist in enigmatic 68

February 2021

The MB&F Horological Machine No. 9 Sapphire Vision

combinations, the brand unveiled this Horological Machine No. 9 Sapphire Vision last month, which uses a sapphire crystal for the case of the watch. Creating a sapphire case is a mammoth task in itself. It’s an expensive, laborious and incredibly complex feat – just ask Hublot or Richard Mille who have some experience in using these cases (the latter watchmaker will remind you of the 45 days it takes to create a single sapphire case for a watch, which is why it only makes five or six of these each year.) With the HM9 and the added complexity of its dramatic curves, swollen bubbles and swooping angles, a sapphire case seems like an impossible ask. But as the brand has repeatedly demonstrated with its horological machines that it began making in 2007, impossible is merely a good starting point for its design team, not a terminal one.  With sapphire, make the slightest mistake when machining or polishing it, and the material will, unlike metal, almost certainly fracture and crack – necessitating the

entire process of making it to begin from scratch. An agonising proposition when you consider that it takes 350 hours to machine a single case for an HM9 SV. There are three parts to the sapphire case in the HM9 SV, sealed with a patented gasket and “high-tech compound bonding process” which is why it is water resistant up to a depth of 30m. That you wouldn’t likely dare dunk a $440,000 timepiece into anything deeper than a sink is another matter altogether. A highly limited timepiece, there are four editions, each limited to only five pieces: two with a 18K red gold frame, combined with a either an NAC-coated black or a PVDcoated blue movement; and two editions with 18K white gold frames, which showcase a PVD-coated purple or a red gold-plated movement. Any of the combinations are winners, and collectively they offer plenty – enough to keep us thoroughly entertained until the HM11 – the HM10 Bulldog was released last year – makes its imminent appearance. gulfbusiness.com


Lifestyle / Horology

Moonwalking with Omega The new Omega Speedmaster Professional Moonwatch Master Chronometer, fitted with a Co-Axial Calibre 3861, is the successor of the first watch to make it to the moon and back BY VARUN GODINHO

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n the late fifties, Omega didn’t build the Speedmaster with space on its mind. Instead, with a far more terrestrial orientation, and as the name suggests, it was designed as a chronograph with a tachymeter that could easily measure land speed. It was marketed and positioned as the ultimate racing accessory tool (there were special editions with custom dials made for the Peruvian Automobile Club, coveted in today’s auction markets) that allowed shotgun-seated navigators in rally car events to calculate their speed without anything else other than that tiny device strapped to their wrists. In 1964 though, NASA sent out a tender asking for companies to submit watches that would become part of the official gear for manned space missions. Ten manufacturers responded, and only three – Omega, Rolex and Longines – made the final cut. The winning watch had to be accurate, precise to +/-2 seconds every 24 hours, antimagnetic and able to withstand temperature extremes. NASA engineer James Ragan set up a special torture chamber whereby these watches were tested in temperatures of up to 70 degrees celsius and then abruptly frozen to -18 degrees celsius, impacted with a force of 40g and also tested in conditions of 93 per cent humidity as well as the very corrosive 100 per cent oxygen environments. The tests were thorough, specific and brutal, with only one watch passing the grade – the Speedmaster. In July 1965, it was declared by NASA to be “Flight Qualified for all Manned Space Missions”. It went on to become the first watch on the moon when Buzz Aldrin wore his during

The new Omega Speedmaster Professional Moonwatch Master Chronometer

the historic Apollo 11 mission in 1969. The fact that a Speedmaster made it to all the remaining five lunar landings since then, says much about how robust a timing device it continued to be. Back in the sixties, it was backed by the excellent column-wheel chronograph Calibre 321. Insider tip: There are only 40,000 of these watches with the 321 across different product families, including the Seamaster, that were made. If you come across a Speedmaster 321, one in relatively good condition, via an auction, garage sale or an inheritance – seize it. It may not be rare, but it is definitely special. The Calibre 861 was made available alongside the 321 for a while, before the latter was phased out. Speedmasters over

The 3861 Moonwatch, a COSC-certified timepiece Master Chronometer, is built to higher standards than its predecessor gulfbusiness.com

the last few decades sported the Calibre 1861. This year, Omega has decided to revamp its Speedmaster collection and introduce a new calibre into its Moonwatch and debuted this Omega Speedmaster Professional Moonwatch Master Chronometer With Co-Axial Calibre 3861. The 3861 Moonwatch is still flight-qualified by NASA but has been built to higher standards than its predecessor. It is not just a COSC-certified timepiece (tested by an independent Swiss institute for its timekeeping accuracy), but also additionally faces Omega’s in-house METAS tests, allowing it to earn the name Master Chronometer. Eight tests subject it to intense magnetic fields (it can withstand magnetic fields of 15,000 gauss), test its power reserve, ensure that its timekeeping is accurate to 0/+5 seconds a day, and also check its water resistance. Each Master Chronometer timepiece has a scorecard for each test, and the results of your specific timepiece can be obtained by entering the certificate number of your watch on Omega’s portal. While the new 3861 is available in various dials (silver and black), case material (stainless steel, canopus gold and sedna gold) and strap options (leather, five-arched-linksper-row bracelet and nylon fabric), the one that resembles closest the watch that became an international hit overnight in the Sixties is the stainless-steel case version with a bracelet and a hesalite glass crystal. While the Speedmaster will be immortalised as the Apollo 11 lunar watch, of all its numerous missions into space, the Apollo 13 mission in 1970 that nearly ended in a disaster, was perhaps one of its most important missions. After a major incident aboard the space craft, the astronauts had to turn off the module’s computers, and rely only on their Speedmaster chronographs to precisely time a 14-second window before firing their engines to re-enter the earth’s orbit. If they got it wrong, disaster would be inevitable. The Speedmaster didn’t fail them. How did they do it? That’s a tale for another time. February 2021

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FEB

The SME Story

21

A dedicated hub for the regional startup and SME ecosystem

INTERVIEW

Going the distance While Ben Kinerman-Daltrey saw potential to recruit sales professionals for SMEs, Zein Arbeed noticed the need for the UAE to get acquainted with high-end men’s grooming products. Drew Joshua Dennehy meanwhile changed careers and entered the coffee industry. Here are their stories Zein Arbeed Founder, The Grooming Lab What prompted you to start The Grooming Lab?

The idea to set it up came from a personal experience. My husband was growing his beard back in 2017 and I did not come across too many grooming products that would support his new look, thereby identifying a gap that resulted in the birth of The Grooming Lab. Also, men were not exposed to many grooming brands. The barbershops and pharmacies had more mass-market grooming brands, hence the gap for niche exclusive brands was available and ours to fulfil. Four years down the road, we now distribute four men’s brands covering all aspects of men’s grooming, from beard and shaving to hairstyling, 70

February 2021

Above: Zein Arbeed, founder, The Grooming Lab

and now more importantly, brands dedicated to men’s skincare. Which are some of the key brands/products you are bringing to the region?

We started with the distribution of Captain Fawcett in 2017 that focused on beard grooming and shaving and which is sold in over 50 countries worldwide. Then in 2018, we looked at another niche barbering award-winning hairstyling brand called Dapper Dan from the UK that gave men a chance to use products made with healthy ingredients. In 2020, we grew the portfolio to add Jaxon Lane – a Korean skincare brand dedicated gulfbusiness.com


The SME Story

My co-founder and I were VPs at the seventh-highest funded startup in the Middle East, Bayzat, and helped grow its sales team from four to 150 people. What gap did you see in the market that necessitated the need for such a company?

to men, hugely popular with celebrities such as Nick Jonas among others. And finally, in 2021, we introduced The Groomed Co, one of Australia’s leading men’s skincare and grooming brands with a focus on botanicals and clean beauty for men.

Above: The Grooming Lab distributes Jaxon Lane, a Korean skincare brand for men, since 2020

What is the potential of the male grooming market in the region?

We worked with recruiters in the market when hiring for our previous company, and they never seemed to “get it” when we spoke about startup culture. We want to solve the problem of less funded startups who cannot afford to make mistakes when it comes to recruiting salespeople. Also, going through such hyper-growth in our sales organisation, we faced many challenges to scale training and coaching at the same speed our team was growing. We want to help other startups and SMEs overcome that challenge from all our learnings.

The global men’s grooming industry is expected to hit $78.6bn by 2023, whereas the global men’s skincare market is set to grow 24 per cent in the next five years to reach $5bn. When it comes to the MEA market, the men’s grooming market was worth $3.58bn in 2016 and is expected to touch $4.32bn by 2022. Research also suggests that the GCC men’s grooming market will dominate this growth and is expected to reach $3.27bn by 2022, accounting for more than 75 per cent of the wider region’s male grooming industry. This will be driven by Saudi Arabia and the UAE, which hold a near 85 per cent market share between them.

Does focusing on startups and SMEs make good longterm business sense?

What is your current scope of operations?

We began our startup journey on Day 3 of the nationwide lockdown. This was a huge decision for both Liam (co-founder) and I. We handed in our notice at our previous company at the start of January when Covid-19 wasn’t apparent in the region. We were both given the option to remain in employment, but we maintained the belief that we could solve the problems faced by many startups. In hindsight, starting up in a pandemic was the best decision that we made. We learned how to build a sustainable, revenue generating and scalable business.

Over the past three years, the business has had a steady 15 per cent year-on-year growth from the time we started and with a slight increase in 2020, despite the pandemic. As of 2020, our current sales avenues encapsulate over 50 barbershops and men’s salons in the UAE, three luxury in-store retailers and three luxury online retailers. Our focus market has been the UAE, but we are looking at expansion within other GCC markets shortly. Will The Grooming Lab evolve to include a standalone store too?

We haven’t ruled out the possibility of a standalone store. However, for now, the focus remains on the main business and growing our retail partnerships to both cover and break new ground.

Ben Kinerman-Daltrey Founder, KinFitz & Co What is the core business model of KinFitz & Co?

KinFitz & Co is a sales recruitment, training and coaching business, working specifically with startups and SMEs. What were you doing before you started KinFitz & Co?

gulfbusiness.com

For us, yes! We are keen to “stay in our lane”. We get startups, we understand what it takes to grow a startup, and we are well placed to advise and coach from our hands-on experience. We’ve witnessed the negative impact of unskilled sales professionals through our sales careers across Europe and the UAE, and the power of hiring good sales professionals, especially when every hire is a massive commercial decision. What are some of the biggest challenges that you have encountered as an entrepreneur?

Below: Ben KinermanDaltrey and Liam Fitzgerald, cofounders KinFitz & Co

What are your expansion plans?

We doubled our team last year. We hired both a consultant and a marketing executive. We are aiming to have a team of eight by the end of June, with 10-12 team members by the end of the year. We have gained clients across the UAE, Saudi Arabia and the UK. We are also looking into expanding our operation more in Saudi Arabia, potentially developing business in Israel, and we hope to expand into some of the other startup hubs across Europe. We have taken on more technical and nonsales roles which is a huge area of growth for us and are hiring internally to bring expertise to this field as well. Our online sales coaching platform will also start helping sales individuals who are seeking support on their professional development. February 2021

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The SME Story THE UAE IS MUCH MORE PROGRESSIVE, WITH MANY ‘ACTIVE’ CONSUMERS LOOKING FOR COFFEE EXPERIENCES What are some of the other areas where Three Coffee is working along the coffee value chain?

Being sustainable is really important for the entire coffee industry. We’re seeing new types of bacteria, fungi and pests affecting coffee farms and forcing them to change the way they farm their coffee. If we don’t help farmers manage this (by paying premiums), they will slowly convert their farms to growing other, more stable crops like fruit, vegetables and grain. Karthik, my business partner, has a lot of experience in making small changes to processing techniques that can help improve the quality of coffees our partner farms produce. This helps them make small, inexpensive changes that result in higher returns for the coffees they sell, not only to us, but other roasteries around the world. What is the economic value of the coffee industry here in the UAE?

Drew Joshua Dennehy Co-founder and general manager, Three Coffee What is your earliest memory of coffee?

Growing up in New Zealand, where coffee culture is big, we all get exposed to it at a very young age. While studying law and economics at university, I worked in cafes, and so have had a strong connection to hospitality, coffee and customer service. When I first moved to Dubai to work in a law firm, I very quickly found out that it wasn’t for me. I needed something more dynamic and people-oriented. Six months after I started my law journey, I was back into the coffee world and never looked back.

Above: Three Coffee’s online quiz identifies customers’ ‘coffee personalities’ Below: Drew Joshua Dennehy, co-founder and general manager, Three Coffee

The UAE coffee market is valued at around $200m and it’s growing really fast. The UAE and other GCC markets are growing at a really high rate, somewhere around 7.5 per cent per year. The UAE is much more progressive, with many ‘active’ consumers looking for coffee experiences, where they’re tasting new and exciting flavours in their coffees. This experiential consumption is part of what I believe is driving the high compound annual growth rates here in the region. Does the UAE have an established coffee culture?

The UAE has a strong connection to coffee history through the Dallah and Arabic style coffee which in some ways is driving global trends. There is no other market, apart from perhaps Japan and Korea, that has such a demand for fruity, and what could only be described as “funky” flavour profiles in their coffees. I’m excited for where the specialty coffee industry is going. The UAE and GCC won’t be adopting trends, but setting them.

What is the USP of Three Coffee and what will it bring to the region?

What are some of your plans you have for the business going forward?

We really believe in the idea behind specialty coffee; that we need to pay farmers more for the coffees we buy to keep the industry sustainable. But to pay farmers more we need to be able to charge more for the coffees we sell. To be able to do that we need to make sure we’re doing the best job that we can in roasting, brewing and most importantly recommending the right coffees to the right people. To do this we’ve come up with an online quiz that identifies customers’ ‘coffee personalities’, automatically recommending coffees that we believe suit those preferences.

Saudi Arabia is a massively underserved market at the moment. There is so much demand for coffee and there will be a lot of growth from both the demand and supply side in Saudi. We’ll also be looking to open our new roastery-come-experience centre here in the UAE. We want people to be able to walk in, touch and feel our brand and understand what specialty coffee is. Education will be centrestage, from the way the space is decorated to the coffee menu and the way we interact with our guests.

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February 2021

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The SME Story COMMENT

Mohamed Juma Al Musharrkh CEO of Sharjah FDI Office (Invest in Sharjah)

Developing a resilient economic future Strategic investments in the real economy are essential to grow the market

T

ILLUSTRATION: GETTY IMAGES/CARGO

oday, the question before business leaders and entrepreneurs around the world is not whether investment under the current circumstances is feasible or not, but rather where and with what we ought to invest and how we must adapt our investments in light of the present circumstances to push business and the economy forward. If we look back in history, we will see that the global economic development journey and milestones achieved attest to the ability of business communities to adapt to transformative changes and overcome challenges. The shift in investments from the agricultural and industrial sectors to the tech industry was a result of the evolution of an agrarian society to an interconnected world driven by modern technology. These changes affirm the agility of investments to keep pace with changing market dynamics and their ability to pave the path forward for the growth of new economic sectors. It also demonstrates that conscious investment responds to opportunities created by challenging circumstances to drive future growth. With the onset of the Covid-19 pandemic, we have seen how business communities adapted to unprecedented disruptions to ensure business continuity by working remotely. The same was evidenced in the public sector where government bodies moved towards digitising their services and communications with customers. However, to ensure continued growth and development, this adaptability must also be seen in innovative investment decisions that meet current and future needs. The first step in establishing an innovative investment trend is recognising an important fact: The pandemic that has crushed economies has also paved the way for new investments in online business services, health and medical R&D sectors, and personal safety products. Most importantly, it has opened the door to pitch innovative ideas to investors such as: what is likely to be the next form of transportation, what is the new way to provide public services, and how are big companies investing in solutions to ensure business continuity?

gulfbusiness.com

February 2021

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The SME Story Billion dollar baby

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February 2021

Mega (+$100m) funding amount

Undisclosed proxy

Disclosed funding

1,031m 1bn

941m

914m

862m

170m

680m 600m

150m

100m

800m

625m

160m

320m

150m 71m

400m

654m

711m

502m

471m

2016

2017

2018

2019

2020

201

333

442

573

496

200m

280m 0

NUMBER OF DEALS

$2.1m

THE AVERAGE INVESTMENT SIZE IN MENA

The big three UAE, Egypt and Saudi Arabia accounted for most of the deals and funding IN 2020

26% UAE

56%

24%

UAE

Egypt

COUNTRY SHARE OF TOTAL DEALS 13%

COUNTRY SHARE OF FUNDING AMOUNTS

12%

18%

Others

Others

KSA

15%

17%

Egypt

KSA

4%

Bahrain

6%

9%

Oman

Jordan

$579m

total funding in the UAE startups

26% Others

Delivery & l ogistics 4%

Transport 6%

Healthcare 7%

12% F&B

INDUSTRY SHARE OF TOTAL FUNDING IN 2020 14% Fintech

purchasing power. It was carried out based on brave investments in the real economy and by neutralising sectors that generate debt without tangible or service returns. The ‘New Deal’, which established critical economic safeguards and had a lasting positive impact on the US economy offers lessons in how to guide economies through recessions or critical phases. Covid-19 has been a gamechanger for the investment-development paradigm and a catalyst for sustainable investing. This momentum for change is bolstering expectations for eventual global economic recovery. Today, we have the tools to develop our investments that were not available during the Great Depression and the ‘New Deal’. Hence, the expected economic transformation stems from wise decision making where purpose-led and long-term sustainable growth take precedence over short-lived gains across the investing landscape.

IN US DOLLARS

15% Real estate

COVID-19 HAS BEEN A GAMECHANGER FOR THE INVESTMENTDEVELOPMENT PARADIGM AND A CATALYST FOR SUSTAINABLE INVESTING

MENA venture capital funding crossed the psychological barrier of a billion dollars in 2020 for the first time, 13% up from 2019

16% E-commerce

The answer to these questions lies in asking ourselves how we can make strategic and deliberate efforts to invest in a strong and resilient economic future by facing and overcoming our challenges today. Our experience at Sharjah FDI Office has shown that investment in the real economy – which means tangible assets and sectors that fulfil basic needs of individuals and societies, in addition to vital industries such as healthcare and education, will enable economies to overcome crises because the demand for these products and services continue, irrespective of the situation. Most importantly, investment in these sectors generate sustainable jobs and motivate human cadres to develop their skills. To illustrate my point, let me take you back to the ‘New Deal’ that sought to reinvigorate the American economy from the Great Depression of 1929 to a path of substantial growth, increase in economy size, a steady generation of jobs, and an increase in

SOURCE: MAGNITT 2021 EMERGING VENTURE MARKETS REPORT

gulfbusiness.com


MOHAMMED OMRAN

A BUSINESS ICON WHO SHAPED THE TELECOM INDUSTRY OF THE UAE. READ ABOUT HIS JOURNEY IN MILESTONES: IN CAREER AND LIFE. AVA I L A B L E I N E N G L I S H A N D A R A B I C A C R O S S A L L L E A D I N G B O O K S T O R E S A N D AT B O O K S A R A B I A . C O M

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A Winning argument - Emirati Lawyer Youssef Al -Bahar presents a solid case on why the UAE's legal system is future-ready.

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A Winning argument - Emirati Lawyer Youssef Al -Bahar presents a solid case on why the UAE's legal system is future-ready.

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