Malls have become the go-to place not just to shop but to enjoy quality time, meeting, chatting, eating and entertaining oneself or with the whole family and friends. But do we have just enough or too many of them, including online platforms? Alvin Thomas follows footfall
Jameela al Riami, 26, has happy memories of hanging out with her cousins in the mall as a teenager. According to the business consultant, the best years of her life as a teenager was when she would take a taxi down to the City Centre Muscat in Seeb or the SABCO centre in Qurum and spend about six to eight hours window shopping.
As time passed, one would have imagined her routine to have evolved – but it hasn’t; not even slightly.
After her working hours (at about 4pm), the mother of one takes her daughter to – you guessed it – the mall. Later in the evening, her cousins join her. But one thing has taken a complete turn: She now spends money as opposed to staring at commodities from the glass windows. It’s something she takes pride in as she shows us the new Swarovski watch she has bought from the exclusive outlet at the Oman Avenues Mall – a newer mall complementing the retail scene in Oman.
“There’s no better place to while away time than the mall,” says Jameela. “It’s the best spot to catch up with your friends and family – and perhaps even indulge in a spot of shopping. I’ve never had regrets spending time at the mall.”
And experts say more people are opting to spend time at these one-stop shops than ever before in Oman. The growing number of brands foraging into the retail sector proves the point.
In the span of a year or so, two new mega malls are expected to open in the Sultanate. The Mall of Oman – which is a Majid Al Futtaim initiative – will soon be crowned the largest mall in the country. When it opens in 2020, the mall will feature 350 outlets in a 13.7ha retail space. It will feature Oman’s largest snow park, with an 8,000m2 play area, and the largest Vox Cinemas and Magic Planet in the region.
The mall is also part of a wider $1.33bn (RO515m) investment plan in the country by Majid Al Futtaim, which has also announced the construction of City Centre Sohar and My City Centre Sur.
If that wasn’t enough, the Mall of Muscat, which will be situated in Mabellah, is expected to open doors later this year. It will feature Oman’s first full-fledged snow park, a large aquarium and a host of exclusive retail outlets.
Lulu Group has also signed on and confirmed that they will be opening the largest Lulu Hypermarket in the Sultanate, with a total area of approximately 22,000sqm, in the mall.
All of this is translating into a fresh wave of optimism for malls in the country.
In an interview with Y, Gogi George, General Manager Development & Leasing, Lulu Group International, elucidates his thoughts: “Retail in Oman is steadily moving from the traditional formats into a highly organised sector with the advent of modern-day malls, and our view is that customers would now have the opportunity not only to shop but also to spend quality time in
“The experiential factor would play a major role in customer behaviour in the future,” he adds, further citing that development is strong in this sector.
“The retail culture here is evolving from destination-based centres to mall-centric offerings, wherein customers have all-under-one-roof visibility.
“The more and more malls opening in Oman (sic), the customer benefits – the transition would also increase the competition level among malls which would then lead to malls adopting innovative approaches to retain their customer base,” he explains.
But it hasn’t been a walk in the park for the group. Success has taken its time even for a standout brand like LuLu Group International.
“As with any other mall, the incubation period wherein customer expectation versus the mall offerings need to be realigned. And we are successfully managing this.
“Along with training the local manpower, which has been a tedious task, we have also effectively managed the establishment of training through our internal resources.”
Another hindering factor was the 2015 oil price slump, which came as a shocker for the industries in Oman.
“The impact of the dropping oil prices was generally felt through consumer optimism dipping. But we could realign our marketing and promotional efforts based on the consumer trends, which generally helped our retailer community in the mall,” he adds.
This also helps answer the long-standing question: Is the Oman market saturated with retail malls?
“Each mall has its perks and features,” says Sami al Balushi, a data analyst at a private logistics company, who we interviewed at the Oman Avenues Mall.
“The Baushar area is cramped – as you can see from the traffic – with malls. The Oman Avenues Mall, Muscat Grand Mall, Panorama Mall and Ramez Shopping Centre are all situated within the three-kilometre radius.
“But I prefer the Oman Avenues Mall because it provides the kids with entertainment while we can carry on shopping. That’s something generally missing from Muscat Grand Mall and Panorama Mall,” he tells Y.
“But if I want to watch a film, then I would rather head to the Muscat Grand Mall or the Azaiba Mall (in Azaiba). So, the choices are clear – every mall has its own unique fingerprint and it’s up to us to decide. One can no longer complain that there are no options,” he laughs.
This is further asserted by Indian expatriate Shashank Bharadwaj, a showroom manager in Oman. He explains: “A lot of Asian expats living in the Muscat area would certainly want to go to LuLu hypermarket, Ramez Shopping Centre or Carrefour (in City Centre Muscat) as the food items there are more affordable for the middle-class community.
“Therefore, there is no reason as to why these malls would ever go out of customers. It’s been the trend for years and it should remain the case too.
“If you notice, a lot of these outlets also provide customers with offers on selected goods. This means people can mix and match – basically where they can buy what they want – from the place that provides the best deal,” he tells.
This has further given rise to a slew of new malls and hypermarkets with the expat populace in mind.
Nesto and Mars hypermarkets have already gained significant market shares from the
existing players in the segment. While the statistics haven’t been disclosed, several residents have been known to flood to these shopping centres to avail lucrative offers.
A prime example of this was on the inauguration day of the new Nesto hypermarket in Ruwi. Videos of shoppers grappling over discounted goods was quickly circulated among WhatsApp and Facebook groups, and received over 25,000 views.
Mars Hypermarket also opened its latest outlet in the Seeb Souq in an effort to expand on its current success. Our attempts to connect with Mars International for a comment were futile.
Melissa Joan, an economist based out of the Sultanate, believes that this is the right time for retailers to open shops in the Omani market.
“Oman, unlike many other Middle East countries, is behind when it comes to mall culture,” tells Melissa.
“If you excuse the City Centre Muscat and the Lulu Hypermarkets, there really weren’t any other players. But, now every resident can choose where he or she wants to shop.
The Markaz Al Bahja is another shopping mall in Oman that is garnering heavy footfall.
“Nowadays, malls are so expansive that it will take a person at least four hours to explore completely. This, coupled with the ever-expanding sphere of retail outlets, will definitely engross the interest of the people here.
“Of course, this will also have an impact on the local economy. For example, smaller players will soon see themselves against tremendous pressure to uphold the footfall in their malls and centres.
“The smaller malls offer limited shopping and dining options too, so there’s no doubt that the next five years will be really challenging for them. We also have to see how many survive,” she remarks.
In 2016, there were reports of a 20 to 30 per cent drop in footfall across malls in Muscat, but mall owners chimed together that this was not the case in 2017.
There is, however, one factor that continues to irk the retail sector in Oman: online shopping, a brainchild of the internet age.
To understand the position of the e-commerce sector in the country, we sit down with the chief operating officer, Haris Aslam, of award-winning Roumaan Internet Group – Oman’s largest e-commerce company.
“Online shopping definitely affects physical retail outlets, but the factor is not very big as of now in Oman,” explains Haris.
“There is definitely a shift that we see today but whatever revenue we make today – and in 2014, 2015, 2016 and 2017 – was always there in the market for online shoppers.
“Obviously, we have done our bit to change the thought process, and approximately 50 per cent of the customers we have are the ones that wanted products online and shop locally but were not able to do so before.”
What roumaan.com does is it facilitates the option to shop all locally available goods – starting from electronics, to accessories and fashion goods – within the comforts of your home.
“The e-commerce industry in Oman rakes in more than RO130mn yearly. But this includes travel, hospitality, etc. and most of the revenue is going outside the country – and that is to companies operating outside Oman,” he tells us.
Nevertheless, RO130mn is a very good number for a country with the current amount of e-commerce penetration, says Haris.
“I am seeing a shift. And that’s why we have been able to be as successful as we have been today.”
How successful is roumaan.com? Well, as per the data provided by the COO, we learn that the website clocks in almost 20,000 visitors daily – which is a five-fold increase in a short span of three years.
“Obviously, the conversion rate doesn’t increase as the traffic increases. That’s the case even in mature markets like the USA, China or India. But word out mouth can help generate higher sales. This is because people begin by spending RO20 or RO30, but once they are confident they will be comfortable to spend RO80 or more.”
To entice customers, the website also offers one promotion every month (up from three to four a year), following customer demand.
“You see, this kind of a revolutionary change is only happening here now. It has already happened in the UAE market. The UAE market is a little more matured. For instance, 8 out of 10 people would be considering online shopping over offline. But here it would be the other way around: only 3 out of 10 would do that here.
“But yes, a change is inevitably happening,” he exclaims.
“Roumaan.com has been growing as an online retailer for three years now, and we should be standing as the leading retailer and continue to have our market share as a local online retailer for the next five years.
“Every year, the online market is improving by 25 per cent, or RO30mn. We aim for a 30 to 40 per cent market share in next three years of online shopping. We would like to be looked at as the amazon.com of Oman,” he says proudly.
“But we’re certain that in the coming five years we will be at least 20 times bigger across all conceivable parameters (revenue, profitability, team size, warehousing, etc.).
“So, yes, the change is happening, but it’s about who can rake in the customers with the right form of marketing.”