Since the downturn in 2008, many sectors have begun to see signs of life again. How would you gauge the climate for luxury retail products?
SEDDIQI: With the economic downturn the luxury industry was not affected as much as the financial and real estate sectors. People who could afford luxury items can still afford luxury items.Â Today, we are out of this downturn and are facing other crises, such as what is happening in Japan and what is happening in the region in Libya, Syria and Yemen. We feel that things will get better and the UAE is always in a neutral position and that helps.
How is the changing demographic structure of the population affecting the retail industry?
SEDDIQI: Being in Dubai we have always had people coming from all over the world regularly. People who come to Dubai love to stay here for a variety of different reasons. Tourism is a big factor for us. Being the main hub that connects East and West means it is always busy here.
What strategies do family owned businesses employ in order to compete in a globalized economy? Is the traditional structure an advantage or a hindrance?
SEDDIQI: The main structure that we are following is what my grandfather started 60 years ago and that is to build trust with our clients and be honest with the end consumer. We provide the right products at the right prices for this market. People fly from all over the world to buy watches from us and it is not because our prices are cheaper. People feel comfortable buying from us and we always keep full collections available.Â The difference between us and other companies as a family business is that we are dedicated to our work and we are on hand on all of the day-to-day activities. We care about our work and we care about our reputation. Our company bears our name so we have to maintain our image and our reputation. In addition, we love what we do, so that makes a big difference.
Internet commerce is not yet widely used by the general population. Are you concerned that this growing market will cut into your market share/sales?
SEDDIQI: Online sales have become a large market in Europe and the US. In this region, people still do not trust internet commerce. People still prefer, when buying a luxury item, to buy their products face to face. Even in the US or Europe, if you are spending $100,000 or $200,000, people still prefer to see the product in their hands before they make the purchase.
How would you describe the level of competition among luxury retailers in the UAE?
SEDDIQI: The competition between retailers in the UAE today is friendly. Whether it is cars, jewelry, or handbags we all compliment each other. We all carry different brands and we always are in touch with each other to keep up with trends in the market and how we can cooperate on marketing.
Some home-grown UAE brands have expanded internationally. What are your thoughts on international expansion? What markets are most appealing?
SEDDIQI: My father has always said be king in your country. We have recently expanded into Abu Dhabi, but we want to be king in the UAE, not the rest of the world. The UAE is paradise for business today.Â We are expanding very slowly and very carefully. Again, we are a family business that is involved in the day-to-day and we do not have enough family members to send to countries otherÂ than the UAE at the moment.Â I should also mention that Dubai is still the biggest market for luxury goods in the UAE. Dubai has the base and Dubai built the industry. Abu Dhabi is a different market that is much more focused on the local market. In Dubai, we have business from locals, expats, and tourists. I would say that the majority of UAE nationals, even those living in Abu Dhabi, still tend to make luxury purchases in Dubai. Dubai has the reputation of being the hub of the Middle East. Abu Dhabi is rising, but it will take some time.
Online sales have become a large market in Europe and the US. In this region (the Middle East), people still do not trust internet commerce.
Is Dubai a price competitive market for luxury goods in a global context? How do prices stack up here compared to the United States, Europe and China?
SEDDIQI: We follow the Swiss retail prices in watches and jewelry so that we follow the international standard for prices. We do not hike up prices to give a bigger discount, which is common practice in the region. However, there is a difference in price for two reasons. First, we do not have taxes, so we can be cheaper than Europe, the US and the Far East where taxes are applied, and heavy taxes are applied, especially in China for example. The disadvantage we have is that our currency is linked to the dollar. With the fluctuation of the Euro and the Swiss Franc, we get pinched with the arbitrage. However, this is typically offset by the tax benefits of being in the UAE, so prices are typically the same or slightly cheaper here.
Is the retail tourism market important to you? How important are events such as the Dubai shopping festival?
SEDDIQI: Business from tourism ranges from brand to brand. We carry 50 brands, which are comprised of everything from entry-level fashion brands to extreme high end boutique Swiss watch makers. On the aggregate, about 70% of our business comes from locals and expatriates living in the UAE and 30% of our business comes from tourists, but again, it varies from brand to brand.