DUBAI: Business in Ƶ and the UAE is “buzzing,” Alain Bejjani, chief executive officer of the Majid Al Futtaim diversified conglomerate, told Arab News, even as the resilience of their economies is being tested by the pandemic’s unexpected twists and turns.
He gave his opinion on the state of recovery from last year’s coronavirus lockdowns on Frankly Speaking, the series of video interviews with leading business people and policymakers in the Middle East and the world.
“Ƶ (has shown) great resilience during the pandemic, but actually Ƶn measures (to halt the spread of the virus) were quite different from the ones that you have seen in the other markets. I’ve been there in the past few months more than three times and you (can) see that it’s buzzing. It’s coming back,” Bejjani said.
“The UAE had remarkable resilience in 2020 and now is buzzing across the board. We’ve had an excellent second half of the year, especially the third quarter and the fourth quarter that we are in, and basically things are off to a very good start in 2022.”
Business in Egypt is also on a recovery path, he said.
Bejjani has been at the helm of MAF since 2015, consolidating the group’s position as one of the leading retail, hospitality and leisure groups in the Middle East. MAF is well known by consumers throughout the region for its Carrefour supermarkets, its gigantic shopping malls and its Vox Cinemas chain.
Alain Bejjani, CEO of the Majid Al Futtaim group
In the course of a wide-ranging discussion, Bejjani also spoke about the way the pandemic had changed MAF, his plans to give cinema a big boost in the Middle East, and the sustainability of MAF’s businesses, which include a ski-slope in Dubai and another one — set to be the biggest in the world — in the under-construction Mall of Saudi in Riyadh.
On the pace of the post-pandemic economic recovery, Bejjani explained that there could be a financial “hit” to MAF this year, because consumption patterns had changed from online back to in-person retailing.
“So, 2021 was difficult and not 2020. Last year was a difficult year to be able to fulfill and to be able to serve the customers in the safety of their homes, and navigate through the very strict restrictions that we had to deal with because of the pandemic.
“But in 2021 when we had less restrictions or no restrictions, people could go back to stores, the actual consumption changed because people were consuming less. They were not at home anymore as much as they were,” he said.
He said that a full recovery across the board might not come until 2024, adding: “We are in multi-industries and some industries have recovered while others have not yet recovered. So, when you look at our overall results, they are affected by the ones that haven’t recovered yet.”
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Elaborating on the topic, Bejjani said: “For example, the cinema business and the L&E (leisure and entertainment) business — this is a business that’s recovering slower than others and is now actually affected by supply-chain issues.
“When you look at the cinema business, this is a business that was really affected in 2021 not only by the limitations on occupancy, but also by the fact of the unavailability of movies because of production delays and all the supply-chain issues that were triggered by the pandemic.”
In Ƶ, where MAF has been expanding rapidly over the past five years, growth was being spurred by the reform strategy of the Vision 2030 plan to diversify the economy, according to Bejjani.
“What’s happened in Ƶ in the past five years is a blessing. Everyone was dreaming to have Ƶ open up; to have Ƶ come back; to actually become a vibrant and even more vibrant economy, a more inclusive economy; to get women back into the workforce and also into a role in society; to get entertainment back into the Kingdom,” he said.
MAF’s most prestigious project to date in the Kingdom is the Mall of Saudi, a $4.3 billion retail and leisure complex under construction in north Riyadh, due to open in 2025. Bejjani is confident that “mall culture” will overcome the challenges thrown up by the pandemic, but that the lockdowns will change the nature of the business in significant ways.
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“This is, of course, for us a very important, substantial investment and a very strategic project. We’re doing it because we really believe in the future of retail and we really believe that the future of retail is both physical and digital. There is this new word now that’s coined, it’s called ‘phygital,’ and we are seeing that more and more.
“Malls are not only spaces where you actually transact, where you actually shop for something. It’s a place where people come together. It’s a place where people meet. It’s a place where friends and family spend time and create great moments together. Of course they shop, dine or consume entertainment, but also build bonds. This is what malls’ new roles are,” he said.
The Mall of Saudi will be home to the biggest ski-slope and snow dome in the world. Some environmentalists have questioned the building of gigantic indoor snow-park facilities in the Middle East, especially as concerns grow about climate change.
But Bejjani is adamant that the new ski center in Riyadh will comply with the strictest environmental and energy regulations, like Ski Dubai in the UAE does. “There is a lot of misconception around indoor ski slopes,” he said.
“If you look at Mall of the Emirates’ Ski Dubai or the one that you’re going to be having in our Riyadh project, these are actually LEED (Leadership in Energy and Environmental Design) certified assets.
“It actually has been improving quite a lot. We’ve been putting a lot of technology and investment in order to make it as sustainable as possible. So, when you look at the actual slope, it is within a fridge that preserves heat and preserves cold, so minimizes the heat going out and preserves cold inside. And we have a lot of technology to make sure that we actually use the least electricity possible and generate and have the lowest possible carbon footprint.”
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One part of the business set for big growth is the Vox Cinemas chain, which pursued an aggressive roll-out of new venues after the ban on cinemas in Ƶ was lifted in 2018, only to be shut later by the pandemic. Bejjani says he is confident Vox can win business back from the at-home streaming services like Netflix that did so well during the lockdowns.
“People love the experience. Cinema is an experience that you share with others and there is nothing like the magic of being in a theater and people laughing together and living those emotions together,” he said.
Consumers had “maxxed out” on Netflix during the lockdown phase, he added.
One challenge MAF is planning to confront head on is the lack of new content, and specifically regional content, in the Middle East movie industry. Shutdowns in Hollywood and Bollywood studios during the pandemic meant a shortage of new material for movie-goers.
“Ƶ is a fantastic market for local content, whether it’s Arabic content, whether it’s Khaliji or Egyptian content, and this is where we need and we are driving a lot of effort to make sure that we enable that local content much more,” he said.
Vox is sponsoring the forthcoming Red Sea Film Festival as a way to demonstrate its commitment to creating a regional production and distribution network to raise the level of local content in cinema.
“We have a huge market with a lot of young and not-so-young cultural-product consumers that want local content,” Bejjani said. “This is how we can contribute to the rebirth of our civilization, and the rebirth of the cultural life in our part of the world.”
