Digital investments have boosted Majid Al Futtaim's resilience during the COVID-19 pandemic and accelerated its recovery, announced CEO Alain Bejjani.
Majid Al Futtaim is the leading shopping mall, communities, retail, and leisure pioneer across the Middle East, Africa, and Asia.
In an interview with Asharq Al-Awsat on the sidelines of the World Economic Forum (WEF) in Davos, Bejjani confirmed that Majid Al Futtaim continues to expand in the entertainment sector, retail, and sales in Saudi Arabia, announcing its intention to develop new projects this year.
Recovery post-COVID-19
Bejjani said that Majid Al Futtaim grew in 2021 and that growth is accelerating in 2022. “Some sectors witnessed a return to pre-pandemic levels, which is very promising,” he said.
He reported that several markets have recovered, noting that the UAE, and Dubai in particular, has once again become one of the most active markets.
"The Saudi market is witnessing increased activity, and other markets in the region are recording definite signs of recovery."
Digital Environment
The pandemic and its imposed measures led to exceptional circumstances, including lockdowns of varying severity in the region.
The CEO attributed the company's resilience in the face of these economic shocks to its significant investment in the digital sector.
"Over the past five years, we have worked to invest heavily in the digital sector and enhance our digital presence in various markets."
Bejjani said that within a short period, Majid Al Futtaim moved from focusing on the "traditional dimension'' which is still "essential," to the "digital" allowing it "to adapt quickly and maintain our customers and serve them digitally."
He said these measures made it possible to maintain Al Futtaim's competitiveness and even expand its customer base in 2021 and 2022 by serving them digitally during the pandemic.
"We entered the pandemic with a digital sales percentage of 2.5 percent, but today we have outperformed the region's average of 7 percent. We have seen a 400 percent increase in the past year and a half."
As for the total business, Al Futtaim recorded significant growth in 2022, and the first quarter alone witnessed an estimated 24 percent increase.
Inflation Challenges
Markets have been preparing for a difficult economic phase, with the most prominent indicators: inflation and the large price increase. However, the Arab region seems less affected than the United States and Europe.
"There is no doubt that this is a challenge facing the whole world, and it represents a challenge for us in customer service," Bejjani said, pointing out that his company's priority is to ensure food security in various markets by boosting supply chains.
Bejjani was not very optimistic about the solutions to confront inflation, but he stressed the importance of mitigating its impact.
Expansion projects
Bejjani confirmed that Majid Al Futtaim continues to expand in the region, especially in retail through Carrefour and other shopping centers, as it recently opened new shopping centers in City Center al-Zahia in al-Sharjah, Mall of Oman, and City Center al-Maza in Cairo.
Furthermore, the CEO confirmed the continued expansion of entertainment projects in Saudi Arabia.
Majid Al Futtaim opened VOX cinemas in Saudi Arabia in May 2018, and will continue to expand its family entertainment and retail projects through various brands in 2022, said Bejjani, referring to the recent launch of "Lululemon" in the Kingdom.
Ecopreneurship
Majid Al Futtaim had played a leading role in protecting the environment for more than 11 years.
"It is the only private company in the Middle East that began announcing the goals and results of its environmental impact, subject to external auditing,” he stated.
The company adopted a Net Positive sustainability strategy to significantly reduce its water consumption and carbon emissions, resulting in a positive corporate footprint by 2040.
In addition, Al Futtaim received 'low risk' Environmental, Social, and Governance (ESG), which is "the best rating for a private company in the Middle East, and we still maintain this rating to date," said Bejjani.
Activating Economic Integration Efforts
In partnership with the World Economic Forum, Majid Al Futtaim launched a report on ways to unlock the economic potential of the Middle East, North Africa, and Pakistan (MENAP).
The report pointed out that common standards and free flow of capital, goods, and services are estimated to help unlock $230 billion in GDP.
He explained that while 8.5 percent of the world's population lives in the MENAP region, "it accounts for 3.4 percent of global GDP."
Research shows an incremental $2.5 trillion would need to be generated for the region to produce its fair share of GDP.
