EXPANSION OF DMART

IN MIDDLE EAST
Group Members:
Roll Name
nos.
33 Priti Sawant
39 Shubharun Bose
48 Darshika Desai
52 Shraddha Ghode
 Retail life cycle

• Higher Spending
• Sophisticated competition
• Retail in spotlight
• High risk
• Medium potential
 SWOT
• Long term Focus • Focused on Certain
• Slow Scaling Up Places(Western
• People centric States and low
management presence in south)
Style • Slow Growth
• Discount Policy • Sustainability of Low
• Clear Price based pricing
STRENGTH WEAKNESS
Differentiation • No frills

OPPORTUN
THREATS
ITY
• Online Retailers • Technology
• Online Startups • Personalization of
services
 PESTLE ANALYSIS
1. POLITICAL

Indicator of Political Freedom:

Ranking: Not free

Political freedom: 6/7

Civil liberties : 6/7
(1 represents the highest and 7 the
lowest level of freedom)
(Source: http://www.freedomhouse.org/

• Type of government: Constitutional Monarchy.

• President: Sheikh Khalifa bin Zayed Al Nahayan (since 2004)

Prime Minister: Sheikh Mohammed bin Rashid Al Maktoum.
(since 2004)
• Next presidential elections: 2019.

• There are NO political parties.

• Political stability : HIGH.

2. ECONOMIC

Source: IMF, 2017

• Abu Dhabi contributes to 60% of the total GDP.

• The Government of Abu Dhabi, whose revenues were most affected by
the low oil prices, has prioritised investment projects in the non-oil sector.
• Abu Dhabi’s Department of Economic Development has recently
launched an investment office that will focus on attracting FDIs. FDI
reached $12 billion in 2013, and $14.4 billion in 2014–a 260 per cent
increase on 2008.
• No.1 trade partner – India (12.5% of trade) Indicator of economic freedom:
• Imports from India – 10.67% of total imports (Highest
among all partners) Score: 76.9/100
• Exports to India - 19.14% of total non-oil exports.
(highest among all partners. World rank : 8
(source:
http://www.heritage.org/index/explore)
• Total Imports (2016) : 184 billion USD.
Total Exports (2016) : 98.8 billion USD.
Abu Dhabi owns – 95% of the oil and
92% of gas reserves of UAE.

• UAE’s Retail sector growth for 2018 – 3%. Online retail growth for 2018 – 95%.
• Since 2010, capital formation in the wholesale and retail sector has more than
doubled.
• FDI investment in retail and wholesale trade has increased from AED 16781 in 2007 to
AED 62000 in 2012.
• According to JLL, gross leasable area (GLA) in Abu Dhabi’s retail sector
grew from 1.9m sq metres in 2012 to 2.6m by the third quarter of 2015.
• The country follows an Open – Door policy for foreign trade. (tax-free status,
freemarket policy, flexible commercial laws, 100 per cent foreign ownership)
 3. SOCIAL

• Abu Dhabi is the capital and the Population – 3 million (62% of UAE’S
population)
second most populous city of
the United Arab Emirates.
• Major cultural and commercial centre Out of the Total Population of 3 million,
550,000 are Emiratis.
• Commercial hub of UAE.
• Abu Dhabi also ranks as the 67th most
expensive city in the world.
Indian Migrants in Abu Dhabi:
• Official religion: Islam. 2 million.
• The emirate covers 67,341 km2 , nearly
87% of the UAE.
Indian expatriates in the UAE - largest
• The population density is community of Non-
Resident Indians (NRIs) in the world
21.73/km2 (56.3/sq mi), making it the
largest emirate in the UAE.
Number of individuals employed in the
retail sector in UAE is around 165,000, of
which around 162,500, are expatriates.
4. TECHNOLOGICAL
• A quarter of journeys in Dubai to be driverless by 2030.

• Plans to develop and exploit 3-D printing, a process that the

consultants McKinsey estimate will have a $550 billion impact
on the global economy in the next 10 years.

• A target of 25 per cent of buildings in Dubai to be

constructed using 3-D printing by 2030.

• 2057 strategy includes plan for robotic cops and firefighters,

outer space patrol and smart police stations.

• THE UAE's investments in space technologies have exceeded

AED20 billion by 2015.

• “UAE is aiming to be the WORLD HUB for Technology.”

 5. LEGAL

• The retail sector in Abu Dhabi is regulated by ADDED (Abu Dhabi Department
of Economic Development), in accordance with Federal Law 24/2006.

• The Department for Consumer Protection has since 2011 worked with major
retailers to establish fixed prices on everyday household consumables.

• Value Added Tax has been introduced in UAE from January, 2018.

• There are four major federal laws affecting foreign investment in the UAE: the
Companies Law, the Commercial Agencies Law, the Industry Law, and the
Government Tenders Law. 19 new laws are being discussed to encourage FDI.

• The country follows an Open – Door policy for foreign trade.

• Double taxation agreements and dedicated organisations have been set up

to support UAE’s international trade position.
 FDI POLICY, UAE:
The Federal Commercial Companies Law
issued in April 2015, states the following
for foreign companies :
• Minimum of 51 percent UAE national
ownership.

• Branch offices of foreign companies

are required to have a national agent
with 100 percent UAE national
ownership.

• The new commercial law allows

companies to offer between 30 and
70 % of shares upon undertaking an
initial public offering (IPO) and
eliminates the requirement to issue
new shares at the time of IPO.

• A provision to allow 100 percent

foreign ownership outside of free zones
is restricted to certain sectors.
 6. ENVIRONMENTAL

• Environment Agency – Abu Dhabi (EAD) is a governmental agency that was

established in 1996. It is committed to protecting and managing biodiversity,
providing a clean environment and promoting Sustainable Development in
the Emirate of Abu Dhabi.

• The six strategic goals :

A. An environmental and natural resources regulatory system.
B. An environmental and natural resources monitoring system.
C. A management regime for fisheries.
D. A management regime for water resources.
E. A regime for management and rehabilitation for wildlife.
F. A society for increased environmental awareness and education.
 ENTRY STRATEGY
organic

Positioning competition

D mart

Trade
EDLP
shows

Organic
and
gluten
free
 PRODUCTS
Veggies, Fruits, Dairy

Groceries (daal, sugar, rice, salt)

Apparels for kids, males and females

Personal Care (Soaps, Shampoos, Cleaners, Toners)

Toys and games for children

Kitchenware (utensils, plastic containers)

Home Appliances (Mixer, Grinder, Toaster, Iron)

Footwear

Daily essentials (Biscuits, snacks)

 PRICING

EDLP premium Dmart

• Penetration pricing
• 6-7% lower than competitors
• Major competitor : Lulu Hypermarket
• Conservative audience- large scale discount on grocery & non-
grocery items
• VAT- 5%
PLACE

• Labor migrants
• Proximity to
market, malls,
competitors.
 PROMOTIONAL STRATEGIES

Bulk
EDLP Gift Purchase
Coupons Coupons

Television &
Newspaper
Festival (English-
Discounts Arabic-Hindi- Hoardings
Urdu)
NEWSPAPERS NEWS FESTIVALS

Gulf News Eid Al Fitr

Emirates
News Eid ul Azzha
Agency
The National (official & Eid milad un
other events nabi
coverage)
Khaleej Times Moharram
 QUESTIONS:
1. Management style of Dmart?-People centric
2. Dmart Strategy?—EDLP