SPECIAL REPORT: WHERE IS DUBAI’S PROPERTY MARKET HEADED?
OCTOBER 2020
Oracle
LOCKED ON TOP The cloud computing space is crowded. Here’s how Oracle is looking to book a secure spot
p.37
How 5G is transforming the smartphone industry
p.68
Farfetch’s José Neves on growing in a tough market
BD 2.10 KD 1.70 RO 2.10 SR 20 DHS 20
Gulf Business 07
The Brief An insight into the news and trends shaping the region with perceptive commentary and analysis
51
Special Report: Dubai real estate Has Dubai’s property market started to shake off the effects of the pandemic? Where is it headed? We have some answers
22
Cover Story: High up in the cloud As tech giant Oracle opens its new cloud region in Dubai, its regional head reveals the company’s roadmap for the future
4 October 2020
gulfbusiness.com
CONTENTS / OCTOBER 2020
28 Investing right Venture capitalist Noor Sweid on supporting startups
37 Smartphones 5.0 How 5G is revolutionising the smartphone industry
“If countries today open their borders, we will be fit to run fast, and this is the plan” - Saudi Arabia’s Tourism minister Ahmed Al-Khateeb to Bloomberg
67
Lifestyle
Finding success p.68
Ghost takes the wheel p.71
Editor-in-chief Obaid Humaid Al Tayer Managing partner and group editor Ian Fairservice Group director Andrew Wingrove andrew.wingrove@motivate.ae Acting editor Aarti Nagraj aartin@motivate.ae aartinagraj Deputy editor Varun Godinho varun.godinho@motivate.ae varungodinh Tech editor David Ndichu david.ndichu@motivate.ae Contributor Zainab Mansoor editorial.freelancer@motivate.ae Senior art director Olga Petroff olga.petroff@motivate.ae Art director Ángel Monroy angel.monroy@motivate.ae angel__monroy Photographers Jitendra Jangir Cover: Ángel Monroy
Rolex: Take notice p.74
General manager – production S Sunil Kumar Assistant production manager Binu Purandaran Production supervisor Venita Pinto Chief commercial officer Anthony Milne anthony@motivate.ae Group sales manager Manish Chopra manish.chopra@motivate.ae Senior advertising manager Ravi Dutt ravi.dutt@motivate.ae Group marketing manager Dominic Clerici dominic.clerici@motivate.ae Group marketing manager Anusha Azees anusha.azees@motivate.ae
Vol. 25. Issue 6 October 2020 Printed by Emirates Printing Press, Dubai
Follow us on social media: Linkedin: Gulf Business; Facebook: GulfBusiness; Twitter: @GulfBusiness; Instagram: @GulfBusinessMagazine
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gulfbusiness.com
October 2020 5
CHRONOMAT
On the red carpet
The Brief 8 10 12 13 15
OCT
20
11.4bn
US
10.3bn
China Japan UK
2.3bn 2bn
India
1.8bn
France
1.7bn
Korea Germany
1.6bn 1.3bn
Mexico
0.97bn
Australia
0.93bn
IN US$
SOURCE: PWC GLOBAL ENTERTAINMENT & MEDIA OUTLOOK 2020–2024
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Aviation Startups Leadership Future Management
China has become the second biggest market for cinema worldwide
Floating in a new direction The pandemic has altered the way people look at travel and hospitality. What are they now seeking from their hotels? p.9 gulfbusiness.com
October 2020 7
The Brief / Aviation
ILLUSTRATION: GETTY IMAGES/TARRAS79
Airlines are considering installing Recaro’s equipment as temporary cabin makeovers, according to chief executive officer Mark Hiller. They need fittings that are easy to manoeuver, lightweight and available at short notice, he said. “There is definitely large interest from across the different regions,” Hiller said in an interview. With a coronavirus vaccine possibly years away, airlines need to persuade the public it is safe to fly when an infected passenger might be next to them. Sporadic flareups around the world are putting people off: Global traffic in July was down almost 80 per cent from a year earlier, a steeper-thanexpected slump, the International Air Transport Association said. Of the planes that are flying, many are half empty. Aircraft typically must be 70 to 80 per cent full to turn a profit, so that increases the appeal of devices that let passengers sit side by side without touching heads, brushing shoulders or nudging elbows. Airlines are also figuring out how to apply a disinfectant coating developed by Recaro onto their
A N A LY S I S
Revamped interiors Airplane cabins could look different the next time you fly
H
eadrest canopies and fabric barriers between seats could start appearing in airplane cabins as the embattled industry tries to ward off the coronavirus. Airlines desperate for governments to lift travel restrictions and passengers to return are looking at ways to reassure the public that their health won’t be compromised on a flight. New-look seats and fresh cabins could be a start. One of the biggest companies in that business, Recaro Aircraft Seating, has designed a range of modifications to keep passengers apart and protect them from infection.
8 October 2020
70-80% How full an aircraft typically must be to turn a profit
WITH A CORONAVIRUS VACCINE POSSIBLY YEARS AWAY, AIRLINES NEED TO PERSUADE THE PUBLIC IT IS SAFE TO FLY WHEN AN INFECTED PASSENGER MIGHT BE NEXT TO THEM seats, Hiller said. The German company says it has revamped the substance to repel viruses including Covid-19. While the industry has for months said there’s little chance of catching the virus on a plane because there are hospital-grade air filters on board, that argument has been undermined by breakouts on some flights. All 187 passengers and six crew on a TUI AG flight from the Greek resort of Zante to Cardiff in August were asked to self-isolate after at least 16 confirmed cases were identified on the August 25 service. Recaro, which sold about 150,000 aircraft seats last year, isn’t immune to the crisis gripping the aviation industry, despite potential demand for its designs. Hiller said revenue is expected to drop almost 60 per cent this year. Bloomberg gulfbusiness.com
The Brief / Q&A INTERVIEW
Manu Midha Head of Middle East at Oyo
Explainer: How has the pandemic changed travellers’ hospitality demands? The pandemic is revealing that people are not looking to experiment and prefer staying at tried-and-tested properties How has the regional hospitality industry coped with the Covid crisis so far?
Government imposed travel restrictions and isolation protocols across the region resulted in significant drops in demand at properties. Tourism and hospitality were among the worst hit industries, but the affordable hotel segment is doing better than those in the four-five star category. Based on the available industry data, Oyo properties in the UAE and Saudi Arabia fared better than
50-60%
Drop in Oyo’s revenue and occupancy rates during the lockdown
the market in these troubled times. Oyo’s revenue and occupancy rates dropped by over 50-60 per cent, while some global leading hotel chains experienced revenue drops of up to 75 per cent. What kind of changes has the pandemic brought about in travellers’ requirements?
The need for travel won’t dissipate and visitor numbers will bounce back relatively swiftly. I anticipate that there will also be a build-up of pent-up demand (from both business and leisure travellers) that will generate growth after the lockdowns are lifted and travel patterns normalise. People are also not splurging because they have a smaller disposable income or are concerned about the economy. This may have an impact on higher star-rated hotels, but will not affect budget hotel groups. The pandemic is also revealing that people are not looking to experiment and stay at a new hotel, as hygiene is a major concern. Instead, they prefer to stay at tried-and-tested properties. Businesses have also reduced the need for corporate travel. We see domestic tourism playing a fundamental role in the initial recovery phase. We also see a preference towards independent travel, with travellers avoiding large tour groups and opting for smaller hotels. With Dubai reopening to tourists, have you seen an uptick in your properties in the emirate?
ILLUSTRATION: GETTY IMAGES/MALTE MUELLER
Oyo is fully operational in the UAE. Currently, we have 3,000 rooms in the country with a presence across six emirates, including Dubai, Abu Dhabi, Sharjah, Ras Al-Khaimah, Fujairah and Ajman. However, there are still a small number of owners who choose to keep their properties closed for various reasons. While these are early days, the signs so far have been promising. Our available capacity has almost doubled from April, our RevPAR increased in July and continues to increase month-on-month. Oyo had a tough start to this year, even before the pandemic. Has your restructuring been completed?
Due to the unprecedented nature of Covid-19 and the impact on our business, we have been in active discussions with our partners to re-think every aspect gulfbusiness.com
October 2020 9
The Brief / Startups
THE TREND FOR THE HOSPITALITY SECTOR IN THE GCC MIRRORS WHAT IS OBSERVED IN OTHER COUNTRIES, WHERE SMALLER HOTELS WILL BE THE CHOICE FOR MANY TRAVELLERS RATHER THAN HIGHOCCUPANCY HOTELS Lastly, what are your future plans for this region? And how do you see the regional hotels industry evolve?
The trend for the hospitality sector in the GCC mirrors what is observed in other countries, where smaller hotels will be the choice for many travellers rather than high-occupancy hotels. The affordable hotel segment will recover quicker than the premium and luxury segment. The GCC is and will continue to be an important strategic growth market for Oyo. We rolled out ‘sanitised stays’– an initiative aimed at ensuring that the highest levels of hygiene and health protocols are in place for guests and hotel staff. These include minimal touch check-in and check-out systems, hygiene and safety training for staff and strict enforcement of social distancing norms. Properties that are certified will be promoted as such on all online and offline channels. Future marketing campaigns will reflect this shift with a focus on long stays and weekend getaways. We will also continue to focus on improving the quality of our stock portfolio to improve metrics such as the guest experience, partner experience, RevPar and gross margins. Oyo will continue to invest in building a loyal customer base in the GCC by promoting the active usage of its app. 10 October 2020
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of our business and will continue to consider all options that enable us to succeed. Oyo has always taken a long-term perspective in the countries we have invested in. Our business is on the upward trajectory following periods of almost zero revenue due to the lockdown. The journey we experienced in the GCC has provided us with some key learnings including how to further strengthen our foundation by better using our resources as well as the technology we have to deliver better value.
A N A LY S I S
Piling up The increased use of electronic devices has led to an incredible amount of e-waste that merits urgent attention, writes Zainab Mansoor
I 100+ million
old devices are estimated to be stored in homes across the world
nnovation and lower costs have created an insatiable human appetite for electronic devices. The digital revolution, in recent years, has gone into overdrive, which has led consumers to purchase additional – and mostly new – electronic devices. The outdated or extra ones offer no value, and are often jettisoned. This has led to an accumulation of electronic waste (e-waste). While a digitally connected world has unprecedented virtues and warrants the ubiquitous presence of electronic devices, it is, unfortunately, helping create an escalating torrent of waste. The numbers back the claim: the world produces as much as 50 million tonnes of e-waste a year – valued at over $62.5bn – outweighing all commercial aircraft ever constructed, a UN report in 2019 revealed. Less than 20 per cent of the e-waste is formally recycled, gulfbusiness.com
The anatomy of e-waste Screens
Small IT
Lamps
15%
9%
1%
17%
Temperature exchange equipment
20%
Large equipment
38%
Small equipment
Global e-waste flows
SOURCE: PLATFORM FOR ACCELERATING THE CIRCULAR ECONOMY (PACE) AND THE UN E-WASTE COALITION
with 80 per cent either dumped in a landfill or recycled informally, exacerbating the impact on the health of workers and the environment, a report by the Platform for Accelerating the Circular Economy and the UN E-Waste Coalition suggests. Furthermore, e-waste in landfill contaminates ground resources, putting in peril food supply systems and water sources. Given pressing environmental concerns, the electronics ecosystem warrants a reboot. While governments worldwide have intensified recycling efforts, regional governments have also kept pace with their initiatives. Locally, the UAE government is taking steps to meet its target of diverting 75 per cent of municipal solid waste away from landfill by 2021. However, waste accumulation and its implications call for wider participation from multiple stakeholders to devise initiatives that reuse products in novel ways for greater value. UAE-based recommerce initiative Cartlow is keen on doing just that. “Cartlow offers a solution for retailers and distributors enabling them to liquidate their aged, returned, and non-moving stock, instead of discarding it into landfills. Through this programme, we focus on extending the life of products by repairing, refurbishing, and reselling the used or aged products to customers. Therefore, we reduce waste and carbon emissions by finding a new home for these products rather than them ending in a landfill,” Mohammad Sleiman, Cartlow’s founder and CEO says. Customers can order pre-owned, refurbished, open-box and clearance products through Cartlow’s mobile app. Since its launch, Cartlow has sold over half a million items and hosts 500,000 active users per month, its CEO confirms. “We intend to reduce the environmental footprint when shopping for products. When old devices are disposed of, and when new devices require manufacturers to deplete more of the earth’s raw materials, unsustainability and pollution arise. Every time you buy a used or a refurbished product, you are engaging in recycling. Every time a sale happens on our platform, the customer is unconsciously taking a big step in helping us eliminate unsustainable practices. We want all our customers to have a positive change on the planet,” Sleiman concludes.
The Brief / Leadership COMMENT
Dr M Muneer, Managing director of CustomerLab Solutions and co-founder of Medici Institute, and Ralph Ward, a global board advisor
Is your CEO succession plan prepared for a pandemic? The Covid crisis has revealed the importance of having a well-thought out succession plan for executives
12 October 2020
in case both #1 and #2 are hit by the same bus. If the current CEO has an unfortunate accident and the current strategy is working, you may have a best-case successor. But what if the CEO leaves in a scandal; a pandemic-created crisis; or if an activist investor demanded the change? You’ll want another name in the envelope who can both lead and shake things up. Consider also a three-month emergency successor who might step up from the board until a longer-term inside successor can take the reins. Use scenario planning and risk-heat maps to craft a matrix of responses. Will we need a ‘temp’ CEO? In the UK, Prime Minister Boris Johnson was temporarily waylaid by Covid19, which shook up the British political system that has no provision for a short-term fill-in PM. What if your company faces this situation? The chief executive may be out of action during a recovery from illness or injury. How much regular duty can he or she
ILLUSTRATION: GETTY IMAGES/DIGITAL VISION
A
multinational client CEO has been planning to resign for three years in a row, but every time the topic came up, the board persuaded him to continue for another period, saying a succession plan would be finalised before he could hang up his boots. This year was finally meant to be his year of freedom from the company, but the pandemic hit. And now the board just doesn’t feel a new person can succeed him during this turmoil. C-level succession planning has long been inconsistent among corporations worldwide and even in large local companies, it is often vague and reactive. In some cases, the talent planning and development for top roles are well in place, but what is missing might be the chief executive succession plan. In your organisation, how current and actionable are your emergency succession plans? The coronavirus crisis has shaken up a lot of certainties about how effective executive succession planning really is. Are your plans in jeopardy because of the pandemic? Here are a few questions you can ask yourself to find out: Is your plan really a plan? We find that many of our corporate clients realise the harsh reality of dud succession plans at this time. A survey of over 50 per cent of S&P 500 companies found that only about 20 of them had a real, written and formal plan. This is defined as who does what, and precisely how the plan will be implemented. (Note: writing a name and tucking it into an “Open in Emergency” envelope is not a plan). Is the plan both deep and flexible? Best practice today is to demand that the current CEO, top team, and the board craft a crisis plan that can be implemented immediately, smoothly and with flexibility. Organisations should have at least two or three names in the list and not just one. This will ensure leadership
gulfbusiness.com
The Brief / Future Your inbox is full
The number of emails sent every day is showing no signs of slowing down
handle during convalescence (if any), and for how long? When we face a virus that is highly infectious and debilitating, such a temporary ‘understudy’ CEO plan is a must.
IN BILLIONS
319.6 306.4
LIKE PEACETIME GENERALS IN WARTIME, POTENTIAL SUCCESSORS MAY HAVE EMERGED AS NOT BEING UP TO THE RADICAL DEMANDS DURING THE PAST FEW MONTHS boards are making a second leadership assessment of their leaders currently. They are also searching for outside talent. We have heard of two boards asking for external candidates who’ve been through prior crises and headed a recovery. Moving forward, the pandemic crisis is expected to shake up long-term succession planning in other ways. We predict many CEO hires will be from external industries. Some boards may tend to play it safe by sticking with hires from closely allied fields. Also, as is common in a crisis, boards are sticking with their current talent line up for now, meaning less immediate top executive turnover. But though change slows during a crisis, it springs back in a year or two. CEOs who aren’t up to the demands of 2020 will be vulnerable in 2021. Investors and regulators have prodded boards to disclose more on their succession plans over the past few years. Expect them to be very demanding on this topic during the next proxy season. gulfbusiness.com
293.6
300
Should our succession plans be different now and how? Even assuming you had all the above plan ele-
ments in place at the start of 2020, the world has changed and so has our view of our leaders and their skills. While the pandemic may have mainly accelerated the changes that were visible a year or two before, it certainly feels different for the uninitiated right now. Leaders now need more resilience, agility and ability to lead by example. Like peacetime generals in wartime, potential successors may have emerged as not being up to the radical demands during the past few months. Many rising executives who came of age since the economic crisis of 2008 have never faced a trauma such as this. Is your board building a review of crisis responses and results into its talent evaluation? Some of our client
347.3
333.2
281.1 269
250
200
2017
2018
2019
2020
2021
2022
2023
SOURCE: STATISTA
Rehan Khan Principal consultant for BT and a writer of historical fiction
COMMENT
The bane of emails An excessive email culture is leading to a loss in productivity. Here’s how you can deal with it
Junk space
55% of all emails today are spam, but what kind of emails are we receiving?
Dating-related 30.4%
Healthcare 20.6% Jobs 14.5%
Others 34.5%
SOURCE: STATISTA
A
common problem that plagues professionals these days is an overflowing inbox with emails. And so it was with two dear friends my wife and I were having dinner with recently. They spoke about how the culture of their firm necessitates that it conducts its business over email. They’re inundated with email messages with long threads, in which everyone seems to copy everyone else, while adding very little substance to the discourse. Sound familiar? Over the years there have been numerous publications on the hidden cost to an organisation due to an overzealous email culture. One such study was reported in Harvard Business Review by Tom Cochran, then CTO of Atlantic Media. He measured that in a single week, he received 511 email messages and sent 284. This averaged to around 160 emails per day over a five-day week. Assuming he only spent 30 seconds per message on average, this accumulated to an hour and a half per day dedicated to moving information around like a sorting machine. Delving deeper he found that Atlantic Media was spending well over a million dollars a year to pay people to process emails. October 2020 13
The Brief / Future COMMENT
If your organisation insists on maintaining a heavy email culture despite the impact on the bottomline, then here are a few things you can do personally to maintain your sanity. Decide when you’ll check email. For me, this tends to be first thing in the morning. Then after lunch. Followed by towards the close of the day. The rest of the time email remains off. If it’s urgent, someone will call me. Now I appreciate that if you’re working on a tight deadline, with a tender submission due within 24-48 hours, then of course this isn’t possible, and I don’t follow this practice either. However, for the
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+1
14 October 2020
regular working day, you can implement this or another routine. Avoid randomly checking for new email messages when you are between tasks. It will only distract you from performing real work. Remember your real value-adding work might be along the lines of: creating a solution for a customer, preparing a pitch document, doing business development, building a project delivery programme or writing a funding paper. When you do focus on email, sift through them in 15, 20 or 30-minute cycles. Set a timer and when it goes off, stop. It’ll surprise you how many emails you can process when there is a countdown timer ticking away. I tend to operate in this way two or three times a day. If you simply can’t do it this way, then at the very least only check your emails at the start of every hour. Avoid keeping your to-do list on your email application, otherwise you’ll get sucked into a vortex of incoming messages. Use an application like OneNote or Evernote where you allow yourself clear space to process the thoughts and tasks for the day. When the message of an email is highly emotive, in other words it caused a stir or you feel angered by it, then remember that you don’t have to respond immediately. Give yourself time to respond in a more pragmatic and measured manner. You’ll be surprised by how much more relaxed you feel when you avoid heated unproductive email exchanges. Emails can even cause physical stress. One study reported that participants who went without emails for just one week, found that their heartrate variability changed as they became significantly less stressed. In addition, the participants interacted more with others, spent longer working on tasks, multitasked less, and were a lot more focused. gulfbusiness.com
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The Brief / Management
Doreen Remmen CFO, Institute of Management Accountants (IMA)
COMMENT
A time of transition
CFOs need to remain flexible and adapt quickly to a changing environment
T
he function of a chief financial officer has changed as a result of rapidly evolving technology, which is revolutionising businesses and causing disruption. CFOs today have to work with big data and analytics, new tools that they can use to drive business insights and reconfigure the financial process. While this opens up new avenues, it also comes with added pressures, as CFOs need to be more flexible than ever before in order to deliver results and drive better services for the business, at zero cost impact. This has never been more important than in the midst of the Covid-19 pandemic. Traditionally, the finance profession has been built around technical facts, operational functions and a logical flow of information. However, the impact of Covid-19 and the increasing digitisation of the workplace brings several opportunities and challenges in the finance and accounting world. Businesses are investing more in technology and focusing on R&D, meaning that CFOs need to adapt quickly to a changing environment, while also adjusting to
gulfbusiness.com
the current economic framework in order to enable sustainable business change. In times of upheaval, it is essential to stay flexible in order to deliver the best results for a business. Part of this means breaking out of the traditional silo and donning multiple hats by becoming a key supporter of performance management, technology strategy and talent development, to help the company achieve the greatest value. This evolution into a cross-functional role is proactive and organic, given the interdisciplinary understanding finance and accounting professionals have of how the various aspects of business eventually connect. CFO functions are at the forefront of digitisation and help create value through strategic leadership. The CFO role has gradually become more centre-stage and has taken on a more strategic hue; it puts them in a position to drive change, and they must take advantage to safeguard the business at all times. This also means building a stronger business that is resilient and capable of withstanding the test of time. Cash flow deserves special attention.
Here are five key tips for businesses to navigate these challenging times: 1. Cash flow considerations: Understanding the cash and working capital needs is the most important first step in any cash flow management strategy. Consider assessing your cash flow situation for multiple timeframes, such as 60 days, 90 days, and six months. Each of these may require further consideration of different scenarios. 2. Document expected payments: An important first step is documenting all your payments to get a complete picture. Work through what your revenues, expenses and cash flow will look like over the time frame you are trying to manage. 3. Apply the 80/20 rule: After assessing the situation, identify the 20 per cent of customers that bring you 80 per cent of your revenue, and focus your attention on collecting what you can from them. Prioritise existing and long-term relationships over new ones; those are the customers who are most likely to understand and be willing to work with you. 4. Consider factoring: If your accounts receivable is significant, factoring may be another option. If you consider this alternative, make sure you understand the terms of any agreement so you can approximate these costs for your cash flow projections. 5. Operating costs: Reach out to vendors and ask for payment term extensions. The reality at present is that most – if not all – businesses have been affected by Covid19, and CFOs are currently key partners in helping to strengthen businesses as the economy picks back up. There is no time like the present to ensure that finance and accounting professionals have the knowledge necessary to contribute during this critical time, making reskilling and upskilling an essential consideration. Education and learning platforms across the world have given free access to their resources for people to make use of and improve their knowledge and skills. This can help create leaner and more agile teams that are able to perform multiple functions. Implementing a learning organisational approach could also be great for employee retention, not just business continuity. This is undoubtedly a unique time to be a CFO; one that requires agile thinking and a progressive approach. October 2020 15
ILLUSTRATION: GETTY IMAGES/MALTE MUELLER
The Brief / Partner content
COMMENT
Yves Bonzon Group CIO, Bank Julius Baer
Will healthcare take the lead in 2020s? What are the biggest trends set to redefine the future of the industry?
E
very year around October, Julius Baer gathers its senior asset management and research experts to discuss long-term economic, financial and social trends. The resulting analysis and conclusions are summarised in our annual report titled Secular Outlook. Last year’s gathering was particularly interesting, as we made an attempt to accurately forecast the drivers and leaders of the new decade. What we were leaving behind was a US technology-led bull market, similar, in some respects, to the booming 1990s. Keeping in mind that market leadership change doesn’t happen overnight and is a long-term process, the ultimate question in the room was: ‘Who will be the leaders of the 2020s?’ While candidates were plenty, going from AI and cloud computing companies, to themes like the rise of China and sustainability, strong arguments pointed us in the direction of the biotech sector. 16 October 2020
LIFE SCIENCE DISRUPTION
Even before Covid-19, gene-based therapies were positioned at the intersection of cutting-edge healthcare innovation, big data in medicine and unmet medical needs with high return potential. As healthcare costs are placing a rising burden on consumers all over the world, digital technologies have increasingly been adopted across the healthcare industry. These innovations, along with other structural trends, have been pushing life expectancy upward and changing lifestyles in fundamental ways. This has a direct impact on how we manage our money and make investment decisions. Covid-19 has further accelerated the digital disruptions that we have been observing in the life sciences area. HEALTHCARE LEADERSHIP AFTER COVID-19
Yves Bonzon, Group CIO, Bank Julius Baer
While no one could have foreseen the sudden emergence and rapid spread of a deadly virus, Covid-19 has further accelerated the digital disruptions that we have been observing in the life sciences area. Now we have entered a phase, where, on the one hand the priority remains on finding rapid and effective responses to the challenges the virus poses. On the other hand, the future of the industry – and humanity at large – depends on our collective ability to best understand what the new normal will look like, and come to terms with the challenges and opportunities it brings. One thing is clear: The pandemic reminded us of the role that healthcare plays in the grand scheme of things – and by extension, that it deserves the attention of investors and a place in their portfolios. gulfbusiness.com
The Brief / Partner content COMMENT
Dr Damien Ng Next Generation analyst, Bank Julius Baer
Three trends defining the future of healthcare The weakness of the present healthcare system revealed by the Covid-19 crisis, along with the rise in chronic diseases associated with lifestyle changes and a rapidly ageing population worldwide, will shape the future of healthcare DIGITAL HEALTH
The pandemic will accelerate the further digitalisation of the healthcare industry, particularly with a focus on telemedicine, mobile health and medical technology (medtech). Medtech is a broad sector that encompasses the use of any technology that can save or improve the quality of life of individuals suffering from a multitude of health conditions. Simply put, medtech may range from familiar objects such as syringes and hearing aids to more sophisticated devices such as medical robots, body scanners, intraocular lens and replacement joints for knees and hips. For example, the outbreak of the Covid19 crisis has revealed many countries’ willingness to deploy medtech as part of national efforts to deal with a public health emergency situation. In China, for instance, medical robots are used to provide support to frontline medical workers by aiding them in the cleaning and disinfection of hospital wards and publicly shared spaces, measurement of patients’ temperature, distribution of medical supplies to patients, delivery of food to both patients and health workers, reduction of the workload of medical staff, and minimising of contact between people so as to lower the risk of cross infection. Other examples include Belgium, Italy and South Korea, which have also turned to medtech to curb the spread of the novel coronavirus. In particular, medical robots have been deployed in hospitals and public places to distribute hand sanitiser and to ensure that face masks are properly worn. GENOMICS
It may be easy for us to get emotionally worked up as a result of the intensive gulfbusiness.com
media coverage of the current pandemic, along with the unprecedented implementation of lockdowns worldwide, and think that Covid-19 is the world’s only health challenge. But of course, medical professionals are also silently fighting battles against other deadly diseases, and it is vital not to lose sight of that fact. In particular, cell and gene therapies have increasingly emerged as a promising treatment option for a myriad of complex clinical conditions. These may include genetic disorders that arise from malignant
IN CHINA, ROBOTS ARE PROVIDING SUPPORT TO FRONTLINE MEDICAL WORKERS BY AIDING THEM IN THE CLEANING AND DISINFECTION mutations in our DNA, such as cancer and sickle-cell disease, as well as non-genetically acquired diseases, such as Ebola, the human immunodeficiency virus (HIV) and the bubonic plague. EXTENDED LONGEVITY
The growing prevalence of chronic diseases associated with the increasing share of the greying population will have profound implications for the healthcare systems for decades to come. It is therefore in this context that assistive technologies that enable healthcare professionals to
continuously monitor the health conditions of the elderly should become even more important in the future. Older patients can benefit in a number of ways from the progressive uptake of digital-health technologies. Not only can healthcare specialists help ageing individuals reduce the likelihood of contracting more severe forms of chronic diseases through the early detection of health abnormalities, but hospital admissions can also be avoided, thereby relieving pressure from healthcare systems and keeping a lid on burgeoning medical costs. Thanks to digital-health technologies, data related to patients’ blood oxygen saturation, heart rate and blood pressure can be measured via remote monitoring tools such as wearables and transmitted from the comfort of the patients’ homes to their physicians in real time. In other words, senior citizens no longer have to undertake long journeys to see their medical providers or endure long queues and big crowds at clinics and hospitals for simple medical examinations, especially in countries where geographical constraints, public transport and healthcare systems pose additional challenges. THE ROAD AHEAD
The future of healthcare will be shaped by favourable structural trends and developments in the industry. In particular, areas that are related to digital health, genomics and extended longevity should see further upside potential over the longer term, given the political tailwinds, momentous demographic forces around the world, the rise of chronic diseases associated with ageing, as well as the growing financial burden of medical care. October 2020 17
The Brief / Infographics
Business savvy GCC countries have implemented regulatory reforms to offer a conducive environment to attract new businesses and facilitate economic growth
How easy is it to do business in the Gulf? The GCC countries’ scores in the ease of doing business index mostly show an improvement in 2020 when compared to five years ago Saudi Arabia
Bahrain
Kuwait
Qatar
UAE
Oman 100
Score 2020
16 22
43
Global ranking 2020 49
Score 2015 Global ranking 2015
70
62
53
71.6
76
69
50
83 86
63.1
70
67.4
77
76.8
80.9
68.7
68 66
75
70
66.4
50
25
0
Top 10 globally The countries where it is the easiest to set up a business 86.8
86.2
85.3
85.3
84
84
83.7
83.5
82.6
82
5. Korea
6. US
7. Georgia
8. UK
9. Norway
10. Sweden
50
1. New Zealand
18 October 2020
2. Singapore
3. Hong Kong
4. Denmark
gulfbusiness.com
Improving facilities The 10 economies that have made the most reforms across three or more areas between 2018 and 2019 REFORMS MAKING IT EASIER TO DO BUSINESS ECONOMY
RANK
CHANGE IN DB SCORE
STARTING A BUSINESS
✓
Saudi Arabia
62
7.7
Jordan
75
7.6
DEALING WITH GETTING REGISTERING CONSTRUCTION ELECTRICITY PROPERTY PERMITS
✓
✓
97
7.0
Bahrain
43
5.9
Tajikistan
106
5.7
✓
Pakistan
108
5.6
✓
✓
✓
✓
Kuwait
83
4.7
✓
✓
✓
✓
China
31
4.0
✓
✓
✓
India
63
3.5
✓
✓
Nigeria
131
3.4
✓
✓
✓
Economies in MENA and SubSaharan Africa offer the longest paid annual leave Average paid annual leave (working days) 20
Middle East & North Africa
Sub-Saharan Africa
✓
✓
25
✓
✓
✓
✓
✓
✓
✓
✓
PAYING TAXES
TRADING ACROSS BORDERS
ENFORCING CONTRACTS
✓
✓
RESOLVING INSOLVENCY
✓
✓ ✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓ ✓
✓
✓
✓
✓
Flexibility counts Low- and lower-middle-income economies regulate employment the most Low income
Low middle income
Upper middle income
100 EASE OF REDUNDANCY INDEX (0–100)
Switch off
15
PROTECTING MINORITY INVESTORS
✓
Togo
10
GETTING CREDIT
OECD high income
Denmark US Somalia Uganda
High income
Slovenia
Malaysia
90
Spain
80
Belarus Nigeria
AVERAGE
AVERAGE AVERAGE
70
AVERAGE
60
Senegal
50
Central African Republic Honduras
40
Sri Lanka Indonesia
Paraguay
Equatorial Guinea 30 0
10
20
30
40
50
60
70
80
80
100
EASE OF HIRING INDEX (0–100)
Europe & Central Asia
Global average
Note: A higher index score indicates more flexible regulation, with 100 being the highest possible score.
Lowering fees Economies in the MENA region have siginificantly lowered capital requirements for businesses Average paid-in minimum capital requirement (% of income per capita)
500
Middle East & North Africa
South Asia
400
South Asia Sub-Saharan Africa Europe & Central Asia
300
East Asia & Pacific
Latin America & Caribbean
OECD high income
200
East Asia & Pacific
Latin America & Caribbean
100
0 2004
2006
2008
2010
2012
2014
2016
2018
2020
SOURCE: THE WORLD BANK DOING BUSINESS 2020 STUDY
gulfbusiness.com
October 2020 19
The Brief / Lightbox
The Emirati, Israeli and US flags are pictured attached to an airplane of Israel’s El Al, which landed at the Abu Dhabi airport in the first-ever commercial flight from Israel to the UAE on August 31, 2020. The UAE and Bahrain signed the historic Abraham Accords to normalise ties with Israel on September 15 in the US 20 October 2020
gulfbusiness.com
gulfbusiness.com
October 2020 21
PHOTO: KARIM SAHIB/AFP VIA GETTY IMAGES
COVER STORY / ORACLE
THE CLOUD AT YOUR DOOR BY AARTI NAGRAJ AND DAVID NDICHU
As Oracle opens its new cloud region in Dubai, expanding its presence in the region, the company’s regional head explains why the cloud plays a key role in the current crisis with the move towards digital transformation accelerating at an unprecedented pace
22 October 2020
gulfbusiness.com
PHOTO: GETTY IMAGES
COVER STORY / ORACLE
Digital transformation has been a buzzword in the GCC for some years now. And while most regional governments have been walking the talk, the pandemic this year has hastened the need for technological deployment across the board – for public and private sector entities.
W
ith data emerging as the most valuable commodity in this new digitally driven economy, the need for secure cloud infrastructure has escalated. There has been an explosion in public cloud spending across the GCC with the cloud now one of the fastest-growing segments within IT, expanding at a compound annual growth rate (CAGR) of over 25 per cent, according to data from tech consultancy IDC. The research firm predicts that by 2025, cloud spending by public and private organisations is going to reach $2.5bn. Behind this momentum is the fact that the cloud is even more relevant today than it ever was. “This increased adoption is driven by an urgency in many organisations in both the public and private sectors to rationalise their spending. There’s a widespread need to shift from CAPEX (capital expenditure) spending to OPEX (operating expenditure), as well as a need to drive even more digital initiatives within the organisation. And this has become even more pronounced during the current pandemic,” explains Jyoti Lalchandani, group vice president and regional MD, Middle East, Turkey and Africa, at IDC. “Through the current disruption, there’s a greater focus for organisations to move some of their initiatives to digital, and this is happening across industries, from the public sector to banks and financial services, retail, e-commerce and digital commerce, and others.” In fact, the cloud may have reached an inflection point, especially in the last few months where the market environment has changed dramatically. “We think almost 40 to 50 per cent of products are going to be digitally delivered, or digitally created,” says Lalchandani. It is clear organisations need to do things differently compared to the last few years to keep up with changing demands. 24 October 2020
“Organisations everywhere are rebuilding and recovering from this current disruption by re-configuring their supply chains, moving customer and employee engagements to a virtual world and closing their financial books remotely,” says Abdul Rahman Al Thehaiban, senior vice president – Technology, MEA and CEE at Oracle. The pandemic is applying tremendous pressure on IT teams and business units to transform the way they deliver products and customer experience. Recent research in the second and early parts of the third quarter has revealed that the cloud has emerged as a crucial business enabler during the pandemic. According to a survey by IDC, 43 per cent of the GCC CIOs said they planned to spend more on public cloud software (SaaS) than they had originally planned pre-Covid. Another 32 per cent said they will spend more on infrastructure as a service (IaaS) than they had earlier planned. “During any upheaval, it is critical to partner with a technology provider that can guarantee an ‘always on’ service. Oracle is well poised to be that partner for organisations in the Middle East,” states Al Thehaiban. He cites the example of global video communications company Zoom, which saw usage spike dramatically during lockdowns earlier this year, when remote working and online learning became the norm across the globe. The use of Zoom’s software grew 30-fold in April, spiking to reach up to 300 million daily meeting participants at its peak. Zoom deployed Oracle Cloud to manage the situation and “within hours, Oracle Cloud infrastructure supported hundreds of thousands of concurrent Zoom meeting participants”. In the region, Saudi Arabia’s Ministry of Health created a chatbot to respond to all Covid-19 queries, which was hosted on Oracle Cloud. The monthly usage for the MoH bot is more than a million gulfbusiness.com
“ORGANISATIONS EVERYWHERE ARE REBUILDING AND RECOVERING FROM THIS CURRENT DISRUPTION BY RE-CONFIGURING THEIR SUPPLY CHAINS”
PHOTO: GETTY IMAGES
Above: Abdul Rahman Al Thehaiban, senior vice president – Technology, MEA and CEE at Oracle
Right: Oracle’s HQ in California
hits a month. Also in the kingdom, Taibah University, one of the country’s largest educational institutions – which runs on Oracle Cloud, was able to offer an online learning platform to more than 70,000 students during the lockdown. “Covid-19 won’t be the last of the disruptions that businesses must contend with. It’s important for them to re-evaluate and rebuild their business models to be more resilient. Yet resilience is no longer about having the cash reserves and resources to weather disruption right now – it’s about building an infrastructure that is flexible, cloud-based and automated to deal with constant, unrelenting change,” explains Al Thehaiban. “Enterprise resilience comes in two parts. It’s about having the foresight to identify areas of risk and causes of disruption. But it’s also about having the agility to quickly transform operations to adapt to what’s coming down the track. The mantra is ‘expect the unexpected, respond and adapt’. “The paradox of a resilient organisation is that it needs to be both flexible and firm under pressure. That’s at all levels – including the people and systems that make up the company. To accomplish this, companies need an empowered workforce supported by a flexible and integrated infrastructure – leveraging the cloud, big data, automation, AI and machine learning,” he adds.
Cloud calling
To further support regional organisations in their digital transformation strategies and leverage the increased need for cloud, Oracle this month announced the opening of the first of two planned secondgeneration cloud regions in the UAE. The addition of the Dubai cloud region is part of Oracle’s aggressive plan to have 36 cloud regions by gulfbusiness.com
July 2021. The new centre will offer all Oracle Cloud services, including Oracle Autonomous Database and other applications. “The UAE’s Fourth Industrial Revolution strategy, the appointment of a federal minister to further the adoption of artificial intelligence, and the setting up of an entity like Smart Dubai, which focuses on leveraging latest digital technologies to deliver an excellent experience to citizens, residents and visitors, are clear indicators of the development of a national infrastructure for thriving in the digital economy,” says Al Thehaiban. The contribution of the digital economy to the UAE’s GDP stood at 4.3 per cent in 2019, with the country aiming to double the figure by enhancing its digital readiness. “Oracle’s second-generation cloud region in Dubai will help accelerate the digital transformation initiatives of organisations across the UAE government entities, large enterprise and SMEs, thus directly supporting the country’s economic vision,” he adds. Locally-based cloud data centres allow customers to access the full range of public cloud for IaaS, PaaS and SaaS while also addressing some of the challenges associated with public cloud such as latency and data residency requirements. The latter is a legal requirement in some of the more regulated sectors like government and financial services. From a strategic standpoint, the development addresses the proven demand for public cloud capabilities, regardless of the deployment model. Further, Oracle’s expansion in the region will make the cloud market more competitive, giving organisations more options. “This investment is great news for Oracle customers but will also help drive the overall public cloud market,” says IDC’s Lalchandani. October 2020 25
COVER STORY / ORACLE
According to IDC research, nearly 40 per cent of the core IT spending within an organisation will be related to the cloud by 2022. And that ratio is going to increase to almost 80 per cent by 2028. “The question for many organisations now is not ‘why cloud’, but ‘why not cloud,” says Lalchandani. “The investments in the region by Oracle and other hyperscalers is great news for customers, because they can then tap into these investments and infrastructure and to make a business case for their organisation,” he adds. Oracle, whose regional clients include companies such as DP World, Damac and Abu Dhabi Customs, is also confident that its investments in the GCC will pay off. “Our planned cloud infrastructure footprint for the region, including two cloud regions in the UAE, and two in Saudi Arabia, is a direct response to the rapid adoption of Oracle Cloud in the region. Based on our deep knowledge of the market and backed up with our historical presence in the region, it gives us great confidence in the investments we have made in the region. We will see existing Oracle customers move their workloads on to the cloud and out of that, part will be hybrid cloud, cloud at customer and dedicated cloud at region, with new workloads also coming on to the cloud,” elaborates Al Thehaiban.
“For example, keeping operating systems patched and secure is another one of the biggest operational challenges that IT organIDC forecasts more spending isations can face. With Oracle autonomous on digital transformation in Linux in Oracle Cloud, you can minimise the UAE the availability and security risks that stem from missed or incorrectly applied patches by using more automation like auto scaling, lifecycle management across pools, and monitoring. Oracle Cloud also uses customer 57% isolation, data encryption, high availability, of companies in the UAE are and a zero-trust architecture (which verifies accelerating digital anything and everything trying to connect to transformation its systems before granting access) to protect data and prevent breaches.” For those organisations that don’t want to migrate their data outside their firewall, due to whichever internal requirements they *IDC Q2 survey of UAE have on data sovereignty, Oracle even offers CIOs from mid and large organisations the ‘Cloud at Customer’ service where essentially, they build a cloud infrastructure at the FUNDING THE CLOUD client’s data centre. Spending on public cloud in the Another challenge is one of costs. While UAE to grow at a CAGR of 25% savings are often cited as an important reason between 2019-2024. for companies to migrate some or all of their on-premise IT infrastructure to the cloud, pricing and cost structures can create hur$1bn dles. A recent IDG survey of more than 530 $430m IT and business decision-makers conducted on behalf of Oracle found that 40 per cent 2020 2024 of respondents identified controlling costs as their top public cloud challenge. “That’s why we worked to address the economic as well as functional demands when we designed our Confidence in the public cloud is growing in the region. Lalchancloud. Oracle Cloud is architected to minimise variable and harddani says that in the last few quarters, a lot of organisations have to-predict costs, deliver consistent pricing across regions, provide moved their mission-critical applications and workloads on to the service and billing flexibility, and offer industry-leading price/ public cloud, overcoming traditional anxiety. “These large-scale performance and business value,” insists Al Thehaiban, adding investments being made by hyperscalers and other application that these services help Oracle Cloud provide customers with price providers like Oracle are boosting the level of confidence in organiadvantages of “up to 65 per cent or more”. sations to move some of their mission-critical solutions onto the public platform,” he says. There are some who still prefer a hybrid cloud model where certain workloads are shifted to the public cloud and others remain Looking ahead, organisations need to rethink the way they levon their private cloud. “Concerns over connectivity, security and erage technologies, especially emerging technologies like AI and management in multi-cloud and hybrid environments will not blockchain. In that context, cloud becomes a very important derail the general public cloud momentum,” he opines. consideration, because it allows organisations to build more operAdds Al Thehaiban: “Businesses realise that using cloud can ationally-efficient infrastructures with the agility to scale up or help them drive higher ROI, save costs, find new revenue streams, scale down, observes Lalchandani. “I think this will be an excitdeliver exceptional customer experience, retain the best talent, ing story for Oracle because some of the AI, machine learning and stay ahead of the competition. Most importantly, the cloud and automation features are going to become critically important provides an unprecedented platform for innovation while also for organisations as they modernise their applications,” he says. delivering robust security.” Al Thehaiban emphasises that the role of the company remains In the past, security was one of the main concerns that hindered clear, especially in the current situation. “Oracle has been in business the move to the cloud. However, Al Thehaiban stresses that such for decades doing the mission-critical work that keeps businesses worries no longer hold merit. “Oracle’s second-generation cloud and organisations around the world up and running. Ensuring busiinfrastructure was conceived and architected with security as a ness continuity for our customers is always a top priority for Oracle, primary design principle – even before the recent sudden move to and now more than ever, we are focused on helping our customers remote work complicated cloud security even further,” he explains. quickly respond to the unique demands they may be facing.”
In demand
In safe hands
Long-term view
26 October 2020
gulfbusiness.com
A NEW AGENCY CONNECTING WORLD-CLASS TALENT WITH BRANDS
FEATURES / STARTUPS
INVEST IN THE FOUNDER, NOT THE COMPANY In an exclusive interview, regional venture capitalist Noor Sweid outlines how the startup ecosystem has coped with the pandemic and reveals her plans for the future Aarti Nagraj
W
ith 2020 being defined by the Covid-19 pandemic, the impact of the virus on the regional startup sector has been mixed. On one hand, the number of investment deals for MENA-based startups were down 8 per cent year-on-year in the first half of the year (with March and April seeing the biggest drops of 66 per cent and 35 per cent respectively), according to a report by startup data platform Magnitt. On the other hand, there was a 35 per cent increase in total funding in H1 2020, with MENA-based startups raising $659m between January to June – standing at 95 per cent of the full-year 2019 funding. This was largely attributed to a few startups raising sizable funding rounds, such as Kitopi ($60m) and Vezeeta ($40m), before the Covid-19 outbreak, as well as high-profile funding rounds during the pandemic, such as EMPG ($150m) and Jahez ($36.5m), the report stated. On a ground level, in reality, the pandemic has been the first-ever crisis experience for many startups in the region. “Covid forced a lot of startups to pivot and kind of really think about being sustainable – not that startups don’t want to be sustainable – but that became a priority. The other thing that it’s done for startups is made them more creative in a way and more focused,” explains Noor Sweid, partner and founder of Dubai-based venture capital firm Global Ventures. “And what it has done for VCs [venture capitalists], in my opinion, is that it has kind of reinforced that we back founders, not companies, because founders
28 October 2020
Tips for startups to deal with crises 1. Leverage your resources and assets 2. Pivot quickly 3. Look around and seek the biggest problems that you can solve
are able to pivot and create value, even if their company no longer exists the way it was designed. What Covid has showed us is that an idea that’s relevant today may not be relevant tomorrow, but a founder that knows how to innovate and pivot will know to do that even if the idea has changed.” Recognising that many founders will need support to get through this tough phase, Global Ventures embarked on a unique mentoring journey for all the startups in its portfolio. “We’re fortunate that my partner and I were running very large companies in the last crisis. [So we looked at] what were the key things that we struggled with and what do we believe the key things founders are struggling with and set up the founders’ series – which had 14 calls in the end – which started in March. It was held every Sunday from 6-7pm and we had all our founders on the call, some of our investors and industry specialists,” she explains. The calls gulfbusiness.com
ILLUSTRATION: GETTY IMAGES/MALTE MUELLER
FEATURES / STARTUPS
involved 15-minute presentations or lectures, followed by 45 minutes of Q&A and they covered topics ranging from ‘how do you downsize but maintain culture’ to ‘how do you leverage the assets you’ve built into a new business model’. “Nobody ever knows what they don’t know. So we said let’s start by coaching them through the things that we believe could be helpful to them,” says Sweid. The move appears to have paid off. Sweid confirms that more than three quarters of their companies saw stronger revenues in September as compared to February. “These founders now know what they’re doing and they’ve all successfully come out on the other side. And we’re in a strong place,” she adds. Global Ventures, which recently invested in Egyptian digital payment provider Paymob as part of a $3.5m funding round, currently has 16 companies in its portfolio including e-commerce site Mumzworld, UAE-based online staffing platform Ogram, fintech firm Mamo Pay and foodtech startup Kitopi. In May, the company also led a $10m series-A funding round in Nigerian health tech startup Helium Health, which plans to use the amount to expand across Africa this year. “Our focus going forward is digital health. We’re very excited about the solutions that have been inspired by this pandemic to really improve healthcare and inclusion across emerging markets. And we’re super excited to do that. We’re also looking at agritech, education technology, robotics and the future of work. “And at the same time what we’re also focused on is companies that have at least $1m in revenue – sometimes $2m or more – and are keen either on growing globally or on a regional basis,” explains Sweid. Global Ventures, which was founded in 2018, held talks with 1,400 startups last year and expects “a little bit higher, but about similar” numbers this year. The company invests in about five to 10 companies a year, with the amount varying from $1m - $4m on average. Importantly, when deciding on a startup, Sweid says they seek those that are “solving a real problem”. Regionally, Sweid says funding remains a challenge for startups, although there have been some positive gulfbusiness.com
changes in the last few years. “The data is improving, but it’s still a big challenge. The region invests around 0.03 per cent of its GDP into venture capital, whereas globally it stands at about 2 per cent. So we’re still under-funded in the venture capital ecosystem.” But with major sovereign funds in the region – including those in Saudi Arabia – now actively backing the startups ecosystem – especially in the tech space, changes are coming about, she adds. Looking to the future, Sweid is extremely enthusiastic about the regional startup ecosystem. “I think it’s really exciting. We’re seeing a lot of innovation, a lot of success stories. Whereas before, it was very much focused on consumer technology, I think that’s expanded to enterprise tech and a few other very important sectors. I’m very optimistic about the future of the region and technology.” Opposite page: Noor Sweid
October 2020 29
PARTNER CONTENT
The future of payments is here As the adoption of contactless payments booms, Mastercard is looking to collaborate and promote the cause of financial inclusion in the region
T
he current pandemic has dramatiexperience. While there have been rumours cally altered the way industries and that fraudsters can easily electronically pickindividuals operate, with an evident pocket your contactless card, these fears are trend visible in the area of paylargely unfounded,” he says. ments. Contactless payments were already “Since we introduced contactless more on the rise across the world, including in this than 15 years ago, ‘security by design’ has region – a study by Mastercard found that in remained central to our development of the 2019, the Middle East and Africa region saw technology. This, coupled with our multiover 200 per cent growth in contactless layered approach to security, go above and transactions. The pandemic has given further beyond in protecting cardholders. The payfillip to contactless payments. ments industry is constantly innovating and While this region has traditionally been a we’re at the heart of securing this innovation cash-driven society, physical cash is con– applying protection beyond cards as the sidered inconvenient and expensive – and payments industry continues to evolve into during the current crisis, also potentially mobile and wearables,” Elgibali adds. poses a health risk. “The Covid-19 pandemic The numbers are now rapidly adding up has rapidly accelerated the evolution of conin support of contactless payments: Mastertactless payments and the rate of adoption card’s data for March 2020 found over 100 we’ve experienced in 2020 has been faster per cent year-on-year growth in the UAE, than ever imagined. Public health and hygiene while contactless transactions in Saudi Arabia is the driving force behind this as consumgrew three times as fast as non-contactless ers look for cleaner and safer ways to pay in transactions. the midst of the current global pandemic,” At present, almost one in nine Masterexplains Khalid Elgibali, MENA division presicard transactions at point-of-sale terminals dent at Mastercard. in MEA is contactless.. In a consumer study “While the consumer demand for faster, conducted by Mastercard this year, eight more convenient, safe, and now cleaner way in 10 respondents in MEA also said they will to pay has driven the transition to contactless, it is our responsibility to ensure these transactions are more secure than ever before.” When it comes to security, many of the concerns that exist are largely baseless, he states. “Contactless cards are designed to meet all the essential security requirements that often worry us – from protecting against fraud, to maintaining consumer privacy, and Almost one in nine Mastercard transactions at pointof-sale terminals in MEA are contactless offering a good cardholder
continue using contactless payments postpandemic, pointing to a long-term shift in behaviour.
INNOVATION AND EXPANSION With growing adoption of contactless solutions in the market, Mastercard has been seeking to offer more solutions to users. Last month, it teamed up with Emirates Digital Wallet (EDW) and UAE lenders First Abu Dhabi Bank, Mashreq Bank and National Bank of Fujairah to launch a new digital cash platform, klip. Klip is accessed through a mobile app available from any of the partner banks or direct from EDW. Users can either link their klip account to their bank account or load cash directly onto it and use the app to pay for goods or services, to send and receive money, and to store money for when they need it. They can also obtain cash from ATMs by accessing funds stored on their digital wallet. “Eliminating physical cash will result in huge savings for businesses and allow smaller businesses to flourish,” explained Mohammed Al Jayyash, chairman of EDW. The new platform is aimed at bolstering the UAE’s cashless ecosystem and promoting financial inclusion. “Growing the domestic payment ecosystem is crucial for the development of a robust digital economy that positively impacts communities,” stated Elgibali. Mastercard is also looking to enhance its capabilities through acquisitions. It acquired real-time payments provider Vocalink in 2017, which is currently operational across the world, including in Saudi Arabia, the UK, Singapore and Thailand. Using Vocalink, Mastercard also partnered with Saudi Payments, a fully-owned subsidiary of the Saudi Arabian Monetary Authority (SAMA), to launch real-time payments that enable account-to-account
“The Covid-19 pandemic has rapidly accelerated the evolution of contactless payments and the rate of adoption we’ve experienced in 2020 has been faster than ever imagined” A SUSTAINABLE APPROACH
payments between financial institutions, businesses and consumers. Mastercard has also acquired Transfast, a global cross-border payments network provider, and Nets Corporate Services, which allows consumers to get a payment platform for recurring bill and credit transfer transactions. The company has also been investing in open banking – which gives people and businesses more control over their financial data, including determining how and where third parties can access their information to provide new financial services. Mastercard recently entered into an agreement to acquire Finicity, a US-based provider of real-time access to financial data and insights.
Khalid Elgibali, MENA division president at Mastercard
100%
Year-on-year growth in the UAE in contactless payments, according to Mastercard’s data for March 2020
Along with innovation on the business front, Mastercard has also been partnering with several entities to promote inclusive and sustainable urban development as part of its City Possible initiative. In Dubai, for instance, it has joined hands with the Roads and Transport Authority (RTA) to enable frictionless, faster and more secure public transport tariff payments for commuters. In September, Mastercard also collaborated with HSBC Bank under City Possible to accelerate sustainable urban development worldwide. As part of the partnership, Mastercard and HSBC will develop an approach to green financing around sustainable infrastructure projects in net zero cities across the globe. “This is about doing what we can right now to set people up for success in the long run,” said Ajay Banga, CEO at Mastercard. “When cities are built to help people thrive, the world thrives. We have to see the bigger sustainability picture and work towards it – with the public and private sectors working together to enable innovation, extend supply chain reach and open access to capital.” Regionally, Mastercard also recently introduced a low-cost payments solution called ‘SME in a box’ to enable small business owners to move their operations online and accept digital payments from their customers using smartphone technology. Looking ahead, as the official payment technology partner of Expo 2020 – set to be held next year – Mastercard is aiming to use the power of technology to connect and inspire millions of people. With the world now moving towards a digitally connected economy where businesses and governments are united in creating solutions, Mastercard says its role is simple – to be a binding force in a world beyond cash.
FEATURES / EDUCATION
EDUCATING A GENERATION
Australia’s University of Wollongong in Dubai opens its state-of-the-art campus in Dubai Knowledge Park By Varun Godinho
I
n 1993, the University of Wollongong in Dubai (UOWD) became the first international university to enter Dubai. This year, the Australian university opened its newest facility – the sprawling ‘Campus of the Future’ in Dubai Knowledge Park. Speaking to Gulf Business, university president Professor Mohamed-Vall Mohamed Salem Zein, talks about the prospects of the country’s higher education sector, the changing model of university education and the need to focus on career opportunities for fresh graduates. How has Covid-19 disrupted the traditional university model?
I believe that Covid-19 has forced a shift that will transform how universities function, as many universities have been struggling to maintain operations without access to their students. We have seen that, with no access to international students or university campuses, blended learning has become increasingly important. Through combining online educational materials and traditional classroom-based methods, students are now able to interact and also benefit from being inside the classroom or laboratory, now that restrictions have eased slightly. With a blended learning system, have you upskilled the faculty too?
Previously, the university had offered blended learning elements alongside traditional classroom-based teaching within certain degrees, so the infrastructure and staff know-how were already in place. Using innovative approaches, [we have used] global leading education technologies to facilitate student-to-instructor, student-to-student and student-to-content interaction. With any form of distance learning, it is also extremely important to ensure that all assessments and exams conducted online follow a strict academic governance process. Although the method of education delivery has been altered, UOWD still adheres to the same standards of governance in terms of assessments to guarantee a complete alignment with regulatory bodies, and to ensure no compromise on the quality of the degree issued. UOWD has introduced new computer science degrees in cybersecurity, big data, and mobile and game development. Tell us about them as well as the advisory board that will oversee the programme?
We have introduced three computer science degree programmes for the September 2020 intake. We are currently finalising an advisory board, which will be a representative panel of industry experts from the healthcare, retail, business, telecommunications, FMCG and tourism fields. These experts will work closely with 32 October 2020
academics and students, providing connections with the industry and allowing these students to increase their engagement with working professionals. Are there any new programmes that are currently awaiting approvals?
We are waiting to receive final approvals on our Master of Business Analytics degree for the Spring 2021 semester. While designing this programme, the University of Wollongong in Australia and Dubai consulted with global analytics firm SAS. The synergies between the designed programme and technology developed by SAS would allow graduates of the programme to develop unique practical skills using SAS technology and would thus qualify them, in addition to their UOWD degrees, for a SAS Advanced Business Analytics joint certificate too. We are also exploring options for artificial intelligence, mechatronics and nursing sub-specialities qualifications. How is UOWD equipping its newest graduates with a fresh set of skills to help them become more employable in the current market conditions?
We have a very strong job placement rate, with 77 per cent of undergraduate students and 85 per cent of post-graduate students finding employment within six months of their graduation. Our team has dedicated career advisors, a career development centre and also conducts events such as our annual career fair. Internship and partnership opportunities are also available for students with Fortune 500 companies located in nearby business communities. Additionally, all degrees offered by UOWD are accredited by the Ministry of Education through the CAA, which is an important factor for future job seekers. What were some of the key objectives of opening the new campus?
Our new ‘Campus of the Future’ is a 200,000 square foot purpose-built facility, designed from the ground up for our students, which will facilitate the internationalisation of higher education with our campuses in Australia, Hong Kong and Malaysia. Featuring cutting-edge technologies, contemporary architecture, and a mix of traditional and innovative learning spaces, it will provide an enriched experience to meet the demands of today’s student population, while supporting teaching staff and community research projects. The premises will also house major laboratories dedicated to power and circuit systems, chemistry, thermodynamics, media and communications, cybersecurity and gaming, to name a few. What must educational institutions now do to encourage students to return to their campuses?
Students are actually very eager to come back to campus, in particular for the extracurricular activities. Although the current restrictions are difficult for everyone, we are optimistic that this is only a temporary situation. We have implemented a range of preventive measures on the campus that include heat gulfbusiness.com
FEATURES / EDUCATION
Inside UOWD’s new ‘Campus of the Future’
Professor Mohamed-Vall Mohamed Salem Zein, president of UOWD
scanners at the main entrances, as well as disinfection tunnels and daily sterilisation and cleaning of all classrooms. Staff and students need to show a negative Covid-19 test result on their Al Hosn app in order to enter the campus, campus, which has reduced occupancy at all times. Online lectures will remain, utilising the blended learning infrastructure, but lab work that requires the use of equipment will be done on campus. Are there any permanent changes that you predict will go into effect in the education system as a result of the pandemic?
I believe that universities will change by having a much greater adoption of new technologies and features such as blended learning with advanced teaching and learning methods. Universities will also have to adapt to the increasingly strong focus of students on their chances of securing employment after graduation. The shift in culture from the traditional university models and students’ priorities will require enhanced engagement between universities and businesses. What must Dubai do to ensure that its higher educational institutions have a distinct competitive advantage over their global counterparts?
During the current pandemic, the distinct competitive advantage over global counterparts includes continuous promotion of the safety of Dubai and the great success of alternative teaching and learning initiatives implemented by our universities, and the increased opening of borders for international students. Students consider a variety of factors when deciding on a destination to pursue their studies; safety and career opportunities are at the top of the list. It is pleasing to see that many universities in the country were able to provide domestic students who were unable to travel abroad due to pandemic-related restrictions, with excellent and viable options for their education. gulfbusiness.com
The 200,000-square-foot University of Wollongong in Dubai’s (UOWD) facility in Knowledge Park opened to students last month and includes classrooms which can accommodate up to 80 students. The standalone building also includes a large student lounge with a pool table, gaming consoles and bean bags to create an informal space for students to interact with each other. The purpose-built laboratories cater to various disciplines including chemistry, thermodynamics, manufacturing, physics, robotics, and media and communications, among others. UOWD offers 22 undergraduate degrees and 21 postgraduate degrees, with over 3,500 students from 108 nationalities currently enrolled. UOWD is not only accredited by the Australian government, but also locally by the Commission for Academic Accreditation (CAA) of the UAE Ministry of Education and Higher Education Affairs, as well as Dubai’s Knowledge and Human Development Authority (KHDA). Ensuring that the students have access to high-quality learning, each of the professors at UOWD possess a minimum of a PhD in the subject they are teaching. This year, UOWD has introduced three new Bachelor of Computer Science degree programmes that will now be available to students: cybersecurity, big data, and game and mobile development. The university also introduced a new flagship Masters’ degree – Global Executive Master in Luxury Management (GEMLux) programme with an advisory board that includes the likes of Daimler Middle East (Mercedes-Benz), Ahmed Seddiqi & Sons and the Chalhoub Group. To aid in its blended learning model, every classroom and auditorium has cameras installed so that students who choose to learn from home will have access to the same coursework and lectures as those studying on campus. UOWD has also instituted a unique ‘pathways programme’ that has responded to the needs of students stranded in the UAE and unable to travel to universities outside of the country. Students are permitted to enrol for between one to two years at Wollongong’s Dubai campus and then transition to any one of its three global campuses in Hong Kong, Malaysia or Australia.
October 2020 33
BRAND VIEW
Phi Trends: Cloud computing and big data - the way forward Rising global digitisation due to the pandemic has been a catalyst for companies in the cloud computing and data analytics space, opines entrepreneur and investor Shailesh Dash, who shares his market perspective in this monthly column
T
he world has experienced one of also being used to forecast potential limitasegment. Meanwhile, Microsoft’s large expoits most significant crises in recent tions in hospital capacity and resources. sure to key cloud businesses themed on digital times, courtesy of Covid-19. NotThe retail sector is witnessing a similar engagement, remote work and workflow withstanding the health impact, the trend, particularly for companies that have planning, has helped it to address a sizeable pandemic has provoked a massive disruption effectively shifted to an online model, and market that is expected to grow to $460bn by to global economic activity, supply chains and have leveraged big data analytics to better 2025. Microsoft is expected to achieve doubusinesses. Resulting efforts to ensure surunderstand and predict consumer behaviour. ble-digit annual revenue growth in this period. vival and revive business activity have largely Meanwhile, financial firms are increasingly Notably, the current global cloud infrastrucaccelerated the digitisation of the global econusing AI-powered tools to enhance digital ture services market is far from tapped out, omy, even as governments, corporates and transactional models such as advisory robots and is expected to witness massive growth in businesses increasingly turn to technological and improve the overall banking experience. coming years, with projections estimating its advancements for sustainable growth. ConConstant evolution in these tools is leading growth at 18 per cent CAGR to reach roughly sequently, big data, IoT, cloud computing, and to data-driven decisions becoming a main$167bn by 2024, from $73bn in 2019. other technologies are witnessing growing stream solution, setting new standards in Global equity markets are echoing similar prominence as the end-to-end connections technological prowess. optimistic sentiments, with unprecedented that they provide across data points via uniAmid this landscape, tech giants such as price surges witnessed in technology stocks versal networks are paving the way for infinite Amazon, Microsoft, and Alphabet are growsince the start of 2020, despite the steep global wealth pools of data to be shared seamlessly ing at a commendable pace. Despite their size, recession due to the pandemic. Software-as-aacross borders. Cloud computing and data these companies have demonstrated potenservice (SaaS) stocks, which were witnessing analytics technology have driven innovation tial for further growth due to their aptitude to a rallying much before the pandemic, have across industry verticals, from e-commerce endure and emerge stronger from economic seen an unprecedented surge since March and finance to education and healthcare, storms. For instance, Amazon’s stock is up while cloud computing stocks have also been enabling companies to adapt their business almost 83 per cent since the start of 2020 major gainers of this rally. Despite the sharp models to the new normal wherein travel as its cloud computing company, Amazon surge in technology stocks, some of them restrictions limit physical connectivity. Web Services (AWS), which remains its most are still perceived to be undervalued and Rising global digitisation has also been profitable segment, witnessed a 29 per cent present attractive prospects in the current a catalyst for companies in the cloud comsurge in Q2 2020 sales to reach $10.8bn, market. Hence, the correction in tech stocks puting and data analytics space, as fresh significantly overshadowing its e-commerce in recent weeks should offer an opportunity avenues provide new growth opportunities. Performance of tech stocks For instance, several healthcare providCompany Market Cap Revenue EPS EV/ EV/ PB Stock Price 52-Week ers and policymakers Name (USD bn)* (USD mn) (USD) Sales* EBITDA Ratio* (USD)* High Low are turning to big data Alteryx Inc. 7.23 464.91 -0.40 15.57 637.57 17.65 110.81 185.75 75.17 analytics models to achieve enhanced Splunk Inc. 29.98 2,343.25 -4.14 13.03 -65.69 17.96 185.35 225.89 93.92 care d e l i v e r y, The Trade Desk Inc. 19.57 680.16 2.47 28.51 203.68 25.81 445.30 515.20 136.00 resource allocation Coupa Software Inc. 17.49 458.37 -1.66 38.48 -1.16 40.96 252.28 353.55 99.01 and preventive health measures, espeAtlassian Corporation Plc 41.48 1,614.17 -1.43 25.08 -203.20 72.10 171.02 199.50 107.00 cially in light of the pandemic. Big data *Note: Data as of September 15, 2020 SOURCE: SOURCE: YAHOO FINANCE, BLOOMBERG analytics tools are
Shailesh Dash
to accumulate them for a long-term portfolio, given their robust fundamentals, business resilience and futuristic growth prospects. For instance, Alteryx, a data science and analytics firm, displayed consistent performance in the last three years, with its stock climbing roughly 471 per cent during this period. However, slowing growth in Q2 drove the stock lower despite the company beating estimates for the quarter, suggesting that the recent sell-off could prove to be a sharp bargain as the company exploits the growing global opportunity within analytics. Similarly, Splunk, a major player in the global data analytics space, is also growing at a commendable pace, with its stock up 45 per cent YTD. The company enables firms to analyse and interact with machine-generated big data, and is now evolving to a subscription model that would drive recurring cash flows instead of single payments. As mixed earnings’ results have recently dragged its stock price, this provides an opportunity to capitalise on long-terms gains.
Ad-tech platform The Trade Desk (TTD) is another firm that boasts of a robust long-term performance, with a compound annual EPS growth of 35 per cent for the last three years, while its share price rallied by a whopping 615 per cent in this timeframe. TTD operates in the digital advertising market, and its cloud-based platform helps advertising buyers optimise data-driven digital advertising campaigns. While growth slowed this year, a positive
“The correction in tech stocks in recent weeks offers an opportunity to acquire them for a long-term portfolio”
outlook for H2 2020 amid strong prospects for the data-driven digital market, is likely to enable continued growth for the company. Coupa Software, a business software developer, is also emerging as a silent winner. Having risen 133 per cent in 2019, its shares have rallied another 123 per cent in 2020, due to lucrative prospects for its cloud-based procurement, invoicing, payment and financial analysis solutions, especially in the current pandemic-hit economy. Lastly, Australian software developer Atlassian Corporation PLC (TEAM) is also demonstrating potential for growth. The rising need for collaborative teams in the current landscape is boosting demand for its software development, project management, content management, and collaboration software tools. New clients and selective higher pricing led its revenues to rise 29 per cent year-on-year for the fiscal fourth quarter, surpassing estimates. Analysts further estimate revenue at $1.92bn and EPS to grow to 1.14 for the current year. The continued interest in cloud computing service businesses is most evident in the recent listing of Snowflake, which witnessed the largest IPO ever for a US software company, raising about $3.4bn in proceeds, and achieving a market capitalisation of over $33bn, more than 2.5x of its $12.4bn pre-listing valuation. The offering was 2020’s biggest, and has attracted prominent investors, due to its rapidly-growing customer base and revenues, which grew 121 per cent y-o-y in Q2 2020, over strong business prospects. Although Snowflake recorded negative profits, the massive interest in the company is proof of the surging demand for technologydriven cloud and data analytics companies. Moreover, companies operating via SaaS models for income generation will be well poised to benefit in the long term. The rising trends around collaboration and connectivity in an increasingly remote work environment will also accelerate the pace of growth in the technology space, particularly for companies that continue to innovate and use strong balance sheets to optimise costs, expand their presence and user base, and grow sustainably in the new normal.
Disclaimer: This column is purely for academic and educational purposes. Nothing mentioned here should be taken as solicitation to trade or a recommendation of a specific trade. The author has direct exposure in recommended stocks.
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FEATURES / SMARTPHONES
Next generation 5G technology adds a vital cog in a mobilecentric future already underway
BY DAVID NDICHU
SMARTPHONES:_BRIDGING THE_GAP_BETWEEN_THE PRESENT_AND_THE_FUTURE
FEATURES / SMARTPHONES
THE _ TELEPHONE _ HELPED USHER _ IN _ THE _ SECOND INDUSTRIAL _ AGE. _ THE SMARTPHONE _ WILL _ HELP DRIVE _ THE _ FOURTH _ ONE._ _ We are in the middle of the 2020 second-half phone launch cycle, which holds special significance – all major smartphone vendors will have launched 5G devices by the year’s end. The next-generation 5G technology is crucial in the realisation of the fourth industrial revolution. Technologies associated with Industry 4.0 such as interconnectivity, automation, machine learning, and real-time data will require an aggregation point – none comes close to the smartphone in bringing together capability, access, price and innovation to emerge as the interface of this brave new world.
pre-installed smart home and IoT products from the electronics firm. In neighbouring Sharjah, developer Arada announced two years ago that smart technology would be introduced into every unit within its ‘Misk Apartments’ buildings in its Aljada development. The Arada Smart Home system allows residents to use their mobile phones to access features such as remote front-door access and 24-hour video security. Residents can also adjust temperature, lighting and manage utilities, in addition to enabling motion sensors within their apartments, and controlling blinds and curtains.
ENTERPRISE APPS
TOUCHLESS BANKING
In a world where work will come to us, rather than us going to work, enterprise mobility is a growing area of focus. We are increasingly using our smartphones to access and interact with corporate (cloud) applications. For instance, the mighty CRM is now available as an app from companies like Salesforce, providing access to the same rich data as office desktops, now available in the palm of your hand. In transportation, the new generation of cars is doing away with the key fob. Now not only can you open the car with the smartphone, but vehicles with self-driving capabilities such as Tesla also allow you to summon your car from the parking lot with your mobile. Inside, Apple Car and Android Auto seamlessly connect with your smartphone bringing all your apps to the dashboard. Meanwhile, smartphone map apps have replaced standalone GPS units for the majority of people. The smart homes we have gawked at in movies are now within reach. In a not too distant future, we will use our phones to unlock our homes and once inside, use an app to set the temperature, dim the lights, start the music, etc. Earlier this year, Emaar signed an MoU with Xiaomi to launch ‘Emaar Smart Home’ – a set of digitally-enabled residential developments that come with a set of
If the number of bank branches and ATMs in your city appears to be shrinking, you are not imagining things. Mobile apps are the new banks. Take Al Salam Bank Bahrain. Even before Covid-19, the bank was “no longer even using the term ‘paperless’, but [we] were already focusing our discussions around ‘touchless’, ‘branchless’, and ‘zero-ops models,” says Rafik Nayed, group CEO, at Al Salam Bank. “Soon, no service we offer will require physical interaction. We already offered digital onboarding through our previous app but [a new] update will feature much greater new-to-market functionality,” he adds. According to a report by Zion Market Research, the global mobile wallet market is expected to reach approximately $3.1 trillion by 2022, growing at a CAGR of around 32 per cent between 2017 and 2022. The UAE mobile wallet market is projected to grow at an average of 24 per cent per year to surpass $2.3bn by 2022, the report adds. The use of mobile payments is set to become the second most common payment method after debit cards by 2022. In leisure, our entertainment has gone increasingly mobile ever since iTunes. Streaming services such as Spotify and podcasts are sounding the death knell for radio. Netflix, on the other hand, poses
38 October 2020
gulfbusiness.com
FEATURES / SMARTPHONES
an existential threat to traditional TV. In gaming, mobile is the fastest-growing segment of this pastime and has already surpassed console and PC gaming. mGovernment, the use of mobile technologies within government to deliver public services to citizens and firms, is quickly emerging as the new frontier of service delivery and making public services more accessible to citizens. In the UAE, nearly all government agencies have apps, with an increasing number of services delivered through mobile devices. In developing countries where public service delivery is dismal, mGovernment allows authorities to deliver services cheaply and much more efficiently. In today’s omnichannel world of texts, The expected chats, photos and videos, consumers global mobile increasingly want to interact with busiwallet market by nesses the same way they connect with 2022 family and friends. With the enterprise version of WhatsApp, companies can send appointment reminders, shipping alerts, order notifications, product demonstration videos, The projected verification codes, boarding passes, and UAE mobile customer support. wallet market by
$3.1 trillion $2.3bn
ILLUSTRATION: GETTY IMAGES/PM IMAGES
ONLINE SHOPPING
2022
In retail, e-commerce is fast giving way to m-commerce. Online sales through mobile are projected to double between 2018 and 2021, with m-commerce’s share of total online retail increasing to almost 75 per cent, according to research by ResearchAndMarkets. The phone camera, although still capable of taking great selfies, will be the bridge between the real world and augmented reality (AR). The AR market is projected to be worth $61.4bn by 2023, according to research firm Markets and Markets. While lag has been the biggest issue holding AR back, the lowlatency offered by 5G technology will solve this problem once and for all. Hundreds of mobile AR applications are now available on both Android and iOS for biology, astronomy, history, translation and more. The smartphone will streamline travel in a future where physical contact will become increasingly unappealing due to the risk of epidemics. A mobile solution from travel technology provider SITA – SITA Flex – enables airports and airlines to build mobile apps that allow passengers to move through the airport without physically touching bag drops, kiosks and gates. Automation is of paramount importance, says Jihad Boueri, vice president of Airports and Airlines for the Middle East, India and Africa at SITA. “Contactless, self-service technologies at every step will facilitate passenger flow, cutting queues while ensuring a social distancing-friendly passenger experience,” he says. Even the way we consume media is changing with social media revolutionising how and when we access news and information. According to Statista, mobile-first digital media surpassed traditional media sometime in 2018. User-generated content from the likes of Instagram and TikTok today is king, treasured by both audiences and advertisers with nearly the same passion. gulfbusiness.com
The Arada Smart Home system allows residents to use their phones to get front-door access, 24-hour video security, adjust temperature, lighting and manage utilities
Unlike the smartphone’s ancestor – the original Bell telephone – access to the modern smartphone and the applications it enables will be a much more democratic affair. Thanks to streamlined supply chains, standardised platforms and mass production, much of the global population has access to powerful smartphones at fairly affordable prices. In the report accompanying this feature, we look at the OPPO Reno4 Pro 5G, a device that highlights the value and technical proposition that puts the smartphone at the convergence of innovation and access. October 2020 39
PA R T N E R C O N T E N T
Capitalising on the new wave of 5G We review the all-new OPPO Reno4 Pro 5G which was launched in the UAE on September 22
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s OPPO gears up to celebrate its 16th anniversary this year, the global technology company has made major strides. Apart from internalising most of its production – reportedly over 85 per cent of OPPO products are manufactured in-house – it has also notched up over 19,300 patents while at it. Importantly, the company has committed $7bn in R&D over a three-year period starting 2019 that’s resulted in a consistent stream of releases. One of the areas where the smartphone major has excelled is its 5G technology. Europe’s very first commercially-available 5G smartphone was launched by OPPO – the Reno 5G – in 2019. Since then, it has built on its 5G advantage and launched other devices with this technology too. Here in the UAE, the OPPO Find X2 Pro 5G, launched in June 2020, offered a high-end package that was priced at nearly Dhs5,000 at the time of its launch. On September 22, OPPO launched its latest Reno4 Pro 5G – part of the new Reno4 Series – in the UAE at a retail price of Dhs2,499, around half what you’d typically pay for a 5G device with similar design and camera capabilities from a competitor. We went hands-on with the device recently, along with the new OPPO Enco W51 wireless earphones. Gripping the phone, it’s slim (7.6mm) and lightweight (172gm) with a narrow body that enables you to not only hold the phone firmly with one hand but also allows for your thumb to comfortably cover the breadth of the device. Featuring a Qualcomm Snapdragon 765G processor, it boasts a dual-mode 5G SA (Standalone Access) and 5G NSA (Non-Standalone Access). The difference between the two is that while the former is built to be compatible with dedicated 5G infrastructure, the reality is that we’re a fair bit away from seeing its ubiquitous use. Hence the advantage of the 5G NSA which uses 4G network infrastructure to provide higher speed and access to the internet. The phone’s 6.5-inch AMOLED screen curves gently along the edges and has a
Shot on OPPO The phone uses a 12MP Ultra Night Wide-angle Video Lens Ultra Night Mode Off
Ultra Night Mode On
refresh rate of 90Hz, which displays sharp distortion-free images. With a competitive price tag, the new Reno4 Pro 5G isn’t angling for the position of a business device, but rather one that is aimed at a younger audience. That brings us to the camera, where OPPO has paid significant attention to boosting its night-photography and video capabilities.
The triple cameras at the rear are arranged in a linear format. It comprises a 48MP main camera, a 12MP Ultra Night Wide-angle Video Lens – a Sony IMX708 sensor – and a 13MP telephoto lens which supports 5x hybrid optical zoom and up to 20x digital zoom. On the device, you can toggle through to the video mode where you’ll find the symbol of a crescent moon to activate the Ultra Night Mode. We tested it out in low-light conditions and the brightness of the images really did increase quite substantially. OPPO says that its camera research team in Japan spent over a year honing the Ultra Night Video algorithm used for this device that bumped up video brightness in low-light conditions by nearly 75 per cent. In those poor light conditions, a laser detection autofocus technology quickens the camera’s autofocus – reportedly by over 140 per cent over a standard camera. The Sony IMX708 ultra-wide-angle camera also allows for a panoramic shot with a wide field of vision. But alternatively, from dark nights to bright lights, the phone’s camera has another trick up its sleeve. Typically, it’s notoriously difficult to shoot a subject against a bright backdrop – for example with a windowpane in the background. But with a Live HDR mode on this new phone, another smart algorithm kicks in to separate the shadow from highlight and allows the subject in the foreground to be lit up. The Reno4 Pro 5G also features an Ultra Steady Video 3.0 that reduces blur around moving images, and this image stabilisation technology can even be used from the front 32MP camera, which is useful for video chatting while on the move. The battery life can, rightly, be a key factor for several customers when deciding which device to purchase. OPPO has particularly excelled in this area. With a proprietary 65W SuperVOOC 2.0 flash charging technology, we managed to raise the charge on our Reno4 Pro 5G from 55 per cent to 99 per cent in around 16 minutes. OPPO has also built in a safety mechanism into the device via circuit breakers at five points across the adapter, cable, phone and
Left: With the brand new “Reno Glow” processing technique, Reno4 achieves a matte finish with glittery details on the back cover which is also fingerprint resistant Top: It takes 36 minutes to completely charge the battery on the Reno4 Pro 5G
OPPO Enco W51 The Reno4 Pro 5G was launched alongside the all-new OPPO Enco W51 active noise-cancelling wireless headphones. Equipped with 7mm drivers, it is compatible with Bluetooth 5.0 technology. It did a good job of cancelling out ambient noise, with OPPO saying that it delivers up to 35db of noise-cancelling ability – compared to the average of 20 you’d find on headphones from most other manufacturers. It features a triplemicrophone setup to reduce ambient noise when taking calls. While it was the right fit straight out of the box for our ears, there are also three additional earbuds – large, small and extra small – for anyone who wants a more snug fit.
battery which will cut the supply of current should it detect any power surge. You can’t fully deal with the problem of low-battery anxiety without building a phone that doesn’t give up in the final moments of its battery life. OPPO has introduced a Super Power Saving Mode which, it says, will allow WhatsApp chats for over 1.5 hours or calls for over an hour or the ability to watch 100 short videos, take 100 selfies and text for 90 minutes – all of this when you’re down to the last 5 per cent of your battery charge. The Reno4 Pro 5G uses OPPO’s ColorOS 7.2 UI. Built-in are OPPO developed apps such as video editing tool – Soloop as well as OPPO Labs that allows you to customise ringtones. The 256GB device is shipped with 12GB of ROM, and is available in Galactic Blue and Space Black – the blue version features over a million crystal planes along the caseback that give it a high-gloss look though with a mattlike finish that doesn’t allow the caseback to become covered in fingerprints. According to Counterpoint Technology Marker Research, OPPO was the fifth-highest selling smartphone manufacturer in Q2 2020, accounting for around 9 per cent of the market. For it to further accelerate in the last two quarters, it has to roll out a greater number of 5G devices – and at a competitive mid-range price bracket, without letting these feel midlevel in specs or design. The Reno4 Pro 5G is a good start.
The Reno4 Pro 5G 256GB variant is available from Dhs2,499. The OPPO Enco W51 headphones can be purchased independently for Dhs499.
FEATURES / ESPORTS
Breaking down barriers for
MOBILE ESPORTS TO THRIVE
The mobile platform offers the GCC a chance to catch up with more established regions of Asia, Europe and North America in esports development David Ndichu
S
42 October 2020
regulations and investment in infrastructure can achieve,” says Ryder. In Saudi Arabia, the Saudi Arabian Federation for Electronic and Intellectual Sports (SAFEIS) has published some draft guidelines on the development of the sector. Vase says the region has plenty of models from more mature markets to learn from. “The regional sector can develop in a better way by learning from the experience of ease of access to smartphones but also by the sheer advances in the quality of mobile games in a relatively short time. But for mobile esports, and esports in general to grow in the region will require extra efforts from all stakeholders. Kondrat says localisation of games is crucial. “FIFA is a good example where publisher EA Sports invested in arabisation early on and that’s probably why the FIFA franchise is so popular in the region. Ubisoft has done the same with Rainbow 6 and that also explains their consistency in the region,” Kondrat explains. GOVERNMENT SUPPORT
There is a real potential for esports in the region if the various governments were to engage with the community and roll out specific esports regulations and legislation, says Ryder. These rules should make clear how esports is governed, how to host competitions, etc. “South Korea offers a great example of what government backing, clear rules and
others,” he adds. Mobile esports is starting to attract corporate money, crucial for the growth of the sector. Cooke gives the example of PUBG Mobile, which recently announced a $2m league. “As these games and the ecosystem develops, you can expect money to follow, particularly from corporate sponsors,” he says. The one challenge mobile esports faces that other esports platforms do not is ‘converting people from players into payers’, says Ryder. “The perception from the public is that games should be free because they are on mobile. A major mindshift in the population is required to eliminate that barrier between mobile on one hand and PCs and consoles on the other,” Ryder says. More universities in the region should consider adding gaming majors in their curriculum. “The strengthening of the relationship between the education sector and esports is vital for teams to discover talent and for young people to develop their gaming skills,” he says. gulfbusiness.com
PHOTO: UNSPLASH
ince mobile esports is relatively new, the starting point is more or less even globally. “If the skill level in the region is good enough, regional teams should be able to compete with any other team in the world,” says Lalit Vase, club director at Nasr eSports, a Dubaibased esports club. This contrasts with established PC games like Counter-Strike, where European-based esports have been competing at a competitive level for at least 10 years. Nasr eSports only set up a Counter-Strike team three years ago. Teams in Europe therefore would have a clear advantage in terms of coaches available, the number of players, etc, Vase observes. Mobile competitive gaming in the region still has some way to go, insiders agree. Most of the esports titles that have consistent participation in the region are all PC titles such as League of Legends, states Edward Kondrat, esports executive at Empire Entertainment. But the general mobile gaming scene in the region is booming. Pandemic-imposed lockdowns led to a massive increase in mobile game downloads. “Whether that translates into comparable momentum for mobile esports remains to be seen,” Kondrat says. Further, the huge mobile penetration rates in the Middle East, which hover well over 100 per cent, provides a potentially massive pool of gamers, both at the amateur and pro-level, observes Jamie Ryder, partner at DLA Piper Middle East, an international law firm with offices in the region. Sam Cooke, managing director and cofounder, Esports Insider, says the growth on mobile esports is driven not just by the
PARTNER CONTENT
Why gamers will love the new OPPO Reno4 Pro 5G Gamers are a demanding lot - but then the OPPO Reno4 Pro 5G is one formidable smartphone
U
nlike the gaming PC or console, the smartphone is, well, more intimate. That means what is outside is almost as important as what is inside. And what is outside the OPPO Reno4 Pro 5G is a slim industrial design built on a new processing technique called ‘Reno Glow’. On the back of the device are more than a million crystal panes that shine like tiny diamonds, giving the phone an air of refinement that belies its mid-range mooring. Games can run for hours, so a comfortable grip is more than a trivial item on a checklist – the Reno4 Pro 5G weighs just 172g and is 7.6mm thin, making those long spells hunting down zombies a less draining pursuit.
The Reno4 Pro 5G weighs just 172g and is 7.6mm thin, making it perfect for gamers.
Just enough time to stretch your legs. But if you must go back to the game quickly, the SuperVOOC 2.0 gets you to 48 per cent of the charge in a mere 10 minutes.
images more fluid and less straining to the eyes. This feature would be merely charming for the average user but for a gamer in a fast-paced, action-packed environment, the superior graphics do provide a real edge. The refresh rate (measured in Hertz {Hz}), counts the number of times the display updates every second it is on. Faster update times also mean lower latency, because the pixels are being refreshed more often. The Reno4 Pro 5G refreshes 90 times per second, ideal for gaming performance where a millisecond lag is the difference between getting slain and living to fight another day.
Most smartphone speakers seem like an afterthought, with the belief that the average user will have their earphones plugged in. OPPO makes no such assumptions; the Reno4 Pro 5G is equipped with two super linear stereo speakers. The lower speaker’s sound cavity is filled with bass materials and as a result, the Reno4 Pro 5G speaker can create bass effects you would hardly expect from a smartphone. When gaming, every scene comes to life with immersive, surround-sound audio that synchronizes with all gaming action on-screen. A secondary effect of speaker construction is the prized tactile sensation.
CHIPSET Don’t be fooled by the slim silhouette of the Reno4 Pro 5G though. Under the hood is some serious muscle that would have even the most fanatical PC/console gamer take a double-take. The Qualcomm Snapdragon 765G chipset that powers the Reno4 Pro 5G combines 5G and AI to bring real gaming bona fides to the device. Performance is revved up by the Qualcomm Kryo 475 CPU, while the Qualcomm Adreno 620 GPU provides 10 per cent faster graphics rendering compared to the standard Snapdragon 765G. Plus, select Snapdragon Elite Gaming features fuel smooth interactions and lag-free response.
SOUND
DISPLAY
BATTERY LIFE
5G CONNECTIVITY
The Reno4 Pro 5G display is a 6.5-inch AMOLED screen with a 90Hz Refresh Rate. And AMOLED is not some empty marketing buzzword. The images produced by an AMOLED display do seem to pop out due to its deep blacks and high contrast, especially when compared to other display technologies such as IPS. The display is also more responsive due to a higher refresh rate making
Nothing is more of a buzzkill than a phone dying in the middle of a zombie-killing quest. The large 4000mAh battery capacity of the Reno4 Pro 5G should take the anxiety off. And if the phone does indeed run out of juice, the world’s safest fast charging technology available commercially on the market, OPPO’s 65W SuperVOOC 2.0, will take the Reno4 Pro 5G from zero to full charge in only 36 minutes.
The next chapter of mobile gaming is being written – in the cloud. GeForce by NVIDIA or xCloud by Microsoft bring graphicallydemanding games that would normally require a high-powered, expensive gaming PCs or consoles to the mobile sphere. 5G will complete the cloud gaming story by allowing gamers to play intensive multi-player games on their devices with no lag.
gulfbusiness.com
June 2020 43
PARTNER CONTENT
Micro Focus demystifies digital transformation Micro Focus cloud transformation platform built on a comprehensive five-step lifecycle
P
erhaps it’s the “transformation” part of digital transformation that alarms a lot of business leaders. Transformation in its literal form imagines a wholesale shift in corporate strategy and processes, a daunting prospect for a business that wants to ensure business continuity while saving costs. This anxiety is, in most cases, misplaced. With the right partner, digital transformation can and should be a relatively seamless process that will often leverage existing infrastructure. Micro Focus has been helping organisations on their transformation journeys for over four decades. “Micro Focus and our partners are here to help. We offer an extensive range of planning and implementation services for every step of your journey,” says Gonzalo Usandizaga, vice president and general manager for Emerging and Growth Markets at Micro Focus. Micro Focus offers both professional (advisory) services and strategic portfolio management to guide customers through their transformation process. The advisory services incorporate transformation and solution discovery workshops that are aligned with the IT4IT reference architecture to help organisations assess their current state and define their journey. Applied to cloud transformation, the agenda for a solution discovery workshop looks like this: capture and prioritise business requirements. Through its project and portfolio management services, Micro Focus can help organisations optimise and streamline existing and cloud-based service portfolios; define business goals, set milestones, and track execution for each project; allocate planningto-release resources, calculate costs and ROI, and manage projects from a single set of
44 August 2019
data; and assess, align, and define their unique cloud transformation plan. The company’s newly launched Cloud transformation platform is based on a five-step lifecycle: Plan, Build, Deliver, Run, Secure.
BUILD As digital and physical worlds converge, a software-driven renaissance is disrupting existing business models in the same way that the cloud has disrupted traditional IT. There’s
a trickle-down effect, and today’s applications must deliver new, higher levels of agility, performance, scalability, and security. Micro Focus solutions address modern development needs – enabling businesses to transform and adapt in two critical ways: First, they strengthen stakeholder alignment, value delivery, and direction for wildly independent development teams – so businesses can build innovative solutions faster. Second, they liberate development resources to release faster – without compromising quality or performance. Micro Focus’ solutions deliver speed and quality in other ways, too. They enable business leaders to view their landscape from a high level to inform strategic decisions or shift down to a granular project level to track, trace, and audit every artifact. They also help automate processes and tests to shift left– combining coding and testing without having to choose one at the cost of the other. And finally, Micro Focus employs AI, machine learning, and predictive analytics to simulate real-world conditions and focus testing resources. “With these capabilities, you can shrink development times, reduce defects found in production, avoid unplanned downtime, and release with confidence”, says Usandizaga.
DELIVER
Gonzalo Usandizaga, vice president and general manager for Emerging and Growth Markets at Micro Focus
Public cloud services deliver infrastructure resources instantly and offer thousands of choices to users. Powered by automation and AI, Micro Focus solutions help organisations deliver freedom with guardrails. For starters, IT teams can pre-select, aggregate, and automatically deploy cloud services from a single AI-powered portal. Preselection ensures that best-fit services with the right options are delivered without slowing users down. A powerful provisioning engine automatically deploys environments – from bare-metal to virtual, private cloud, public cloud, and full hybrid systems (such as SAP instances)
As digital and physical worlds converge, a software-driven renaissance is disrupting existing business models in the same way that the cloud has disrupted traditional IT gulfbusiness.com
ILLUSTRATION: GETTY IMAGES/WITT UDOMSILP
With AI-based analytics, IT can spot red flags, uncover root causes, and resolve issues faster – allowing teams to focus on business impact. They can also restore service faster using automated remediation powered by a library of out-of-the-box runbooks. Finally, a business’s ability to continuously present IT’s value to stakeholders cannot be underestimated. By quickly building custom dashboards, IT can display the real-time health and performance of cloud services in business terms, together with relevant IT metrics. “Start monitoring applications, detecting anomalies, and fixing problems with new speed and insight-that is how you streamline Ops spending, satisfy users, and deliver real business value as you move to the cloud,” says Usandizaga.
SECURE
– for all IT, development, and line-of-business users. And because services are built with flexible designs and automation, rather than with rigid templates, it’s easy to adapt to deployment changes in cloud target, provisioned software, scale, or target location. “From the user perspective, there’s no going back; an AI-powered, self-service portal makes every IT service available to everyone,” says Usandizaga. With features such as smart search, conversational virtual agents, and smart ticketing, users can easily find, request, and consume information and services from anywhere, at any time. Customer satisfaction and tool adoption rates will inevitably rise as resolution times and ticket volumes fall. Best of all, business workflows can be created, tuned, and fully automated without code – eliminating the need for slow, expensive, hard-coded customisations. Finally, when workloads are ready to move to the cloud, extensive automation
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and step-by-step testing make it possible to migrate quickly, with few errors. The time saved can be allocated to other transformation tasks.
RUN As more services are delivered via more cloud vendors, the ability to keep tabs on the overall health of corporate assets becomes more difficult. By making the shift to automated, insight-driven monitoring and management – powered by AIOps – IT teams can cut through the complexity and keep services running. With automated end-to-end monitoring, Micro Focus solutions provide full visibility into services across multiple clouds, applications, data centres, and networks. Businesses can consolidate all monitored data into a singleview data lake to deliver faster fixes, valuable insights, and lower costs. Additionally, Micro Focus tools allow businesses to collect more detailed health and performance information than native, cloud vendor monitoring can provide.
High-value assets – identities, applications, and data – require elevated levels of protection during times of transformation. Corporate budgets, brand, financial viability, and even shareholder value can all take a severe hit when bad things happen. With Micro Focus solutions, organisations can strengthen their cyber resilience by intelligently adapting their security to protect identities, applications, and data. IT security teams can also detect advanced and insider threats – enabling them to evolve for future threats and regulations. “This approach is critical,” says Usandizaga. “It closes the gaps that arise from complex use cases and provides a unified view of your environment.” When advanced threats inevitably get through, Micro Focus advanced analytics and automation will respond fast, so experts can act in near real-time before significant damage occurs. But Micro Focus solutions do more than accelerate detection and response times. They also help ITSec evolve and sustain their security posture, says Usandizaga. “Employing all the data within your security ecosystem, they create a feedback loop with which you can continually analyse your protections against new threats – then adapt and revise your enforcement, governance, and policies accordingly,” he adds. “In this way, you can intelligently adapt your cybersecurity to manage an increasing attack surface, which now includes an unprecedented number of home workers and external connections,” Usandizaga says.
August 2019 45
FEATURES / GULF BUSINESS AWARDS
Meet the judges
I
n its eighth edition, the Gulf Business Awards, set to be hosted on November 25 in the UAE, will this year applaud the companies and business leaders in the Gulf region who have steered their organisations through what has arguably been one of the toughest years in recent times. While the Covid-19 crisis has disrupted the regional economy across all sectors, innovative leaders and resilient organisations have managed to adapt to the new normal, and have stood out as beacons of hope. These are the champions we wish to acknowledge and celebrate. Along with awards for companies and business leaders across the banking, energy, healthcare, real estate, transport and logistics, retail, tourism and hospitality sectors, we have also introduced three new special categories this year including Covid-19 Heroes, Disruptor of the Year and Sustainability Company of the Year. One business leader and company will be selected for the prestigious accolade of overall ‘Business Leader of the Year’ and ‘Company of the Year’. Gulf Business will also present the coveted Lifetime Achievement award to one special individual for their outstanding contribution to the region. The award winners are chosen by an independent judging panel that consists of industry and business leaders, and we are pleased to reveal our esteemed judges for this year’s Gulf Business Awards.
46 October 2020
Dr Habib Al Mulla
Mona Ataya
One of the UAE’s most highly-respected legal authorities, Al Mulla has over 34 years of experience and has drafted many of the modern legislative structures currently in place in Dubai. Al Mulla focuses his practice on litigation and arbitration. A strong advocate for the modernisation of UAE laws, he is often consulted to draft and advise on federal and emirate level laws. He also serves as the chairman of the Chartered Institute of Arbitrators – UAE committee and most recently served as chairman of the board of trustees for the Dubai International Arbitration Centre. Al Mulla has held numerous prominent government positions over the years, including being a member of the UAE Federal National Council, and chairman of the UAE Jurists Association. He has also published a two-part book titled Life’s Harvest on the laws, politics and economy of the UAE.
One of the Middle East’s most prominent women entrepreneurs, Ataya leads the successful SME Mumzworld. A transformational leader, she has managed to grow Mumzworld from a business plan on paper to a brand that reaches more than two million mothers across the region. Founded in 2011, Mumzworld has pioneered a revolutionary e-commerce shopping experience for all things mother, baby and child in the Middle East region. Today it has over 200,000 products, an engaged community, exclusive product offerings and provides delivery to over 20 different countries. With six rounds of funding, great investors on board and a solid business plan, Mumzworld claims to be the number one funded women-led e-commerce company in the Middle East.
Executive chairman, Baker & McKenzie Habib Al Mulla
CEO and founder, Mumzworld.com
gulfbusiness.com
FEATURES / GULF BUSINESS AWARDS
As we head closer to the 2020 edition of the Gulf Business Awards, we introduce our esteemed judging panel for this year
John Martin St. Valery
Ian Fairservice
Andrew Wingrove
St. Valery has over 20 years of business experience in the UAE, having established the award-winning professional services firm Links Group, which became part of the global professional services firm Equiom in 2016. A foreign direct investment specialist, he works closely with government departments. Currently, he serves as the chairman of the British Business Group (BBG), a not-forprofit business group open to British owned, Dubai-based businesses, British expats and UK PLCs with commercial interests in the region. The BBG works closely with the UK government’s Department for International Trade and provides thought leadership and market intelligence to its members. It hosts an average of 60 events per year. St. Valery is also the chairman of JacksonMSV, which supports firms operating onshore in Dubai.
With media in its infancy, Fairservice identified the opportunity to launch the country’s first magazine and set up his media business, Motivate Publishing, in June 1979. Together with his partner HE Obaid Humaid Al-Tayer, who is now the UAE Minister of State for Finance, he has seen the company develop into one of the most successful media houses in the region. Publishing a wide range of award-winning magazines and books along with diverse media interests across digital, content, events and cinema, Motivate has a team of more than 150 media professionals in a network of Middle East offices. What’s On, Gulf Business, Emirates Woman, Identity, Golf Digest, Campaign and Business Traveller are some of Motivate’s best established consumer and trade brands with websites that reach an audience of more than two million people each month.
A well-known figure in the UAE media scene for over 16 years, Wingrove has launched magazines, websites, brands and events including the Time Out Restaurant Awards, Ahlan Hot 100, Esquire and Architectural Digest. More recently, he served as the group lifestyle director at Dubai World Trade Centre, driving the brand development of events such as World Art Dubai, the Motor Show and Gitex Shopper. Now at Motivate Media Group as group director, Wingrove plays a leading role in the company’s new business development and international partnerships, as well as in driving forward the luxury lifestyle and business titles. He is also introducing a broader range of events and content partnerships across the region.
Chairman, British Business Group, Dubai and Northern Emirates
gulfbusiness.com
Founder and managing partner, Motivate Media Group
Group director, Motivate Media Group
October 2020 47
PARTNER CONTENT
Strong ties Gulf Business speaks to John Martin St. Valery, chairman of the British Business Group for Dubai and the Northern Emirates on coping with the crisis, impact of Brexit and plans ahead
May, attracting an audience of over 250. We also held our annual general meeting as a virtual event to allow all members the opportunity to attend. When we hosted our first live event post-movement restrictions, we were overwhelmed by the interest and the event was fully booked within three days. Our calendar of events for the remaining months of 2020 will continue to facilitate the growth of our members by providing them with useful content and networking opportunities, while being mindful of social distancing guidelines. One of our key social events, the Battle of the Business Councils golf tournament, is taking place in October and we have extended the day to include morning tee times due to its popularity.
Regionally and globally, do you believe the partnership model has been strengthened by Covid-19? How has Covid-19 impacted operations for British Business Group (BBG) and your members?
From a BBG perspective, how have you adjusted your calendar of events to suit the new normal?
As a community, we all experienced the collective operational, financial and HR obstacles that have resulted from the Covid-19 pandemic. A core aspect of our business model is providing members with the platform to cultivate business opportunities through face-to-face networking, and with movement restrictions in place, we had to diversify the way in which we continued to provide value. Our first responsibility when implementing our shift in focus was to ensure we extended genuine empathy for our members. Our priority was to reach out in person to each business to reassure them of our continuing support as they refocus their long-term business strategies. In total, we spoke to over 70 per cent of our database and found 19 per cent were redesigning their supply chains to mitigate future risk and 51 per cent were looking to digitalise their proposition.
Taking stock of the many webinars available, we made a conscious decision not to overwhelm members with additional online events and instead, carefully selected credible, existing content from within our business ecosystem. Working with our sponsors and members such as HSBC, Fragomen, PwC, The Fry Group and Barclays, we were confident that the content we were endorsing was valuable for our members. We worked with the British Embassy and Her Majesty’s ambassador, Patrick Moody, and Her Majesty’s consul general, Andrew Jackson, on an address to the British business and expat community in
Have you seen many members alter their business models to cope with the crisis? During the early stages of the pandemic, we saw members adjust to the accelerated adoption of technology and the sole objective for many was to survive the period of uncertainty. Many of our members are rooted in traditional industries where, prior to Covid-19, technology had perhaps taken a back seat in their operations, so the transition was not easy. However, over the past two months, we have seen members pivoting their entire business model with great success for long-term implementation and commercial benefit.
Alongside the uncertainty, I believe we are all becoming more empathetic, creative and collaborative with our business models and approach to industry relationships
Now more than ever, we are working closely with senior stakeholders within our business ecosystem, including the Dubai Chamber of Commerce and as part of the Multi Nation Task Force (MNTF), a collective of all Dubai and Abu Dhabi based international business groups. Our already proactive voice has grown stronger, and we have developed our role as an authoritative voice of the British business community to collate and ask the pertinent questions on behalf of our members.
What are the biggest challenges and the greatest lessons learnt from the crisis so far? Alongside the uncertainty, I believe we are all becoming more empathetic, creative and collaborative with our business models and approach to industry relationships. The sudden shift in focus allowed us to take stock and identify areas of improvement, bringing us closer to members and stakeholders, despite the lack of traditional face to face networking. During our member outreach, cash flow was highlighted as an immediate concern for many and the team mobilised to offer support, where possible, by providing direct contacts within the banking sector. As chairs of the finance and funding working group of the MNTF, we are also in direct contact with the UAE Central Bank, sharing insights gained through the forum with live case studies and ideas around initiatives aimed at supporting the SME community in particular. We also worked closely with the British Business Group Abu Dhabi to launch a microsite that served as a collective source
of verified information and qualified contacts to support those struggling with financial, immigration, HR and legal issues. This was an inspiring exercise that saw the British spirit of cross-industry peers helping one another and exchanging best practice.
John Martin St. Valery, chairman of the British Business Group for Dubai and the Northern Emirates
Looking at the UK, the Brexit transition period ends this year. How has the situation been so far and what are your projections looking ahead?
Post-Brexit, do you anticipate any major changes in bilateral relations between the UAE and the UK?
Prior to Covid-19, we saw a significant increase in trade mission activity as British businesses explored their trade options beyond the borders of the European Union. This has not changed and, if anything, the appetite for business opportunities in the UAE has increased during 2020 as we move closer towards the end of the transition period. We are now able to connect businesses that are yet to establish a presence in the region with relevant contacts within our membership to ensure conversations remain alive and opportunities are seized.
The BBG has been apprised of great changes in momentum in business and trade opportunities emanating from the UAE-UK bilateral relationship, which we fully support through the activity and engagement we have with the British Chamber of Commerce, and our awareness of planned actual and virtual trade missions organised by the Department for International Trade and UK regional Chambers of Commerce. The recent appointments of the UAE-UK Business Council co-chairs, Minister of State, Ahmed Al Sayegh, and the British Prime Minister’s chief strategic advisor,
Sir Edward Lister, demonstrate the importance of this trade relationship at the most senior level.
Lastly, what are your expectations for the rest of 2020 and the way ahead post the Covid crisis? There is an enduring willingness within the British business community to continue operating in the region, retaining the established commercial success for British business in the UAE and to build even stronger relationships with our host country. As we continue to build on our proposition of being a welcoming, business ecosystem creating valuable business connections for British companies in the region, we will adapt to the economic and social landscape, listen and respond to our members and work hard on behalf of our sponsors. We remain hopeful we will be able to hold our highly anticipated key social events, the Great British Day Out and the BBG Christmas Ball in some capacity, during the rest of the year.
FEATURES / TECHNOLOGY
Embracing the
ILLUSTRATION: GETTY IMAGES/MUNANDME
DIGITAL WORKPLACE What really differentiates the future of smart offices? Omar Akar, regional vice president and MD, Cloud and AI Business Group at Huawei Middle East reveals the details
D
igital transformation is a critical choice for growth. It has evolved the way businesses across the Middle East are functioning. Not only is it proving to increase productivity and efficiency, but it is also encouraging a digital culture with long-term business benefits. For that reason, businesses should continue investing in innovation to effectively compete in existing and emerging markets. Many new digital solutions are being introduced in the Middle East today that are embracing the concept of simplicity with clear objectives, functions, services, and user experiences. Such solutions have just one goal from the very beginning of research and development: bringing smart offices to enterprises. So what really differentiates the future of smart offices? To start, cloud video conferencing is now a core capability. Solutions must effortlessly meet the requirements of leader summits with vivid graphic fidelity for remote video conferencing and direct communication. Moreover, today’s productivity tools simplify the complex process of cloud video conferencing. Simple but powerful product capabilities and streamlined user
50 October 2020
experiences are key to a competitive smart office, with product offerings that now widely outperform those of competitors. Intelligent whiteboards are also a key component to increase productivity. It eliminates the difficulties of software and hardware adaptation and simplifies operations. Large-screen endpoints are no longer hardware silos, and smart services for office teams easily replace multiple devices with one screen. It also improves user experience with 4K co-author annotation and writing with a stroke effect at the industry’s lowest latency of 0.035s, therefore writing on the board feels like writing on a piece of paper. Actual application scenarios utilise this capability for remote contract signing to simplify complex offline operations. Furthermore, ultra-HD wireless technology now opens the door to the new world of office projections. Users can now just enter
a simple password to project the content of their laptops and mobile phones on the large screen. Reverse control allows users to control their PC from the projecting tool. Users can also collaborate and annotate on the screen at any time. Using such productivity tools eliminates the complicated and tedious collaboration of traditional methods for simple, intuitive, and convenient communication. Technological advancements have reshaped many organisations and the way traditional workplaces used to work. Covid19 has further accelerated the need for digital solutions to make businesses more integrated and streamlined. With such cutting-edge solutions on the rise, businesses will be able to achieve increased productivity and efficiency to keep up with competitiveness and customer demand.
Technological advancements have reshaped many organisations and the way traditional workplaces used to work gulfbusiness.com
S P E C I A L R E P O RT
REAL ESTATE
ILLUSTRATION: GETTY IMAGES/ANILYANIK
SPECIAL REPORT
Building back: Is Dubai’s real estate market rising again? B Y LY N N E T T E A B A D
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hat a year this has been for real estate in Dubai. Despite the crisis and the roller coaster ride we saw in transaction flows and buyer sentiment, we are currently in a very interesting place. Prices are now stabilising in prime areas where supply is low, and in some places, rates are also rising. We are starting to see multiple offers for properties in these areas as well. So how did we get here? Going back to the start of the year, in January and February of 2020, Dubai’s property market saw month-on-month increases in real estate transactions following similar trends from H2 2019. During these two months, the enthusiasm for
52
Expo 2020 was still strong, and this was seen in the transaction volumes. This trend, of course, came ahead of concerns of Covid-19, which started to heighten in March. There was a 12 per cent year-on-year rise in overall transactions in January 2020, with the figures growing 33 per cent year-on-year in February, with an incredible 76 per cent rise in off-plan transactions. Individual investors were looking at this period as an opportunity to invest in a city that was going to be hosting the biggest show on earth, Expo 2020, and this interest was also backed up by the enormous amount of surplus supply the market still had from the previous year. Looking more broadly at the first quarter of the year, Dubai real estate sales transactions grew by 9.74 per cent when compared to the same time period in Q1 2019. In fact, Q1 2020 had the highest number of transactions since Q1 2017, with the market cruising towards what looked like would be a recordbreaking year. But when the pandemic came to the forefront in March, it was obvious that we would see a slowdown in transactions. Due to the UAE government’s proactive policies and swift and innovative efforts, we made it through this tough period quicker than most. Innovative efforts from the authorities also helped the real estate market to start transacting again. One such decision from the Dubai Land Department was the introduction of online property transfers. Once the registration trustee offices came back to work with 30 per cent of their workforce, those looking to close a deal could book an appointment a day in advance and email the documents. That way the interaction on premises was reduced to a minimum. The online procedure implemented during the lockdown remain in place, and property registrations now can also be completely done online. Dubai was in full lockdown in April, partially in May and didn’t start opening fully until June. Hence, the entire second quarter was affected by Covid-19. Overall, Dubai saw 5,552 sales transactions in Q2 2020 worth Dhs10.86bn, down 38.7 per cent (9,062 transactions) and 42 per cent (Dhs18.78bn) respectively compared to the same period last year. As the average property sales cycle is 45-60 days, we saw the biggest impact of the lockdown on the sales transactions in the second half of May, with volumes dropping to their lowest levels at the end of the month. While the secondary market saw 40 per cent of the transactions in Q2, off-plan accounted for 60 per cent of the transactions. However, that trend began to change in June, when, for the first time since the crisis began, off-plan sales transactions volumes dropped below those in the secondary market. Real estate sales transactions also grew in June, with an average of around 570 properties sold in Dubai every seven days. Sales and rental enquiries were also up compared to last year for both apartments and villas/townhouses, with the highest increase in enquiries for villas/townhouses. So why would people look to buy property right after the lockdown and during a pandemic? The answers – pent-up demand coupled with attractive prices and lower down-payment and funds required – a move that was implemented by the UAE central bank during the lockdown.
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CMY
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SPECIAL REPORT
A strong June laid the foundation for a faster recovery and we started to see patterns of a V-shaped recovery, characterised by a rapid rise following a sharp decline. We slowly started heading back to the transaction levels of February and early March 2020. August typically has been a slow month for Dubai real estate when compared to the rest of the year, but not in 2020. According to Data Finder, the data platform under the Property Finder group, August 2020 saw a rise of 11.3 per cent in real estate transactions compared to August 2019. In previous years, the summer months were typically slower for real estate transactions in Dubai because of the holidays. This year, due to the Covid-19 situation, many residents chose not to travel. This, coupled with pent-up demand and attractive pricing drove transactions higher. Looking only at the secondary market, August 2020 had 22.4 per cent more transactions than August 2019.
New trends The softening of Covid-19 restrictions by the UAE government has positively impacted market sentiment across the real estate sector. Real estate portals Property Finder and Mortgage Finder saw an immediate increase in consumer enquiries and searches as movement restrictions were revised. We have started to see signs of the market returning to a new normal. In addition, a new trend emerged which we didn’t see during the lockdown period – rental enquiries for villas in Dubai went up. Another trend we saw at the start of the crisis was an increase in searches for villas/townhouses with outside space such as gardens, balconies and pools. This was
“Due to Covid-19, many residents chose not to travel. This, coupled with pent-up demand and attractive pricing drove transactions higher”
a clear indication that people are valuing personal, outside space in their homes. The key new trends that have emerged are as follows: • Significant increase in short-term leads, especially in Dubai • The percentage of searches for “pool” and “garden” have increased • People are increasingly searching for bigger houses • In rentals, the high price category units are the least affected • Payment terms for rentals are significantly more important now. Landlords are accepting a higher number of cheques to ease the financial load on the tenants
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SPECIAL REPORT
FOR RENT When looking at the popular areas searched for by consumers from a rental perspective, Dubai Marina tops the list. Here are the top 10 searched areas for rent in 2020:
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Market movement The market started strong at the beginning of the year because of the expectations surrounding Expo 2020 and fell drastically between March and April due to the Covid-19 impact. The market reached its lowest point in May 2020 and once the lockdown was lifted, it began its recovery. Now, despite claims of a second coronavirus wave, the market appears to be fully equipped to handle the crisis. From what the data shows us, the market started stabilising in June and since then it has gradually improved. Listings are increasing, consumers are sending more enquiries and property agents are closing more deals – some even virtually – and the number of consumers looking for mortgage pre-approvals has increased by over 30 per cent. We are seeing consistent growth, even if it is fractional. As we slowly return to our ‘new normal’ and the Dubai real estate market becomes more dynamic and adaptable to change, some of the new trends that have emerged during the crisis look like they are here to stay. Lynnette Abad is the director of Research and Data at Property Finder
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2 6
4.2% Business Bay
5.2% Palm Jumeirah 3
3% Dubai Hills Estate 2.4% Al Barsha
10% Dubai Marina
Talking off-plan Another interesting trend that changed during the crisis was the split of off-plan versus secondary market transactions. Over the last two years, the split between off-plan and secondary market always hovered in the 50/50 range. Once the crisis started, off-plan transactions started to increase and the split grew to 70 per cent by May. However, once the lockdown eased, the trend shifted and there was an increase in secondary market transactions. The split also reversed, with off-plan now only accounting for 30 per cent of all sales transactions.
5.6% 2.4% Downtown Jumeirah Dubai
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5
3.3% Jumeirah Lakes Towers (JLT)
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8 2.4% Dubai Silicon Oasis
4.9% Jumeirah Village Circle (JVC)
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4
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During the lockdown, search and demand data on Property Finder showed that people started looking for bigger properties, shifting from the traditional small family apartments to villa/townhouses. This trend has grown significantly since the crisis started and continues to have an effect on the market. Since the start of the pandemic, the ratio of sales transactions for one-bedroom units has fallen by over 10 per cent and for studios by more than 34 per cent. The ratio of transactions for three-, four- and five-bedroom units has increased by 9 per cent, 20 per cent and 15 per cent respectively. When looking at the split between apartments and villas/ townhouses, the volume of villas/townhouses sales transactions to the percentage of apartments increased gradually from a 12/88 split to now a 21/79 split. In July, a total of 494 sales transactions were recorded for ready villas/townhouses, as consumers were looking for ready units to move into. This marks the highest number of villas/ townhouses sold in a single month since transaction data was made available in 2008.
Popular areas
FOR SALES When we look at sales transactions, Town Square and Mohammed Bin Rashid City stand out as communities that have topped searches in the past few months. The most searches in May and June were in Mohammed bin Rashid City while in July and August, they were dominated by Town Square. These could be attributed to the special deals the developers introduced in these areas over the summer months, including the option of putting down a minimum amount and moving into a new, ready property with a five year post-handover payment plan. Now, let’s see how search trends translated into actual sales transactions. These are the top five transacted areas from July to September 2020: JULY
AUGUST
1
Town Square
Town Square
2
JVCJVC
Dubai Marina
3
Dubai Marina
Dubai Marina
Business Bay
4
Dubai Creek Harbour (The Lagoons)
International City
International City
Business Bay
Business Bay
Palm Jumeirah
5
SEPTEMBER
JVC
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• The percentage of searches for warehouses in commercial real estate is increasing
ILLUSTRATION: GETTY IMAGES/JORG GREUEL
SPECIAL REPORT
The supply question: Is demand catching up? BY AARTI NAGRAJ
T
he moot point of any discussion surrounding Dubai’s property market – for some years now – has been the topic of oversupply, especially in the residential space. According to a recent report by Knight Frank, new supply in Dubai’s residential space has grown steadily – from 12,900 units in 2015, to 18,100 units in 2016, 27,700 units in 2017 and 28,500 units in 2018. The number of new homes forecast for completion in Dubai this year is 50,700 units – marking an increase of 40 per cent from the roughly 36,300 units added to the market in 2019. The report, which looked at property hubs across the globe, found that Dubai came second on the list (after Hong Kong, at 53 per cent) when it came to the addition of new residential supply for 2020.
However, due to the current economic situation caused by the pandemic, fewer units could actually be completed as compared to the forecast, the report added. With the market witnessing a slump in property prices during the last few years – driven to an extent by oversupply – Dubai also announced the formation of a new real estate committee to ensure balance in the emirate’s property market in September last year. Headed by Dubai’s Deputy Ruler Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, it includes senior developers and is tasked with creating a “comprehensive strategic plan and vision for all major real estate projects in the emirate for the next 10 years”. It will also ensure that semi-government real estate companies do not compete with private developers. While 2020 had a good start for Dubai’s residential market – primarily because of expectations surrounding Expo 2020, the Covid-19 situation dampened the market in the second quarter. However, transaction numbers gradually increased during the third quarter, pointing towards demand returning to the market – especially in certain areas within the emirate. “While oversupply is a genuine problem within the Dubai property market, it is not a general one as there are pockets of areas where stock is actually not readily available enough to satisfy the demand and it is in these areas that bidding wars between buyers can happen,” explains Mario Volpi, sales and leasing manager at Engel and Volkers Dubai. While many developers have focused on completing old projects, the market has also seen the sales launch of some new developments this year. In September, Majid Al Futtaim said the third phase of the Elan project at its flagship Dubai community, Tilal Al Ghaf – including 322 homes – sold out in 48 hours. Meanwhile Azizi Developments also announced last month that it is seeing strong demand from international investors for its recently launched Dhs350m Creek Views II development, located in Dubai Healthcare City. So far, 30 per cent of units have been sold to Israeli investors, 30 per cent to UAE nationals, and 20 per cent to Saudi citizens. “I firmly believe that now is the right time to launch new projects. Indeed, we are receiving numerous sales enquiries on a regular basis, with demand for our developments remaining extremely robust. To cope with the consistent demand, our sales office is now open seven days a week and we have increased the amount of staff,” states Abdulla bin Sulayem, CEO of Dubai-based developer Seven Tides. “Why is that? In my opinion, many investors are now risk averse and real estate as an asset class is clearly very popular for those with a cautious mid to long term strategy and with good reason. It can provide stable longer-term yield and of course there is the added advantage of capital gains. “Specifically, with off-plan investments, payments are staggered over the period of the build and beyond in some cases. The advantages are clear, investors hold the current sales price, protect their liquidity and only pay when the development is handed over and a tenant can be moved in. That is in contrast to the financial markets which are still somewhat volatile, while bonds offer little in the way of return,” he opines.
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PA R T N E R C O N T E N T
Studying the trends From sustainability to remote working, Dr Michael Waters, associate professor in Real Estate at Heriot-Watt University Dubai shares his views on some of the major real estate trends in the UAE
T
he real estate sector has been the driving force of the UAE economy for a significant number of years, with periods of doubledigit sales and rental growth attracting global investor attention. However, the pandemic has – not surprisingly – seen this sector put on pause. Often expectations and reality can be two different things. According to Data Finder’s latest release, stabilisation and some selective growth is being observed in the market, with August 2020 witnessing a rise of 11.3 per cent in real estate transactions compared to August 2019. Such trends suggest that the regulatory measures, including the reduction in loan-to-value ratio requirements, are proving attractive. Also, it is important to note that real estate is a long-term game.
Dr Michael Waters, associate professor in Real Estate at HeriotWatt University Dubai
For investors, the use of technology makes it possible for them to view preconstructed projects in a better way MAIN TRENDS Shift towards a digital and knowledge-based economy There has been a gradual shift towards a digital economy in all sectors in the Middle East including real estate. Governments have been instrumental in encouraging this change – for example, the Dubai Land Department is the first government entity in the world to use blockchain in real estate transactions. For investors, the use of technology makes it possible for them to view pre-constructed projects in a better way through BIM (Building Information Modeling), access a global virtual market and more. Such initiatives are already having a positive impact on the industry.
Awareness about sustainability Of late we have seen greater awareness about the need for sustainability within the real estate sector. Some reasons for this are the very high rates of
City life
A vast majority of the UAE residents live in urban areas and cities. 2019
86.79%
urbanisation (86.79 per cent of UAE’s total population lives in urban areas and cities, as of 2019), the scale of valuation and the basic right of every citizen to have access to modern housing. The real estate sector also accounts for a very large proportion of energy consumption and greenhouse gas emissions, making the need for sustainable building practices more urgent than ever before. A recent example is the launch of the UAE’s first green sustainable real estate investment trust (REIT) at a valuation reaching between Dhs950m and Dhs1bn by Masdar, a subsidiary of Mubadala Investment Company.
Impact of remote working on the UAE commercial property market While normalcy is gradually returning, work from home remains a key trend in the Covid-19 era. There has also been evidence of corporate downsizing, meaning fewer number of employees are holding jobs in the UAE. All of this has resulted in the commercial real estate sector in the country facing some pressure. We are seeing commercial property owners responding positively with recent evidence of building retrofitting to attract and retain their tenants. On the residential side, the market has seen a spike in purchase and enquiries for larger apartments (+9.4 per cent) and villas (+20 per cent) as people are now spending more time at home owing to remote working and home schooling and are therefore seeking more space to work and play.
Heriot-Watt University Dubai offers a BA/MA degree in Real Estate Management and Finance and an MSc in Real Estate, both of which have been designed in response to employer demand and in recognition of the fact that the property sector is now a central part of wider financial markets.
ILLUSTRATION: GETTY IMAGES/SERGII IAREMENKO
SPECIAL REPORT
“Developers should keep in mind that buyers are looking for ready units with post-handover payment plans” The developer is currently focusing on its two new developments, Seven Palm and the newly-relaunched Golf Views Seven City. Seven Palm, its third Palm Jumeirah project, is due for completion by Q2 2021. Located in JLT, the Dhs1bn Seven City development, the company’s first mixed-used project, has a total built up area of up to 3.5 million square feet and is scheduled for handover by the second quarter of 2023. “In terms of demand, Dubai will recover, in fact it is already beginning to recover thanks to our dynamic and decisive leadership. However, another reason why Dubai and the wider
UAE will flourish post-pandemic is the absence of property tax. Many governments across the world will need to raise tax revenues to pay back the huge amounts of money they have borrowed to finance their way through the pandemic. Potentially, these higher taxes may well encourage high net worth individuals, entrepreneurs and businesses to consider relocating to Dubai to take advantage of our tax-free property environment and quality of life,” adds Sulayem.
Changing demand As demand starts to pick up, developers now need to ensure they keep pace with the changing requirements from investors. “Developers should keep in mind that buyers are looking for ready units with post-handover payment plans so this should be part of any future project launches,” says Volpi. In terms of ROI to differentiate their project, developers must also offer a compelling proposition, based on build quality, return (mid to long term) and potential capital appreciation, opines Sulayem. “In addition, and wherever possible, create a unique customer buying experience through technology (virtual walkthroughs, 3D virtual tours, contactless payments, etc). This is particularly pertinent today, following all of the restrictions associated with the pandemic.”
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SPECIAL REPORT
Proptech: A game changer BY ZAINAB MANSOOR
T
he advent of innovative technology solutions and the gains reaped from it have catalysed digital enablement across most industries. Real estate is no exception. As the industry grew more receptive to disruptive technologies, prodded by widespread digital adoption and the demand for greater convenience, it saw the rise of specialised tech solutions focused on real estate asset and property management – known as proptech. The scope of proptech has expanded significantly in recent years to include information transparency, AI-powered valuations, virtual viewings, online listings and blockchain transactions, among others. With widespread adoption, 2019 proved to be a banner year for proptech, securing
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$2.6bn of global investment, up from $1bn in 2016, a KPMG report suggests. “There has been increased demand for proptech related services within the real estate industry. Part of this can be attributed to growth in digital transformation within the industry including areas such as asset digitisation, predictive analytics in real estate asset performance, IoT in workplace management and data analytics surrounding overall market performance,” notes Mark Hamilton, head of digital solutions, MENA at real estate services provider JLL. “Because many of these technologies are new, it gives way for proptech companies to develop and innovate solutions tailored to the specific technology subsets. Many developers and occupiers are excited about these technologies and have objectives of implementing these technologies within their real estate portfolios.” Mohamad Kaswani, CEO at property portal Urban adds: “Technology has the opportunity to enhance every part of the journey for landlords, tenants, property managers and others in the property ecosystem. Digitalisation improves efficiency, creates transparency, and helps all of us make better informed decisions. It also empowers seamless and consistent experiences from virtual tours to online payments and contracts.” Digital adoption in the real estate space was further fuelled by the onset of the Covid-19 pandemic. As authorities activated protocols to contain the spread of the virus, necessitating social distancing and isolation, multiple real estate players resorted to technology with a renewed sense of urgency to ensure business continuity. Consequently, proptech gained further ground. “The pandemic has forced all industries to re-evaluate how they do business, and the real estate sector is no different. All the players in the industry, from developers to brokers are now transforming how they cater to the needs of their customers digitally – from remote viewings, digital contracts, and rental platforms, the ripples of change are spreading throughout the sector. Digital transformation is no longer about having a competitive edge; it’s about surviving and staying relevant,” notes Ammar Malhi, head of client relations at Dubai-based SmartCrowd, MENA’s first financially regulated real estate investments platform (REIP).
Dubai spearheading innovation Digital adoption within Dubai’s real estate space has also been substantiated by the evolution of the emirate’s smart ecosystem and its adoption of innovative services and projects. The Dubai Land Department (DLD) introduced AI into the valuation process of real estate properties last month, with the move expected to help reduce the valuation processing time to 15 seconds and cut the cost by 20 per cent. DLD introduced AI to verify ‘Ejari’ contracts back in 2018. Furthermore, the interest in proptech has grown in part due to the initiatives undertaken by private sector entities. As the Covid situation evolved, UAE-based Property Finder launched a new feature enabling people to live stream a house viewing and leave real-time comments for agents.
ILLUSTRATION: GETTY IMAGES/MAMBA AZUL
SPECIAL REPORT
“Even after the pandemic eases, customers may continue to opt for a virtual viewing over a physical visit primarily due to increased convenience”
Even after the pandemic eases, customers may continue to opt for a virtual viewing over a physical visit primarily due to increased convenience, the promise of faster turnaround time and better sustainability practices.
Pacing ahead The evolution of digital solutions has also made real estate investment affordable and accessible, say experts. Real estate investment platforms encourage investors – novices and seasoned – to consider a range of property investments using a crowdfunding model. SmartCrowd, which acquired a full licence from the Dubai Financial Services Authority in November 2019, allows people to invest in real estate starting from Dhs5,000. Rental income from the properties is transferred into the investor’s digital wallet on SmartCrowd. “We are quite bullish on the prospects of REIPs moving forward. Given that real estate prices have declined over the past few years, investors with a long-term outlook are realising that investing small amounts today allows them to take advantage
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ILLUSTRATION: GETTY IMAGES/JORG GREUEL
SPECIAL REPORT
“When IoT data and 3D visualisation of real estate space can be combined to represent in real time the digital replication of an office building, this is known as a digital twin” of bargains in the market, without taking on too much risk. By reinventing the customer experience with an obsessive focus on transparency, security, and healthy returns, we feel that REIPs will transform the real estate market by offering distinct advantages to each segment of society,” explains Malhi. SmartCrowd’s investor base has grown by 300 per cent and
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assets under management have risen by over 230 per cent, he confirmed. Moving ahead, disruptive technologies such as 3D architectural renderings, IoT technologies, and integrated softwares look set to alter the landscape and the structures we work and live in. “When IoT data and 3D visualisation of real estate space can be combined to represent in real time the digital replication of an office building, this is known as a digital twin. This industry is projected to be worth $35.8bn in 2025, compared to $3.8bn in 2019, according to research firm MarketsandMarkets. The team at MIT’s Real Estate Innovation Lab says the benefits of digital twins for the commercial real estate industry are many, including management of building occupancy, increased budget reliability and faster delivery in the construction realm. Given the projected growth in the industry, we can expect to see digital twins implemented as almost an industry standard across many asset classes,” predicts Hamilton at JLL. Urban’s Kaswani concludes: “We expect an accelerated move towards digitalisation of the rental and sales experience at every level (discovery, viewings, payments, etc) based on the evolving expectations of tenants and landlords today. There’s also massive opportunities for collaboration between fintech and proptech from financial instruments to support home ownership to renters’ insurance and deposits.”
SPECIAL REPORT
Building for a new normal
Responses from 160 global developers reveal the pandemic’s impact on near-term housing supply and long-term design trends
44%
On hold As a result of Covid-19 have you delayed any projects?
50%
Same
will make changes to the design of their delayed developments 57%
37%
Yes
No
44%
7%
Note: Figures may not add up to 100% due to rounding
Local focus Will projects be more or less sensitive to the requirements of domestic buyers? 7%
won’t make any
Prefer not to say
43%
Less
More
More units coming
The number, or forecast number, of completions in each city, 2015 to 2020** DUBAI
HONG KONG
LONDON
MADRID
20+ units schemes
2015
2016
12,900
11,300
18,100
17,900
14,600
2017
27,700
2018
28,500
17,800
36,300
2019
50,700
2020*
DUBAI
20,900 HONG KONG
22,200
SINGAPORE
11,000
SYDNEY 4+ floor schemes
18,600
3,400
9,700
23,600
13,600
5,400
6,800
22,500
21,000
NEW YORK New listings
6,200
24,500
*Forecast/annualised
16,600
20,600
3,200
16,200
16,200
4,700
26,500
5,700
31,100
18,200
4,100
3,600
17,900
19,000
4,300
3,100
LONDON
MADRID
NEW YORK
SINGAPORE
29,300
12,100 SYDNEY 73%
Up and down The change in prime residential prices to Q2 2020, in the same cities
24%
38%
34% 14%
3%
1% -4%
5 year
22%
22%
17%
1 year
10 year
29%
-2%
3% -1%
-5%
-1% -1%
-3%
-17% -25%
**This chart should not be used for comparison. For London, this excludes schemes of fewer than 20 units and is therefore noticeably lower than official Net Additions data. For 2020, H1 data has been annualised. In Sydney, this relates to high-density schemes, those of 4+ storeys. For New York, this is the number of new listings in Manhattan and Prime Brooklyn
SOURCE: KNIGHT FRANK’S GLOBAL DEVELOPMENTREPORT 2020
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SPECIAL REPORT
“CONTROLLING SUPPLY AND DEMAND WILL BE THE KEY TO REAL ESTATE SUSTAINABILITY FOR THE COMING YEARS”
S U LTA N B U T T I B I N M E J R E N , D I R E C T O R G E N E R A L O F T H E D U B A I L A N D D E PA R T M E N T
Lifestyle Farfetch Rolls-Royce Mercedes-Benz Rolex
68 71 72 74
OCT
20
Aston Martin AMR-C01 An F1-style steering wheel, a carbon-fibre monocoque and a wrap-around Samsung screen are part of this GBP57,500 simulator
An elevated art
At the Watches & Wonders Shanghai event last month, a handful of luxury watchmakers showcased a few of their latest launches for 2020 p.76 gulfbusiness.com
October 2020 67
Lifestyle / Fashion
True story It’s been a meteoric rise, and a scarcely believable one at that, for luxury e-commerce platform Farfetch. It may be at its strongest now amid the pandemic, but it has mustered over a decade of technology and retail know-how to get to this point. In an exclusive interview with Gulf Business, the brand’s founder, chairman and CEO José Neves, outlines the big picture BY VARUN GODINHO
W
hen the share price of a much-touted New York Stock Exchange-listed company falls off a cliff edge within a year of its debut, there are legitimate questions raised about its future. On August 8, 2019, luxury fashion e-commerce major Farfetch announced that it was acquiring New Guards Group (NGG) – the parent company of Off-White, Heron Preston and Palm Angels – for $675m. The market responded by forcing its shares down 40 per cent. It would take far more than that to unnerve the now 46-year-old founder, chairman and CEO of Farfetch, José Neves. A year on, he stands vindicated. “The two biggest days ever on Farfetch were not Black Friday, Cyber Monday or Single’s Day. They were the two Nike Off-White launches we’ve done on the platform since the acquisition. The last one got 800 million hits on our platform,” says Neves, adding that the acquisition of NGG quickly met its objective of driving free and organic traffic towards the platform. But rather than just being a win for Farfetch, NGG too reaped a rich harvest on its digital profile post the acquisition. “NGG was only 2 per cent direct to consumer online when we acquired them. And in Q2 [2020], it was already 20 per cent of their business. So we multiplied tenfold their direct to consumer digital channels. And we think it will be 50 per cent of their business in the next few years.” The success of NGG has encouraged others like Carol Lim and Humberto Leon (former creative directors at Kenzo) to bring their Opening Ceremony brand onto Farfetch. Likewise, Verbal and Yoon too recently brought their edgy Tokyo-based brand to Farfetch. To see the 12-year-old Farfetch as merely a magnet for luxury fashion brands would
68 October 2020
be a limiting exercise. “We’re not a retailer and we’re not even just a marketplace,” says Neves. “We’re a tech enabler to an entire industry.” You don’t have to take that at face value. Consider that Farfetch spends $200m on technology alone every year. Its Farfetch Platform Solutions division is a tech-driven department that builds white-label digital infrastructure for companies. Neves compares it to services offered, for example, by Amazon Web Services. Earlier this year, iconic British department store Harrods tapped Farfetch to build for it a new website and online distribution channels. Farfetch delivered with not only a ground-up designed and optimised website, but one that was meshed with complex payment systems. Harrods gained immense global digital reach almost overnight. “From day one, they could ship to the Middle East, for example, which is a major customer base for them. They could ship to China, Russia, and accept local payment systems too. Everything that we’ve built at a global scale is something that they inherited from day one and this is what makes it [Farfetch Platform Solutions] much more powerful than other solutions that are out there in the market.”
“We’re not a retailer and we’re not even just a marketplace. We’re a tech enabler to an entire industry”
Farfetch’s own reach into the Middle East has been an extensive one. It entered into the region by partnering with Dubaiheadquartered Chalhoub Group in 2018 and moved quickly towards building local teams and customising content including developing Arabic content for the region and onboarding homegrown brands. Neves says that Farfetch has been gaining new customers not just in the UAE, but also in the neighbouring markets of Saudi Arabia and Kuwait. While he does not break down the individual market share of these countries, he confirms that the region has been growing at a faster pace than the global average. “We have an extremely successful partnership with Chalhoub Group and they’ve given us incredible know-how and insights. We’ve launched a local team to support the VIP department which only has private clients – our highest tier of customers. We’ve launched a service called fashion concierge, where we can cater for any fashion desire that you may have. Even if it’s not on the Farfetch catalogue, we’ll hunt it down. We’ve had some of the biggest sales for private clients coming from the Middle East.” Farfetch has had a breakout year in 2020, irrespective of the metric you choose to focus on. Its Q2 2020 revenue skyrocketed 74 per cent year-on-year to $365m, it recorded a 48 per cent leap in its gross merchandise value to $721.3m, the number of third-party retailers crossed 1,300, and its gross profit margin rose 44 per cent. But the numbers that Neves is most excited about? The fact that the platform gained a whopping 500,000 new customers in Q2 2020 alone, on top of the two million it had going into that quarter. He says that it is the quality – “prime luxury customers” as he refers to them – of the new fans which is the real headline for gulfbusiness.com
Lifestyle / Fashion
Farfetch. The other big deal for his brand is the growth in app downloads over Q2. “[We’ve seen] 100 per cent growth in the in app downloads. App customers are much more resilient and sticky than web customers. If they have the app on their phone, you can send them notifications and communicate with the customer in a much more powerful way.” But it hasn’t been an entirely slam-dunk quarter for Farfetch with the Covid-19 pandemic raging globally. Many of the around 800 boutiques listed on it were immensely gulfbusiness.com
José Neves, founder, chairman and CEO of Farfetch
pressurised due to the lockdowns. In February, Neves says, the company had an entire campaign including shoots and editorial themed – ironically – around travel that was ready to go live. But during an earnings call on February 27, shortly after Italy had gone into lockdown, he realised that that campaign would
be tone-deaf and irrelevant and hence decided to launch a new SupportBoutiques campaign instead. SupportBoutiques involved Farfetch batting in the corner of these small-scale enterprises, many of which faced the prospect of shutting down entirely. It leveraged its advanced algorithms to rank these listings prominently and assisted with marketing and visibility across its social media channels, homepage, and app too. As Neves adds, the objective was always to “help the small guy.” October 2020 69
Lifestyle / Fashion
C
hina remains the golden goose for luxury brands, but it has also been a notoriously difficult market to penetrate. In 2017, China’s JD invested $397m into Farfetch, and Farfetch has since then invested by building data centres inside China and customising its technology, content and delivery platforms specifically for that market. But the gorilla in China’s market, and the clear leader there, remains Alibaba. “China is still the second-largest market for us. There are only two games in town in China – Alibaba and Farfetch – and that looks pretty good to me. If you tell me that there’s a $120bn market where there are only two companies that have a chance to win, I think that’s an extraordinary position to be in.” The market where Farfetch isn’t ready to play second best is one of its most important – the US. Last month, Amazon decided to enter the luxury e-commerce space and launched Luxury Stores, a move that Neves views as shortsighted. “They’re trying to solve a problem that brands don’t have. Brands have plenty of exposure in the West, through their own websites, through Farfetch, all our competitors, wholesale businesses such as Matches, Net-a-Porter and department stores such as Neiman Marcus, Bergdorf, all of which operate very good websites. If anything, the brands are over distributed in the US. “Also, a luxury brand needs to have luxury positioning. When I’m asked [if I am concerned about] brands going to Amazon, my question is why didn’t they ever go to Walmart? Walmart has had a more powerful position than Amazon actually. They never touched luxury, because luxury, independent of the power of the retailer, cannot be seen in those environments. It completely erodes the luxury value. And so for the same reason, they [luxury brands] do not at the moment want to be part of Amazon.” Farfetch has been pushing forward with its ‘Store of the Future’ concept. The concept which uses augmented reality and RFID-enabled clothing racks, among other features, merges seamless shopping between physical stores and online. In Q4 of this year, Farfetch will be relaunching the Browns boutique at a new location in Mayfair and will roll out a version two of its ‘Store of the Future’. Farfetch acquired Browns boutique in 2015 and Stadium Goods (which along with Christie’s auctioned the world’s most 70 October 2020
expensive sneakers, a $615,000 Nike Air Jordan 1 Highs from Michael Jordan a few weeks ago) for $250m in 2018. Neves confirms that while Farfetch is happy to excel in retail, distribution and technology, it has no intention of becoming a manufacturer. That’s where the NGG deal also plays a major role. NGG doesn’t own manufacturing factories of its own, but is closely involved with the manufacturing side of its business. This allows Farfetch to potentially offer designers the option to not just retail their brand, but to help coordinate their manufacturing too. Last month, Farfetch undertook a brand redesign across its logo (the Farfetch Fuse),
“There are only two games in town in China – Alibaba and Farfetch – and that looks pretty good to me. I think that’s an extraordinary position to be in”
website and app. It also unveiled an Open Doors fashion campaign alongside the newly updated brand identity. “Farfetch is a bigger business than we are a brand. If you ask consumers, we still have very low brand awareness. For me, the glass is half full. Brand (awareness) is probably our biggest opportunity.” To build on that, it is experimenting with targeted TV advertising for the first time – the decision to do so was made by the newly-appointed chief marketing officer Gareth Jones who joined Farfetch from eBay earlier this year. Listing on the exchange has ultimately given the Portuguese billionaire and signee of The Giving Pledge sufficient liquidity to recently launch The José Neves Foundation which will offer scholarships to postgraduate students in Portugal. It will also include an open database insight platform that uses 200 million data points to offer real-time updates about potential careers to university graduates before they decide which fields and companies to pursue. The current crisis meanwhile has allowed Neves to reflect on his own company and the culture that he perpetuates within it. “If you build a company around a strong culture, and the right values, people will respond effectively to a crisis no matter what you throw at them.” For a brand that just hit its highest-ever stock price in August, it’s as much a validation that Neves needs to know that he’s headed in the right direction. gulfbusiness.com
Lifestyle / Auto
A sacred spirit British carmaker Rolls-Royce unveils its second-generation of the Ghost saloon, a statement piece in luxury BY VARUN GODINHO
E
leven years is a long wait. But Rolls-Royce cannot be rushed. Although it took over a decade for the second generation of the Ghost to make its debut last month, the time seems well spent as the Goodwood marque completely overhauled the firstgeneration model. “The only components that we carried over from the first Goodwood Ghost were the Spirit of Ecstasy and umbrellas,” said Torsten Müller-Ötvös, CEO of Rolls-Royce Motor Cars at the time of its launch. And he may not necessarily be indulging in unhinged hyperbole. The new Ghost which is now 89mm longer and 30mm wider is built on an aluminium platform – a similar one used in the Cullinan and Phantom. Laser-welded aluminium has reportedly been used to make the doors too. Using aluminium in the doors reduces the amount of ambient sound allowed to feed through from outside into the cabin – that there are over 100kgs of sound-deadening material added to the car including
gulfbusiness.com
Over 10,000 man-hours were spent designing the Illuminated Fascia on the dashboard of the passenger’s side
in its wheels, doors and roof makes the interior incredibly sound-proof. A 1,300W Bespoke Audio System meanwhile will offer all the sound you require inside. Under that imposing hood of this all-wheel drive, you’ll find a 6.75-litre twin-turbo V12 engine which too is shared with the Cullinan. That engine produces 571PS of power and 850Nm of torque. The combination results in a claimed 0-100kph time of 4.8 seconds and a top speed of 250kph. A camera-system scans the road ahead and automatically adjusts the suspension, while a satellite-aided transmission system provides a plush ride quality. While you’d be right to point out top speeds and torque aren’t primary selling points for Rolls-Royce that prides itself on craftsmanship, luxury and its ability to bespoke a car to match a client’s vivid imagination, the taste for a Rolls-Royce has itself evolved over the last decade. It says that the average age of its customer has now dropped to 43 – meaning that not only are these customers likely to be within the driver’s seat actively engaging the eightspeed automatic transmission, rather than in the well-appointed rear seat, it also means that performance is a major talking point. It’s not to say that the interiors aren’t as well-curated as a designer apartment. Wood, leather, and metals are all of the highest quality – as you’d expect from Rolls-Royce – but a special shout out (or a gentle whisper, for this is a Rolls-Royce after all) must be reserved for the Illuminated Fascia. Developed over two years with over 10,000 man-hours spent on that detail found in the passenger side of the car on the dashboard, the fascia consists of 152 tiny LEDs mounted on it, each of which has a colour to match the instrument dial lighting and clock. Inside, a new Micro Environment Purification System channels all the air entering the cabin through a nanofleece filter that can remove “all ultra-fine particles” from the cabin in under two minutes. It’s primed for the conditions we find ourselves in 2020, in more ways than one.
“The only components that we carried over from the first Goodwood Ghost were the Spirit of Ecstasy and umbrellas” October 2020 71
Lifestyle / Auto
A class act
Mercedes-Benz has launched the seventh generation of its flagship S-Class, demonstrating its worldview of a car that merges the concepts of uber luxury and next-generation technology BY VARUN GODINHO
I
t’s not incorrect to say that Mercedes-Benz is a brand built around the S-Class. Recently, it unveiled a EUR730m Factory 56 in Sindelfingen to begin production of its seventh-generation S-Class model which has been its flagship offering since the seventies. When you’re ready to invest nearly three-quarters of a billion euros, future intent becomes crystal clear. The new S-Class features an aluminium hybrid bodyshell. As a stately saloon, it has considerable road presence. The longwheelbase model is now 34mm longer than the outgoing model, 55mm wider and 12mm taller. As Britta Seeger, a board member at Daimler AG and head of marketing and sales at Mercedes-Benz recently told Gulf Business, Asian markets prefer the longwheelbase version as nine out of 10 of its customers there are chauffeured. In the Western and American markets, however, customers prefer to drive themselves and hence opt for a shorter wheelbase variant. For those in the driver’s seat, there’s much to be had with the six-cylinder 2.9litre in-line engine that is being offered at launch with the S450 and S500. With a power output of 367hp and 435hp respectively, they also produce 500Nm and 520Nm of torque, which result in an average 0-100kph time of 5.1 seconds and 4.9 seconds – helped of course, by the ninespeed automatic gearbox. Both models get a 22hp boost under acceleration due to the EQ Boost thanks to an integrated starter generator. Another upcoming hybrid version of the S-Class will also be able to deliver 100km of electric range. Mercedes added that a V8 version of the car with a 48V mild-hybrid version will follow shortly. Seeger confirmed that plans are afoot, expectedly, to launch an AMG
72 October 2020
Clockwise from top: The seats offer 10 massage programmes; The new S-Class will be available in the Middle East from January 2021; Mercedes has increased the computing power of MBUX by 50 per cent
version of the S-Class, and an eagerly anticipated top-drawer Maybach variant too. “Since we launched in 2015, the S-Class Maybach has been a huge success with more than 50,000 units sold since then. We will launch the Maybach this year, with additional distinctive features that will be available on the to-be-launched S-Class Maybach,” says Seeger. While the Maybach version of the S-Class will make its appearance later in the year, the existing S-Class we now have doesn’t skimp on luxury. For example, it features a new 4D 30-speaker 1,750 watt Burmester high-end audio system. The fourth-dimension effect comes by way of the bass, which apart from the 400 watt subwoofer, is also fed through the pores of the seat through built-in vibrators. Each of those seats, by the way, are controlled by 18 individual motors and have 10 different massage options – it beats business class seats in an aircraft by a long way.
But for a passenger within the car, one of the biggest highlights will be the revamped user interface – the MBUX. Mercedes says that it has increased the computing power of MBUX by 50 per cent compared to the outgoing model. There were reportedly over 30 million lines of code written by hundreds of engineers as they fine-tuned the processes of the car that go far beyond changing the cabin’s ambient lighting or turning down the AC. Mercedes has eliminated 27 analogue controls from the car and replaced them with gesture controls and swipes – a gesture can be used to open the sunroof, or with only a swipe, the driver can transfer the entire infotainment display from the front console to the rear-seat passenger’s screen. One of Mercedes’ biggest strengths with the MBUX was to make the system compatible with 27 languages – Arabic included – activated with a straightforward “Hey Mercedes”. It has a natural language understanding feature that allows it to be properly conversational and pick up dialects and pronunciations. No more bloopers of the infotainment displaying the nearest public washroom on the screen, when all you asked was to turn up the music volume. The MBUX goes further too. By way of an MBUX Smart Home function which uses WLAN and sensors, you can ask Mercedes to check the temperature of your home and whether you left the electric kettle at home on, all while seated in your car. In China, the MBUX is also being made compatible with payment gateways to allow customers to, for example, order food or groceries, buy movie tickets and even make restaurant reservations from their MBUX itself. The decision to offer unique features to the Chinese market is a conscious one – considering that China is S-Class’ biggest market. “The strongest market for the S-Class are, in order, China, US, South Korea and Germany. In China, we find the youngest customer segment [with an average age of] around 40. Many of them are first-car buyers, and are into new technology,” explains Seeger. She adds that in South Korea, the S-Class is particularly strong with women, with every fourth S-Class customer in the country being a woman. The other top markets for the S-Class – the US and Western Europe, especially Germany – show steadfast customer loyalty, with between 70-80 per cent of the car’s buyers there previously owning a Mercedes. gulfbusiness.com
Lifestyle / Auto
A
s noteworthy as Factory 56 is, so is Daimler’s Immendingen test track facility that was built in 2018 with an investment of
EUR200m. Spread across 520 hectares, it is here that Mercedes has tested not only some of its most significant safety features (the body of the S-Class automatically rises by 8cm when it detects an imminent side crash, besides deploying rear seat passenger airbags), but is also where it has been testing its autonomous driving capabilities. Seeger confirmed that they have received regulatory approvals to activate the new S-Class’ Level 3 autonomous driving capabilities on German roads starting next year. This will allow autonomous driving on public roads at speeds of up to 60kph. The car is equipped with the technology of up to Level 4 autonomous driving, which allows it to self-park in public garages. However, she cautioned that getting necessary regulatory approvals from governments around the world can be a tedious task and might delay the rollout of Level 3 or Level 4 technologies in several markets. But Seeger says that for highest Level 5 of complete autonomous driving, Mercedes has plans beyond its passenger car fleet. gulfbusiness.com
One of Mercedes’ biggest strengths with the MBUX was to make the system compatible with 27 languages – Arabic included
“We have a very clear strategy and logic for the use cases [of Level 5]. One use of Level 5 is less on the passenger car side in crowded city traffic, but a higher use case in our trucks for hub-to-hub delivery.” A fully autonomous S-Class isn’t a nearterm priority, but a fully-electric flagship sibling for the S-Class definitely is. The new EQS with a promised range of around 700km will make an appearance in 2021. Will the S-Class then finally meet its ultimate competition, and that too from a sibling? “We’ll give a lot of S-Class DNA to the EQS, but in addition we will also show a new interpretation on the interiors and exteriors and include additional features exclusive to the EQS,” Seeger notes, quickly adding, “the S-Class and EQS will not cannibalise each other”. “The S-Class stands for the core of Mercedes-Benz – it is the tradition and heart of Mercedes-Benz.” The new-generation model makes that abundantly clear. October 2020 73
Lifestyle / Horology
The Crown When the world’s largest selling luxury watch brand unveils its newest collection – Covid-19 notwithstanding – it’s time to sit up and take notice. Here are some of the exceptional pieces from its 2020 collection. Rolex has its eyes on the horizon, not the foreground BY VARUN GODINHO
Submariner Commit to memory: Twelve-forty-sixty. If there is just one reference number you need to memorise for the rest of this year, let it be the new no-date Rolex Submariner 41mm Ref 124060. The Submariner, one of the world’s most iconic dive watches, was 74 October 2020
introduced in 1953. The last time though that this collection received a big update was in 2012 with the introduction of the ceramic insert bezel. The 2020 version of this Ref 124060 has had a noteworthy upgrade with a new size, wider bracelet and also a never-before-seen movement.
For the first time, it is now available in 41mm, up from the previous 40mm. Yes, it’s an incremental increase in size, but that has warranted slimmer lugs, reworked crown guards and a wider lug width. Between those lugs is an Oystersteel bracelet which has a high surface hardness, great lustre, and is significantly resistant to corrosion compared to the 316L stainless steel you’ll find in several other timepieces. The black lacquer dial with white gold used on the indexes and hands, the Mercedes hour hand, the cerachrom bezel with the numerals and markers coated in platinum are all familiar sights, but it’s what is beneath that makes the Ref 124060 a truly breakthrough timepiece. Rolex has inserted a brand-new Calibre 3230 movement which features its Chronergy escapement that increases energy efficiency by 15 per cent and is paired with a Parachrom hairspring. It’s gulfbusiness.com
Lifestyle / Horology Right: Bright dials, like in this year’s Oyster Perpetual, have been a firm favourite in the Middle East
Oyster Perpetual
resulted in a nearly 50 per cent jump in power reserve compared to the previous generation of the Submariner. The automatic-winding Ref 124060 boasts of a 70-hour power reserve (as opposed to 48 hours previously). As a Superlative Chronometer Certified timepiece, not only is it COSC-certified by meeting the -4/+4 seconds accuracy requirement, but goes one step further and is additionally certified by Rolex’s own in-house department which requires a timepiece to be double as accurate – hence Superlative. Any given day, the timekeeping on this Submariner will not be off by over -2/+2 seconds.
Bright pops of colour have made it onto this year’s Oyster Perpetual 36mm Ref 126000. But before you imagine that Rolex might have gone off on a tangent, remember that bright dials have been a part of Rolex for several decades now. In the seventies, it introduced the Stella dials – bright hard enamel dials that, interestingly, were heavily marketed towards Middle Eastern clients. While those Stella dials didn’t prove immensely popular beyond the Middle Eastern and Asian markets back then, it seemed ahead of its time. There were a few of them created and today they’re a highly collectable timepiece able to command significant amounts at auction. This year’s collection has dials in green, yellow, coral red, turquoise and pink. Vanity aside, the Oyster Perpetual 36mm is also fitted with the Submariner’s (and Rolex’s newest) Calibre 3230. If the 36mm feels a little too narrow for your wrist, the watchmaker has also introduced a Ref 124300 Oyster Perpetual 41 that also sports the Calibre 3230. With brand-new cutting-edge movements, the only thing entry-level about the new Oyster Perpetual collection is actually its price point.
Sky-Dweller The Sky-Dweller is Rolex’s most complicated timepiece, and this year the precious-metal cased collection is, for the very first time, being combined with an athleisure-primed Oysterflex bracelet. The Sky-Dweller was previously only available with a leather strap or an Oystersteel bracelet. The Oysterflex bracelet comprises of flexible metal blades that are made from a titanium and nickel alloy. The strap is also kitted with the Rolex Glidelock system which allows for easy and rapid resizing without any tools. The new Sky-Dweller collection with an Oysterflex strap has options of 18k yellow gulfbusiness.com
gold and Everose gold cases as well as dial variants of black, white, champagne and chocolate. The Calibre 9001 remains unchanged and has 11 patents backing it. Supporting a dual-time and an annual calendar, the automatic timepiece still has a power reserve of 72 hours. Like the Calibre 3230, this Calibre 9001 too features an in-house developed blue Parachrom hairspring, which is comprised of 85 per cent Niobium and 15 per cent Zirconium, combined at 2,400-degrees celsius. According to Rolex, Parachrom hairsprings are 10 times more precise than traditional hairsprings. Another example of Rolex flexing its horological muscles, without really flexing at all. Typical. October 2020 75
Lifestyle / Horology
A timely craft From September 9-13, several leading brands descended on China for Watches & Wonders Shanghai, the year’s first on-ground luxury watch exhibition. Here are some of the finest pieces to emerge from Shanghai’s West Bund Art Centre
five complications: a tourbillon, perpetual calendar, fusée-and-chain mechanism, a chronograph and a rattrapante function. All of these are housed within a 43mm case, a fitting anniversary tribute to a watchmaking titan who altered not just the trajectory of a nondescript region in Germany, but also revived the country’s artisanal crafts.
Panerai
BY VARUN GODINHO Submersible Goldtech Orocarbo 44mm
A. Lange & Söhne Turbograph Perpetual Honeygold “Homage to F.A. Lange”
Roger Dubuis Excalibur Superbia
Roger Dubuis isn’t a brand that attempts to mask or downplay its chutzpah – and it has little reason to do so with it being the only watchmaker to have 100 per cent of its timepieces Hallmark of Geneva-certified. This year’s Excalibur Superbia was conceived in collaboration with Japanese interior design specialist Kaz Shirane, and features 600 white diamonds and blue sapphires. The case of this 45mm watch alone has 238 tetrahedron-cut stones. That each of those stones meet every other stone in six-seven places made the task of setting it on the case alone a 420-hour job. But don’t let those bright stones of this one-off timepiece distract from the fact that this watch also features an all-new doubleflying tourbillon movement, RD108SQ, with a 72-hour power reserve. As you peer through the open-worked dial, try and find the words “Memento mori” secretly inscribed somewhere on that movement. Translated from Latin, it means: “Remember you must die.” With this watch, it is beyond doubt that the beholder will have lived more than a full life. 76 October 2020
It’s a tough year for watchmakers to market their concept of luxury watches – but Saxonian watchmaker F.A. Lange didn’t have it easy either when he started his company in the impoverished mining town of Glashütte in 1845 with a team of 15 apprentices. Now, 175 years on, for a watchmaking house whose reputation has been forged in the core of a furnace, it won’t have much trouble in drawing attention to the Turbograph Perpetual in Honeygold. The 18-carat Honeygold dial has been given a black rhodium treatment, with the dial consisting of five layers including the dial ring, the sub-dials and main dial. The L133.1 movement meanwhile comprises of
Carbon, gold, titanium and platinum – the watchmaker brings all of these materials together in this 44mm timepiece with an unmistakable silhouette. The case is made from goldtech, a proprietary material which is an alloy of 75 per cent gold and 24 per cent copper, along with 0.5 per cent of platinum – a material from Panerai’s experimental Laboratorio di Idee department. The bezel, the crown and the crown bridge lever are made from carbotech, another proprietary material that consists of carbon sheets layered and fused. The dodecagonal screwed titanium caseback protects the in-house P.900 calibre with a three-day power reserve at depths of up to 300 metres. Visible on the caseback is an image of the manned torpedo missions with navy divers astride it – Panerai was, after all, a brand that was exclusively available to the military until the nineties when it became available to civilians.
gulfbusiness.com
Lifestyle / Horology
IWC Portugieser Chronograph with Stainless Steel Bracelet
Every year, the Schaffhausen watchmaker overhauls one of its six families of timepieces – this is the year of the Portugieser. In April, IWC released a tourbillon retrograde chronograph, a perpetual calendar and even a time-only 40mm automatic model. But it wasn’t until Watches & Wonders Shanghai that it showcased this Portugieser Chronograph with a stainless-steel bracelet. The chronograph made its way into IWC’s Portugieser collection over two decades ago, but for the first time, it is now offered with a stainless-steel bracelet. The new 41mm timepiece, which is fitted with a stainless-steel case, silverplated dial gulfbusiness.com
and blue hands, features an automatic winding IWC-manufactured 69355 calibre with a column-wheel chronograph, which has a power reserve of 46 hours. Recently, IWC launched a virtual boutique experience for customers in the Middle East which is based on its concept at The Galleria Al Maryah Island shopping centre in Abu Dhabi. You can click on displays, compare products and book viewing appointments too.
Vacheron Constantin Overseas Self-winding in Pink Gold
From resort wear, to tuxedo to office smart casual – typically, you’d rely on three different watches, each with a different strap to
match the occasion. But bringing in versatility and allowing you to toggle between three different looks is this new Overseas Selfwinding in pink gold which comes with three interchangeable straps: blue rubber, blue alligator leather and a pink gold bracelet. The Overseas collection has its roots in the Ref 222 from 1977. While other timepieces from the Overseas collection have evolved to include several complications, this new time and date model is closest in its appearance and appeal to that of the original Ref 222. Like the 222, it too features a slim case, thanks to a 4.7mm thin automatic winding 5100 movement. Just beyond the 22k oscillating weight in the caseback, you’ll catch sight of that exceptional finishing on the movement which has earned this watch a Hallmark of Geneva certification. October 2020 77
0CT
The SME story
20
A dedicated hub for the regional startup and SME ecosystem
INTERVIEW
can do so very quickly and make decisions independently when it comes to course-correcting. Which are some of the major projects you have undertaken?
The big business idea Two Dubai-based SMEs – event management company Ispirex and wellness centre Atmanan – both opened in 2019. Here’s how they are dealing with the crisis and planning ahead
What did you do before you became an entrepreneur?
I was the head of project management and production for GES Middle East. For more than 15 years, I had a dream of starting my own company. I worked hard during the past years in Jordan and the UAE to increase my knowledge, skills and network to make this dream come true. It wasn’t easy to gain this knowledge and experience, but ‘passion’ is the secret word that helped me make this move and establish the company in 2019 with my business partner Jaison Joseph.
Do you have expansion plans in place?
Based on the latest updates in the market and the support from the government and its entities, we have a plan to focus our operations in the UAE and Saudi Arabia. Inspirex already worked with Flow Events in delivering their project at Diriyah Oasis during Riyadh Festival from October-December 2019. Our scope of work was mainly onsite project management and operations during the build-up, the actual event period and then dismantling it. We are now working with other IT companies for solutions that can be adapted into our industry.
What is the concept behind Inspirex and what services does it offer?
Inspirex is an exhibitions’ design and build events contracting and project management company offering services to firms and individuals in different sectors. With our local, regional and international experience, we identify each client’s specific requirements and come up with the most effective and creative solutions to meet their business objectives.
What will be your measure of success to realise you’ve accomplished your initial targets?
What is the USP of your business?
78 October 2020
How has your business been impacted by Covid-19?
It has not been easy in 2020. Our business plan is to pass 2020 with the lowest costs and expenses until the market situation recovers. The Covid19 pandemic affected our industry very hard. However, we first made sure that all our suppliers got their payments without any delays. Maintaining that relationship with our suppliers was very important. Our clients and partners were very supportive too, and we kept communication open with them to understand how their requirements have changed. It was a good time for us to learn new skills that will help us in upgrading our business solutions to our clients.
Haitham Canawati Managing partner, Inspirex
It’s a small established company built on a dynamic and capable team, able to adapt to the market changes and requirements. Unlike bigger companies that are prone to bureaucracy when making decisions to alter their course, a startup like ours
We have worked with many clients, such as Aura Living, Leem, 57 Boutique – The Dinner Club, MP3 International and others. We have done an event management project with DC Aviation for the launch of their new warehouse in Dubai South with around 200 people in attendance, during which we looked after everything from the concept, execution and delivery across all areas including entertainment, physical setup, catering and production.
Haitham Canawati, managing partner Inspirex
Our company was established in July 2019 and we began with strong projects. In 2020, we expected to increase that by 30 per cent, but unfortunately due to the Covid-19 pandemic, our sales revenue gulfbusiness.com
The SME Story
all aspects of mind, body and energy, and aligns these to unleash the true powers within each of us. Give us a sense of the scale of your business and the potential to scale it.
I don’t look at this initiative as a commercial project which needs scalability. If this initiative can make a lasting change for even one human a day, my mission for that day is achieved. How has your business been impacted by Covid-19?
dropped significantly. In 2021 though, we hope to increase our revenues by 50 per cent over 2019 because of the expected support from the government and its entities to the events and exhibitions industry, and because of events such as IDEX 2021, MEBAA, Dubai Expo, Dubai Airshow and ADIPEC. In 2022, we expect sales to be back to normal and to grow another 30 per cent.
Inspirex worked with DC Aviation for the launch of their new warehouse in Dubai South
Anita Raina Founder and CEO, Atmanan Wellness Yoga Centre
Do you have expansion plans in place?
We will be shortly launching Ananta, which is our corporate wellness programme. If the client wants that the goals of their employees are better aligned with the organisation but find them low on energy, they can opt for their employees to undergo this programme. We are also launching our Ananda programme which is focused on children between the age of 6-18, and project to increase our enrollment by 10 per cent this quarter, i.e. 50 kids. For the FY year 2021, our target is to reach a minimum of six major schools. For Ananta, we plan to reach at least five major corporates by next year. Over the next couple of years, we also intend to reach out to Abu Dhabi, Sharjah and Ajman.
What did you do before you became an entrepreneur?
I am a chartered accountant by qualification and an ex-corporate banker. I’ve previously worked with Oman International Bank and Gulf International Bank for 25 years. Having experienced corporate success, coupled with the frustrations and angst that comes along with it, I always had that feeling of emptiness and felt I was seeking something more. Many courses and experiences later, it became apparent that for me to really enjoy the outer world, I would need to go that much inwards and clear up emotional baggage and limiting beliefs. Now, after spending more than five years getting trained as a Reiki healer, neuro linguistic programme practitioner and hypnotist, and having helped hundreds of people to find their real-self, I started this venture in 2019 with the core philosophy of bringing about life enhancements for the society at large. What is the concept behind Atmanan Wellness Yoga Centre?
To offer people complete inner wellness programmes that combine life coaching, Isha Hatha Yoga, meditation, nutrition, lifestyle changes and goal-setting modules to enhance their overall wellbeing. What is the USP of your business?
There isn’t a programme similar to ours in the market. It’s a wholesome programme which covers gulfbusiness.com
Like all businesses, my initiative has also been adversely impacted by Covid-19. We were planning to launch our Ananda programme in March, but then the lockdown was declared, which ensured that no one would venture out of their homes - and rightfully so. Some of the activities like life coaching have moved online and we have done a lot of pro bono work for people who were finding it difficult to cope with such challenging times and didn’t know how to deal with the stress and anxiety. But not all programmes, such as Hatha Yoga, are as effective online as opposed to when it’s delivered in person. Hence we have opened our doors with Covid precautions in place and accept small batches. We have implemented various safety practices including sanitising the institute after each class and maintaining the required distance at all times.
Anita Raina, founder and CEO of Atmanan Wellness Yoga Centre
Atmanan Wellness Yoga Centre is launching a corporate programme, Ananta, and another one focused on children October 2020 79
The SME Story SME REVIVAL
Lending support SME Revival: A peek into the expert panel that will select the finalists this month
M
otivate Media Group is set to reveal the beneficiaries of its SME Revival initiative, which will provide US$1 million in advertising and marketing support to 20 homegrown UAE SMEs. The Gulf Business team has assessed all the entries and passed on the shortlist to an expert panel, which will deliberate and choose the finalists. The panel includes:
BADR AL-OLAMA Executive director, Mubadala Aerospace
Badr Al-Olama oversees the key portfolio assets of Mubadala Aerospace including Strata Manufacturing, Nibras Al Ain Aerospace Park and Sanad Group. As the former CEO of Strata, he was instrumental in positioning the company as a global tierone supplier to both Airbus and Boeing. AlOlama heads the organising committee for the Global Manufacturing and Industrialisation Summit, is a board member of EDIC and the UAE Space Agency, and a member of the UAE Ministerial Council focused on the Fourth Industrial Revolution. IAN FAIRSERVICE Founder and managing partner, Motivate Media Group
Having launched the UAE’s first magazine in June 1979, Fairservice set up his media business, Motivate Publishing, over 40 years ago. Together with his partner HE Obaid Humaid Al-Tayer, he has overseen the company’s growth into one of the most successful media houses in the region. With a diverse media portfolio spanning magazines, books, digital, events and cinema, Motivate now has a network of offices across the Middle East and several successful joint venture partnerships. 80 October 2020
DR AMINA AL RUSTAMANI Executive board member, director and COO, AW Rostamani Group
Dr Amina Al Rustamani oversees group HR, IT and strategy functions at conglomerate AW Rostamani Group, and also serves as the CEO of AWR Properties. One of the UAE’s most prominent businesswomen, she also serves as a nonexecutive board member at HSBC Bank Middle East Limited, Al Jalila Foundation and Sandooq Al Watan. An acknowledged authority on wireless technologies, her contributions have been published in several publications and journals. AHMED RAMDAN Group CEO, Roya International
The founder of GCC hospitality advisory firm Roya International, Ramdan’s expertise covers all aspects of hotels commencing from concept to preopening to managing properties. He has led the company to serve as a key advisor for major masterplans such as Dubai International Financial Centre, Dubai Media City, Reem Island and Saadiyat Island. Prior to starting Roya International in 1998, Ramdan held senior positions in Emaar Properties, InterContinental Hotels, Le Meridien Hotels & Resorts and Forte Grande Hotels.
MONA ATAYA CEO and founder, Mumzworld
Having launched Mumzworld in 2011, Ataya has managed to grow the e-commerce site to a brand that reaches more than two million mothers across the region with over 250,000 products. Mumzworld has received six rounds of funding and is currently the number one funded women-led e-commerce company in the Middle East. Ataya is on a mission to “change the region, one mum at a time”. HAMDI A OSMAN Chairman, CEO and director, Ho Holding
A veteran in the Middle East logistics industry, Hamdi A Osman currently leads Ho Holding, which has diversified operations in the UAE and Tunisia. Previously, he served as the senior vice president and CEO for Europe, Middle East, the Indian sub-continent and Africa at Federal Express (FedEx). A former president of the American Business Council, he is currently a board member and investor at various organisations including Okadoc, Realopedia, The Health Bank, Innoventures Educational Investments and Global Ventures. DONNA BENTON Entrepreneur and founder, The Benton Group
Having launched the Entertainer app in 2013, Benton drove its transition from a print publication to a datadriven technology firm. Under her leadership, the Entertainer contributed $1.3bn to the economy and experienced 25 to 30 per cent profit growth each year. She has also established holding company The Benton Group in Dubai, which invests in businesses with the potential to scale. Its latest addition is Caha Capo, which creates swimwear and accessories for women, men and children. gulfbusiness.com
The SME Story COMMENT
Anisha Sagar General manager, Business Incorporation Zone (BIZ)
Five potential startup costs that are easy to overlook Entrepreneurs should ensure they look extensively into aspects such as insurance and marketing
I
t’s unlikely an entrepreneur is going to completely overlook an essential cost – most of what you encounter should have been planned for ahead of time. But what can be difficult is just how these costs can expand into areas that you hadn’t anticipated. And how one cost can then overlap onto another. So let’s look at five costs which you assumed had been covered, only to realise that it goes a little bit deeper than first imagined. BUSINESS INSURANCE
ILLUSTRATION: GETTY IMAGES/STOCKBYTE
When it comes to insurance, it’s important to get the right advice for your particular company’s needs, ensuring that you are successfully mitigating any future risks. Here are a few key areas: Group health insurance: Health insurance is mandatory for all employees in your UAE business, but there are many different options. Finding the right insurance to suit both parties is critical. Group life insurance: A group policy will cover all employees under a single master policy, and can include compensation in the event of the death of
gulfbusiness.com
THOUGHT LEADERSHIP CONTENT IS A GREAT WAY OF SHARING YOUR EXPERTISE WITH YOUR FUTURE CUSTOMERS
an employee, as well as compensation for critical illness and disability. Workmen’s compensation insurance: Without the right cover, the employer is required to provide compensation and funds to cover medical bills and loss of earnings should the worker suffer occupational injury or disease. Policies may also include: work-related death, disability, medical and repatriation expenses. Public liability insurance: This is important if you have customer visits or interactions with the public, off-site work, or have access to client equipment or hold external assets. Office insurance and more: This helps protect against physical damage to office buildings and contents, and you may also consider business continuity insurance to cover against loss of profits and increased costs if you’re unable to do business as normal. ADVERTISING AND MARKETING
You may have already put aside some money for marketing, but the question is how that money is going to be used and whether you can be sure that you’re maximising your spend. While taking out adverts may be part of your strategy, it’s also important to consider other avenues. Thought leadership content (ie, content marketing) is a great way of sharing your expertise with your future customers. If you’re a natural writer, you may find you can do the odd blog post yourself. But this will soon get in the way of running your business, so it’s best to engage a specialist content agency. It’s easy to think of this as a luxury, but it is an essential cost. A strong marketing campaign, including both written and visual content, is going to be an efficient way of introducing your company and your product/service to your customers. It will also October 2020 81
The SME Story Strong start help sales, nurturing warm leads until they’re ready to purchase. Content isn’t a replacement for the usual digital advertising approaches. Rather, it’s a way of supercharging it to ensure you’re getting the most for your money.
In the first half of the year, MENA-based startups raised 95 per cent of 2019’s full year funding Well funded Mega deals
Undisclosed funding estimate
IN USD
Disclosed funding
$693m
$659m
OFFICE SPACE 100m
This may feel all under control if you’re launching your startup from your kitchen table. But what happens when you hire your first employee, or you need to take a business meeting, or your partner can’t stand you cluttering up the kitchen or spare room? Quite quickly an expense which you didn’t anticipate comes knocking. There are a number of solutions here: • Co-working space • Flexi desk • Fixed desk • Office Whichever you choose, ensure that your contract is flexible and you can scale up or down as needed. The good news is that with many of these spaces, meeting rooms and cafés are also on-site for your use, cutting down the need for you to buy furniture and bring in catering. It also means that you get a certain amount of support – particularly technical – should there be issues with the internet, printing, and other business services. Another benefit of a co-working space is you meet likeminded startup founders, possible future collaborators and even potential employees. PROFESSIONAL CONSULTANTS
At times, you just need to ask a professional. Whether it’s setting up your UAE startup or just needing advice on an area where you don’t have expertise. Hence it’s important to ensure you budget for consultations with accountants, lawyers and company setup specialists. Accountants are particularly important as a good one can help you navigate what could be quite complex regulations. They will also be able to advise on benefit programmes for your workforce, to ensure you are complying with the UAE laws.
30m
82 October 2020
95% of 2019 total funding
536m
479m
2019
H1 2020
The investors 27% of investors have indicated that they shifted their focus to industries that are more ‘positively impacted’
144
33% of them had not previously invested in the region
institutions invest in MENA-based startups
31% of investors came from outside of the MENA region
Leading the pack UAE and Egypt are at the forefront when it comes to value and volume of deals SHARE OF FUNDING
SHARE OF DEALS
59% UAE
SETUP FEES
You may be inclined to ‘go it alone’ when it comes to setup, but paying a company formation specialist will help. They can provide advice on your licence application, assist with the opening of corporate bank accounts and suggest the most appropriate financial institution to suit your specific needs. They may also offer visa and immigration services and can handle all government formalities, permissions, work permits and visas applications.
150m
57m
25% UAE
$659M FUNDING
15% KSA 7% Rest of MENA
25% Egypt 251
14% Rest of MENA
DEALS
18% KSA
19% Egypt 6% Jordan
12% Oman
SOURCE: MAGNITT H1 2020 MENA VENTURE INVESTMENT REPORT
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