Coronavirus: Dubai’s malls turn into fulfillment centers as online shopping explodes

A view shows the area outside the Dubai Mall following the outbreak of coronavirus disease in Dubai, on March 23, 2020. (Reuters)

Dubai’s famous retail malls have been shut for 10 days to slow the spread of coronavirus, but thousands of mall workers have been redeployed to cater to an explosion in online shopping, which has tripled almost overnight, retailers say.

Some of Dubai’s most famous malls, such as Mall of the Emirates, owned by Majid Al Futtaim Properties, and Dubai Mall, owned by Emaar Properties, are transforming themselves to “fulfillment centers”, where workers work throughout the night to keep up with online orders.

“It is uncharted territory. We had to rethink what we do and how we do it, but at the same time keep certain principles in play,” says Tracy S Faulkner, Chief Communications Officer at Majid Al Futtaim.

Majid Al Futtaim which runs 27 shopping malls across the Middle East, shut all its malls in the UAE on March 25. At the same time, its online business has seen a spike of 290 percent in the UAE, 700 percent in Egypt and 1,400 percent in Saudi Arabia.

“Our business across the region is actually in shutdown, except for our Carrefour (grocery) business. That is doing relatively well,” Alain Bejjani, CEO of Majid Al Futtaim said in an interview with CNBC.

The sudden shift has forced the group to transform many of its supermarkets and hypermarkets into fulfillment centers and redeploy more than 1,000 leisure, entertainment and cinema employees on a temporary basis to the Carrefour business, he said.

Emaar Malls, a subsidiary of Dubai’s biggest-listed developer Emaar Properties, has also announced the opening of a virtual store of Dubai Mall on noon.com, the regional e-commerce website.

“Unprecedented challenges call for innovative, collaborative and bold measures,” said an Emaar spokesperson. “The Covid-19 situation and its impact on the global economy call for us to rally our strengths and identify new measures that take into consideration the social and economic realities.”

Developers announce relief packages

To help retailers cope with the extended closure, some property owners have stepped in to announcing measures.
Mohammad A. Baker, CEO of Gulf Marketing Group, says landlords and retailers alike are facing exceptional challenges due to the coronavirus outbreak. “Dealing with fluctuations in consumer footfall, labor requirements, and rescheduled brand campaigns must be done together, with a shared sense of responsibility and agility,” he said.

He suggests retailers and landlords should renegotiate their long-term tenancy contracts considering the extraordinary conditions.

A man rides a bicycle past the deserted Gold Souq, a popular tourist destination, before the full lockdown, following the outbreak of the coronavirus in Dubai on March 28, 2020. (Reuters)

A man rides a bicycle past the deserted Gold Souq, a popular tourist destination, before the full lockdown, following the outbreak of the coronavirus in Dubai on March 28, 2020. (Reuters)

The recent announcement by Al-Futtaim Group, which employs 42,000 people across many sectors including retail, to set up a 100 million-dirham fund for rent relief is one example of what can be done, he added.

Dubai property developer Nakheel has announced a 230-million-dirham economic relief package for its customers due to the impact of the coronavirus pandemic, according to a statement posted by the media office of the Dubai government.

Green Community's Properties Investment is also supporting retailers forced to shut down due to the pandemic. Retailers in ‘The Market’ avenue in Green Community, Dubai Investments Park (DIP), will receive a three-month rent relief as a gesture of support during the Covid-19 pandemic, according to an announcement by developer Properties Investment (PI).

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Last Update: 04:14 KSA 07:14 - GMT 04:14
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