* Qatar is second largest duty-free operator in GCC with revenues of $600mn recorded in 2022, an increase of 74.5% from the previous year
Qatar’s wholesale and retail trade grew at a CAGR of 12.3% between 2015 and 2020 to reach $ 26.7bn, accounting for 15% of the GDP, Alpen Capital has said in its latest report.
High level of wealth coupled with rising population, an expanding tourism sector and high investments towards infrastructure development has positioned the country (Qatar) as a promising retail market in the GCC, Alpen Capital said in its ‘GCC retail industry’ report.
According to Alpen Capital, Qatar’s organised retail space is currently going through a period of rapid expansion, credited to a strong pipeline of projects in the build-up to several global sporting and business events that are set to take place over the next few years.
Qatar remains the richest country in the world with a GDP (PPP) per capita (at constant prices) of $95,273 (as of 2021).
Qatar is also regarded as the world’s fastest-growing luxury market as the country’s state-owned investments arm (Mayhoola) holds a majority stake in several high-profile fashion brands including the Italian company Valentino and French company LVMH as well as landmark department stores Harrods and Printemps in London and Paris, respectively.
Additionally, Qatar is the second largest duty-free operator in the GCC with revenues of $600mn recorded in 2022, an increase of 74.5% from the previous year.
The wholesale and retail trade contribution to GDP has remained stable over the years, indicating the growing importance of the industry within the economy, Alpen Capital noted.
Despite the Covid-19 pandemic causing business disruptions, Qatar’s retail industry fared well during 2020 as the majority of stores and malls were allowed to reopen by summer with a range of mandatory health guidelines in place.
During this period, the country witnessed several changes in consumer behaviour, especially in terms of buying patterns, spending trends, payment solutions, and utilisation of e-commerce platforms.
The use of e-commerce witnessed a significant boost as consumers were forced to stay at home and rely on online channels. As per the Ministry of Transport and Communications, about 60% of the consumers in Qatar signified a desire to shop online.
This led to the country’s retailers to restructure their strategy to incorporate online sales platforms, Alpen Capital noted.
Consequently, many retailers in Qatar have moved to a blended, omni-channel distribution strategy, which involves boosting and expanding their digital offerings while also maintaining a brick-and- mortar footprint.
However, the phased easing of Covid-19 restrictions in 2021 resulted in an encouraging return to pre-lockdown footfall levels in most retail malls.
Consequently, the country’s retail market is estimated to have recovered from the slowdown during the pandemic, due to overall economic activity improving during the first year of the pandemic while inflation remained in the negative territory.
Recovery can be attributed to the government’s initiatives to contain the pandemic, changes to the visa regulations, and an increased focus towards tourism as the country gears up to host several mega events. In addition to the FIFA World Cup 2022, some of the major international sporting events lined up to take place in the country include the Formula 1, TP Tennis Competition, International Golf Championship, the World Championship of Motorcycles, 2024 World Aquatics Championships, the 2030 Asian Games, European Tour Golf, and the MotoGP among others.
Apart from these, Qatar is also vying to host a variety of business forums and conferences as it seeks to establish itself as a business hub in the GCC. Moreover, it has been hosting several events in the run up to the FIFA World Cup 2022 – helping the industry recover from the lows of 2020.
Consequently, tourist arrivals in the country increased by 5% y-o-y in 2021 while total travel and tourism spending revenues reached $16.5bn, contributing 10.3% to the country’s GDP – the highest amongst the GCC nations.
“All these factors are estimated to have helped revive the retail industry in Qatar,” Alpen Capital noted.