Is VAT the biggest challenge for UAE luxury retailers in 2018?

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Interview: Hind Abdul Hamied Seddiqi, Chief Marketing and Communications Officer, Seddiqi Holding

Briefly tell us about your role in Seddiqi Holding, your core functions and what it’s like working in Seddiqi Holding?

I have been with the family business for 11 years now and have played a key role in creating the marketing department.

Being the chief marketing and communications officer at Seddiqi Holding, I oversee all marketing activities across the holding group and its subsidiaries, including Ahmed Seddiqi & Sons, 1915 by Seddiqi & Sons and Seddiqi Property, to name a few.

I am also closely involved in the overall business planning and strategy of Seddiqi Holding, focusing on the diversification of the family business.

It is a very exciting period to be part of the team as we continue to grow the business. We have recently established a new business unit, which we will be formally announcing soon.

Give us an overview of Ahmed Seddiqi and Sons, the number of stores you have, brands you deal with, etc.

Ahmed Seddiqi & Sons is the longest standing and largest business unit within Seddiqi Holding.

It has been one of the most successful businesses in the UAE for more than 67 years and is based mainly in Dubai and in the Northern Emirates.

Under the umbrella of Ahmed Seddiqi & Sons, we retail over 30 brands in the UAE, amounting to 90 percent of all Swiss watch brands, making us one of the largest distributors in the Middle East.

What differentiates Ahmed Seddiqi & Sons from other Swiss watch retailers is that we emphasise on relationships with our clients.

We create an environment in which they feel comfortable while selecting a watch, so they keep coming back to us.

We also retail fashion watches, jewellery pieces and accessories from international brands and designers through 1915 by Seddiqi & Sons, which is a subsidiary of Ahmed Seddiqi & Sons.

And do you also advise customers what brands they should wear?

We do not steer our customers towards buying a specific brand, but we definitely advise them.

Our sales staff are trained to understand what the client is looking for, their style and budget. We understand what the client’s need is and we cater to it.

What is the price range of watches sold at your boutiques?

In 1915 by Seddiqi & Sons stores, we have watches that start at AED 700, whereas in Ahmed Seddiqi & Sons boutiques, we have watches that go up to AED5 million.

And how has been your growth, year on year so far, and compared to last year?

It’s been good and steady this year. The beauty of watch business is that it has a captive and loyal clientele who keep on coming back to your store to buy watches that they have been waiting for.

Have the prices been impacted due to the prevailing economic condition?

At Ahmed Seddiqi & Sons, we regularly monitor the prices of Swiss watches compared to other markets and we do not set the prices on our own.

Our retailing model is based on an agreed price list with the brands, which keeps our prices aligned with the international level.

Have the operating expenses of your business gone up in the UAE?

The UAE, especially Dubai, is an expensive place to live in. That also makes retailing a high-cost business to run. Retailers have a number of overhead costs and the high rents are increasing the cost of doing business.

What is the profile of your customers especially the loyal customers that buy your watches?

At Ahmed Seddiqi & Sons we welcome customers from a range of different backgrounds and cultures, however, they all have one thing in common – an appreciation for luxury Swiss watches.

So what exactly do your customers look for — the product or the experience?

Most of our customers look for both. When it comes to the luxury sector, customer service plays a key role in the overall journey, particularly in the watch industry, where the purchase being made is considered an investment.

That is why we focus a lot on customer service and continuously work to enhance it to deliver the best products and service to our customers.

Can you describe any challenges you are facing right now, and how has your marketing strategy been targeted towards these challenges?

Dubai is a hub and a centre-point for regional watch collectors and as a result we see a lot of watches coming here from all around the world. We have had feedback from people who had bought watches from the grey market not knowing that it has been stolen and has resulted in it being confiscated by the local authorities.

Sometimes, the customers pay the full retail price of the original watch in the grey market not knowing that some of the basic movements have previously been replaced with replica parts; they only find out when the watch is taken for service.

We always advise our clients not to take the risk and buy something without knowing the source of the watch, and to work closely with government authorities and the police anti-counterfeit department to keep a check on these practices.

It is always advisable to buy from an authorised dealer to make sure that the watch is authentic, legal, under warranty and has not been tampered with.

How do you expect 2018 to unfold?

We anticipate that digital marketing, including online, social and video, are going to remain crucial to marketers as we move into 2018.

We also anticipate an increase in investment in CRM systems, as they enable marketers to better understand their customers and adapt their strategies and tactics to better reach them.

And what is your biggest marketing allocation in terms of budget? Is it digital or is it still traditional like print?

Our marketing strategy is one that is defined by the luxury watch connoisseur who we target through various channels. Whilst digital marketing is an up-and-coming trend, we believe that traditional media campaigns still hold value. We divide our advertising budgets across print, outdoor advertising and digital, depending on the campaign.

What do you think your opportunities and challenges will be in 2018?

Many of the retailers are not familiar with the VAT and the new tax regime being introduced in the UAE. It is something that retailers in this market have not experienced before, therefore it will be interesting to see the its impact in business.

The interview appeared in the Dec 2017-Feb 2018 issue of Gulf Marketing Review.