Luxury Retail Sector in Kuwait is Growing

Interview with Habib Koya, Commercial Director of Hussein Morad Behbehani

Tell us about the Kuwait retail market and sector. With the declining price of oil, what is going to happen to this market?

The retail market of Kuwait is really growing up right now. It has seen good growth and especially over the last 5 years we have seen tremendous changes. One of the biggest malls here is called The Avenues and has about 300 outlets. There is definitely no doubt about the potential here and that is the reason why we see more malls and more retail operators coming here. You name the brand and Kuwait is currently able to offer that brand; there are really only a few brands that are missing from the Kuwait market but I am sure they will be entering the market shortly. There is a new expansion plan coming off of The Avenues and new malls coming up in the Kuwait market. Thus retail has huge potential in this market.

Can you tell us more about the company itself and your strategy? How do you want to capitalise on these opportunities?

We always believe that when a good opportunity comes along you must grab it; unfortunately they don’t come along as often as you might like!

We are looking to be part of this great potential and we are participating in it. We have a big brand in the pipeline right now, currently being discussed and we might close on a couple of brands in a really short period of time. It is still too early for me to announce the principal brand at this stage; but they are a brand that the Kuwait market has been waiting for.

Our strategy is to be a leader in the market. Whatever we do we should be a leader in the market; that is what Mr Behbehani believes. He believes that you mustn’t try to do everything all at once but rather one thing at a time so you can be a leader in each one and then move further.

Today for example, if you take Vancleef and Arpels, one of the world´s best jewellery brands, our boutique is positioned globally in the top 5 in terms of sales, customer databases, boutique infrastructure etc.

What are the sorts of challenges you face in this business?

In every business there are challenges. The challenges make the job interesting, I wouldn´t really enjoy working if everything was easy and I had very little to do! There are challenges when it comes to customs clearance because there is a procedure involved that has been put in place by the government of Kuwait which needs to be respected by every company.

There are some challenges in this respect and perhaps the government will open up new doors to allow for a more fluid way of doing business. If we look at the challenges that we faced four years or so ago, we see that we don’t have to deal with them anymore. With every year we take steps forward in the retail business. The country is developing and it is supporting business.

You mentioned you are in the top 5 globally, what are some of the special characteristics of this market compared to other markets globally? How is a Kuwaiti customer different from other customers and how are you trying to fulfil their needs?

Kuwaiti customers know very well what their requirements are. The speciality of Kuwaiti customers is that whatever is new in the market, they want. In other parts of the Middle East that attitude is probably also there but particularly here in Kuwait we note that the customers want to have prestigious products. That makes it quite easy for our business and adds a lot of value to the retail sector. The spending capacity in the Kuwait market is definitely higher than in the other markets. What the Kuwaiti market doesn’t have is tourists; we don’t have the tourist crowd of Dubai for example.

There is not much for tourists to occupy their time with over here. In the future there might be opportunities for the government to come up with a strategy for that but for now there are no floating tourists in this country, people who come here come to work on business and then they go back. A very small percentage of people from around the world come as tourists to this country.

In terms of customer service where do you stand?

I can proudly say that here in our Kuwaiti showrooms we go the extra mile in terms of customer service. We try to exceed our customers´ expectations by offering outstanding service. Today if you talk about any industry, it is essentially a service. The better you serve, the better you get. It is like a game: the more you play, the more you win and the more you win, the more you play. We are doing very well. I believe the Kuwaiti market is being recognised for its quality service.

And for business development—what is the future?

As I mentioned, we are looking to introduce well-known brands from around the world.  

Do you think that such as saturated market can still accommodate new brands?

I strongly believe so. We did question with Vancleef and Arpels whether the market had the spending capacity to be able to introduce them into the Kuwaiti market. Today we are in the position where we are looking to introduce a second maison in Kuwait. That means the buying capacity is high in this market. I do think that there are customers here who if they love a product and the service then they will go ahead with the purchase.

Of course Kuwait is one of the richest countries in the world and so there is spending capacity here. The market is currently saturated with brands so it is difficult to stand out and be different. Is that a challenge for you?

Yes certainly. When the number of brands increases, the challenges do increase. However, we believe that with more competition in the market, the market´s capacity will increase. When more competitors come in, customers have more options to choose from. As I said earlier, a few years ago we didn’t have The Avenues shopping mall, today if you see

The Avenues it is like a world of its own right now and there is still more potential.

Kuwait´s buying capacity is increasing but people here are conscious of how they are going to manage their spending over the entire year. This awareness exists particularly because of the volatile price of oil, which does affect the market in that sense.

Can you tell us a bit about the Behbehani Group?

The Hussein Morad Behbehani Group was established 6 years ago. It was a strategic move in order to accommodate all the different brands under one umbrella. The decision was made by the management. I think it was a very good decision. Things are going very well; we have the majority share of the market. We have no less than 75 to 80% of the market share when it comes to high end jewellery and watches because in terms of high end jewellery you name it and the Behbehani Group has it, which is not the case with any other group. The Behbehani name is very well-known in the market. When Omega began 35 years ago, this group started the market here by franchising that brand in Kuwait. Thus the group is a pioneer in this market, bringing brands into this country.

Who do you consider to be your main competitors?

Our competitors are not currently in the Kuwaiti market. Our competitors are in Paris, London, and the States. Often product availability takes a certain time here because we are further away from where products are launched. Furthermore Kuwaitis travel around the world quite a lot. We don’t really consider that we have competition from any brand. We are good at what we do and we have the leading brand, it can´t be compared to any other. Every brand has its own identity and our brand has popularity in itself.

How do you approach the communication and marketing aspect in Kuwait versus what is going on globally with the brand?

I can say that in terms of media Kuwait is a market which depends 60 to 70% on social media. Today it would not be wrong to state that Instagram is being used in the Kuwaiti market more than in any other market. If you go to any of our brands and take a photo which you put on Instagram, that itself becomes marketing. Facebook is another big marketing tool which is being used in this market. At the same time there are leading magazines in the market, fashion or exercise magazines for example which are read by many ladies here. Magazines play a big role. However I would say that the most effective marketing tool in Kuwait is social media. With social media you have everything at your fingertips.

But your brand awareness came from Europe?

Yes. Well for Vancleef and Arpels, brand awareness is not necessary because as I said earlier it is one of the world´s top jewellers and the brand is advertised all over the world and we are exposed through these brands because they travel a lot.

Do you think that the upcoming crisis in oil markets might negatively affect the luxury market?

I can´t say no on that. Whenever there is any economic change in the market for example when the dollar price rises, yes of course it affects the market. Every sector today contributes to every other sector. We strongly believe that it is a chain and everything is connected; if the oil prices go up or down there is a variation in the dollar and that connects to gold and platinum etc. Of course there will be an effect but it will not crush our sales by 50, 40 or 30%, I don’t think. We don’t consider it to be such a threat. Over a period of time we will need to be cautious but it is not a great threat.

Kuwait has the disadvantage that it is probably the most dependant country on oil in the gulf whereas in the UAE there will always be tourism. Kuwait hasn’t managed to transform itself yet apart from with hydrocarbons.

As far as I understand it, Kuwait has enough petroleum to run the country for generation after generation. Also, the country is very well planned. I´m sure the government will plan ahead and organise their strategy. Comparative to other markets there is no other significant source of income here but as I say we have very good planning. When we read the newspapers we can read all about the strategic plan for the future.  I strongly believe that the future is secure.

You have been with the company for six years now, what is it like to work for?

I have been in this country for ten years now. This is my sixth year working for Mr Behbehani. The best part of working for the Behbehani family is that you don’t feel like you are working for a big corporate company; you feel that you are working for your own family. The company policy and philosophy is that you own this business; it is the bread and butter for your family so you had better take care of it. The targets and budgets have been fixed and so you have to stick to the green line. It is a family environment in terms of how the entire Behbehani family take care of their employees. There is a very personal touch. We are made to feel like we are running our own business. This is the philosophy that the family promotes. There is a lot of employee trust and loyalty.