Friday proved to be my first true introduction to luxury, Dubai-style.

For most of the morning, I explored two of Dubai’s largest upper-income malls: Burjuman and Wafi.

The Wafi is a celebration of everything that is over the top about Dubai. Arab fashion boutiques offering hand-stitched, made-to-order haute couture sit beside interior decorating stores (with all products made in limited editions, solely for individual outlets) and luxury European clothing and fashion shops, filling the mall with hundreds of high-end retailers, all within the context of an elaborate ancient Egyptian theme, replete with faux-Egyptian décor and a pyramid-shaped restaurant and spa (named, you guessed it, The Pyramids). The Burjaman mall was likewise crammed with one luxury product after another, from $1,000 sunglasses to $20,000 pearl necklaces.

After a morning surveying the luxury malls, I returned to the Mall of the Emirates to experience Ski Dubai, the first indoor ski resort in the Middle East. Ski Dubai boasts almost 250,000 square feet of terrain….however, out on the slopes, the place felt rather…tiny. With a capacity of only 1,500 people and a maximum run of around 400 meters, Ski Dubai is primarily a novelty attraction, aimed at beginners and tourists. When I visited, I was surprised by several things—not the least of which was the relative lack of crowds on the slopes (not to mention the Western pop music blaring in the background). I was also surprised by its affordability—at around $35 dollars for 2 hours of slope time, clothing, and equipment, it falls solidly within the budget of middle-income travelers. The mix of cultures was likewise not what I expected: though I did encounter one gaggle of Arab kids learning to ski, by and large the slopes were filled with European and Asian tourists. While interesting (and fun), it was not the luxury experience that I anticipated coming in.

After my meeting with FX Fowle, I went to visit Diera City Center mall, one of the major middle/upper-middle income malls in Dubai.

It was quite the eye-opener…with more than 370 stores, and parking decks that seemed like they could fit the entire Hyderabad airport (including a play area/arcade that I know for certain was several times larger than the entire departure waiting area in Hyderabad)….this thing was big, more than a little fancy, and also showcased an amazing variety of cultural flows.

The mall had everything—from a Carrefour and a Virgin megastore, to an 11-screen cinema, myriad restaurants and a massive food court (which, aside from the occasional Arabic lettering and prominence of Asian fusion, could fit right in at any American mall), and of course, more clothing, jewelry, and computer game stores than you could shake a stick at. It’s quite the popular hangout—on weekend nights (Thursday and Friday are the official weekend in the UAE), the taxi queues can run up to two or three hours!

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The flight from Hyderabad to Dubai lasted only four hours, which, compared to the five hours I spent waiting in the airport for my flight, wasn’t so bad! However, the shift from Hyderabad’s airport—where they offer to encase your bags in saran wrap, “just in case,”—to Dubai, a possible site for an S)T expedition on the future of luxury and leisure, was like jumping from a borderline World 2/3 country into World 1.

First up on the agenda in Dubai was a meeting with an architect from FX Fowle, a major international architectural firm involved in green building efforts in Dubai. They are contracted to design more than 7 million square feet of green buildings, in addition to a major automotive and metro bridge project across Dubai Creek. We had a very interesting discussion on sustainability and the future of Dubai—no small issue, given that to support its citizens, Dubai consumes more resources per capita than any other country in the world, including the US. The city is a monument to indulgence, luxury, and, thus far, utter disregard for ecological footprint or sustainability: for example, Dubai currently consumes a whopping 250 million gallons of water per day (around 97% of which is desalinated sea water) to sustain a city of less than 1.5 million people.

So you can see why I was curious to talk about sustainability with a green architecture firm recently brought in as part of Sheik Mohammed’s evolving future vision for Dubai. The Sheik rules Dubai as the head of its monarchy, and is the second most powerful man in the United Arab Emirates, after the Sheik of Abu Dhabi.

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On the last day of our BRIC Expedition: India, our group visited the new (not yet opened, still under construction) airport for Hyderabad, located in Shamshabad, about 30km southwest of the city center. It proved to be a fitting capstone experience for our group!

The new airport serves both as a shining example of the promise in India’s future, as well as a warning of the many challenges ahead.

The very reason for the airport’s construction showcases the rapid change occurring in Hyderabad (and, more broadly, in India as a whole): Hyderabad’s air travel increased by an astonishing 1,000% percent between 1999 and early 2008, growing from 700,000 passengers to more than 7 million passengers per year (Hyderabad’s existing airport, built decades ago in the city center, was designed to handle a maximum of 3 million passengers per year).

The new airport was built rapidly and is on track to be operational well ahead of schedule (and more quickly than the average construction time for airports of a similar class). Its runways will be the longest in India, and will be capable of supporting large jets, up to and including the A-380 Airbus. The airport’s initial capacity will be 12 million passengers per year, with modular design options able to expand this capacity up to 40 million per year if necessary.

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On Monday, while our compatriots were experiencing the luxury market, our team learned about the realities of the other end of the Indian income spectrum.

• Executives at ITC, a conglomerate with businesses in food, hospitality, and other sectors, briefed us on the company’s innovative efforts to boost rural incomes by eliminating middlemen and getting information direct to farmers. They are equipping contacts in thousands of villages with computers and providing weather forecasts, agricultural advice, and real-time price information. The latter is particularly important, as it gives farmers more power in the marketplace.
• They also discussed their chain of Choupal Sagar stores, which are interesting as a means for formal retail to reach into rural areas. The initiative requires pricing for the bottom of the pyramid—for instance, the stores sell individual candies beginning at half a rupee, or 1.3 cents.
• The Byrraju Foundation impressed us with its rural transformation initiatives, which are underway in hundreds of villages in the state of Andhra Pradesh. Programs range from in-village call center work to reverse osmosis water plants. Their media efforts were intriguing, including community television (in which unemployed youths get cameras and training, and make documentaries about local issues) and literacy karaoke, using popular songs to teach basic reading.

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On Monday, our expedition team split up—one team investigated bottom-of-the-pyramid issues, while the other went in search of high-end, luxury retail outlets. As one of us remarked, it’s quite possible that on this particular day our two sub-teams had about the most opposite experiences possible. This dispatch will cover the forays of our luxury group into the Banjara Hills district of Hyderabad, known as the place-to-be for the city’s up-and-coming class.

Our first visit was to a designer clothing store, Le Celebre, which offered everything from tailored Italian suits to custom-created saris and hand-made dresses, many of which would not be out of place on the red carpet at celebrity events.

We also visited a Samsonite Black Label concept store. One of very few such stores in the city, it represents some of the highest-end retail Hyderabad has to offer. (A sales clerk informed us they had only 7-8 customers per day, on average). The store offers a variety of designer luggage, purses, and shoes—one small piece of luggage was one of only two on sale in India (out of around 600 worldwide) and was retailing for more than US $700. This is about a quarter of the median Indian annual income, even compensating for purchasing power.

In an interesting twist, even in these islands of luxury retail there was no escaping India’s infrastructure challenges: all the lights in one store were turned off when we arrived (though the store was open) and the employees turned on the lights for each floor as we reached it.

From my colleague Josh Calder, who is currently on S)T's Futures Expedition in Hyderabad, India:

Over the weekend we broke into two teams and visited six Indian homes that span the spectrum of the middle class. We came away with many provocative experiences and observations:

• At an upper-middle class house, we were interested to learn that, although they have a car, they stick largely to their two motorbikes, only using the car for weekend journeys of at least two miles. The family car is 12 years old ... and has less than 35,000 miles on it!
• In another upper-middle class family, we found a great example of the aspirational nature of car ownership: though the husband had only recently been promoted and was, as a result, starting to think about purchasing a car, he’d actually purchased a parking spot around the time he’d bought his apartment, years ago, “looking forward” to the future, as he put it.
• A Muslim household revealed just what family can mean in India: we discovered that seventy people were living under one roof, in an apartment building-sized home. After the grandmother stuffed us full of tea and snacks, we got a view of the neighborhood from the rooftop, as the call to prayer sounded from a nearby mosque, roosters crowed, and neighbors peered curiously at us from adjacent homes.
• A prosperous banker told us he wanted to send his kids to an international school, to give them a sense of wide-open possibility that Indians of prior generations did not feel.

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During day two of our expedition, our team split up into two groups and fanned out across Hyderabad, examining the changing retail environment firsthand, visiting everything from business-to-business vendor Metro to high-end retail stores City Center and Shopper's Stop.

Over the course of our retail visits, we discovered many clues to the evolution of Indian retail:

• The direct threat that the spread of modern retail presents to India’s vast informal retail sector was plain: in a Subhiksha (a large chain of small neighborhood grocery stores), price tags explicitly compared their prices to those of street markets, and a large sign proclaimed “Stop losing at the kirana,” referring to the mom-and-pop shops that dot India by the millions.
• At Big Bazaar, Hyderabad’s first shopping mall (consumer base: low-middle income segment), the “buy one get one free” promotion has been taken to a new level—with a twist. Consumers were offered many “buy one get two free” offers, for functional goods with obvious manufacturing defects.

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It has begun!

It has been less than 24 hours since we officially kicked off BRIC Expedition: India—and, already, we’ve gotten a taste of everything from Indian bureaucracy and to Hyderabad’s traffic (still going strong and bumper-to-bumper at 11pm!), to important life rituals and India’s nascent green building scene.

We started off the day with a fascinating introduction to India and Hyderabad from noted author and historian Dr. Narendra Luther, one of Hyderabad’s better-known citizens. Over the decades he has occupied every role from high-level government official to environmental activist—he noted that he has gone from seeing pollution as a hopeful sign of development efforts decades ago, to his “Save the Rocks” campaign of today—an NGO effort to preserve the massive, ancient boulders (in some cases almost 2.5 billion years old) that adorn Hyderabad, but are being demolished to clear space for Hyderabad’s breakneck development.

We also had an opportunity to talk with a sector head from the business investment wing of Andhra Pradesh’s state government, who gave us an idea of the business climate in Hyderabad, as well as an overview of the state’s extensive, successful efforts to attract major multinationals to the city and region.

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Social Technologies' Futures Expedition to Hyderabad, India -- one of four expeditions over the next two years that S)T is leading to the BRIC economies -- began a couple days ago. Three of my colleagues are traveling with S)T clients and meeting with local experts, business leaders, and regular consumers as they immerse themselves in India's future.

Over the next few days they will be submitting dispatches from India updating us on their progress as time allows. Click here to see all of the posts about our expedition to Hyderabad.

The Financial Times has an interesting article about how some companies are holding their board meetings abroad to immerse executives in a new and stimulating environment.

The article explains that it is an opportunity for companies to push executive thinking and get board members to see their organizational challenges "with fresh eyes."

Reuters is one company that has held board meeting overseas in important new markets. The article states that Reuters' execs felt that creating their Asia strategy after being together for a week in China "grounded" their strategic conversations in a way that wouldn't have been possible otherwise. 

This reminds me of the kind of contextual awareness we and our clients picked up this past May on our Futures Expedition in Shanghai. We spent a week exploring Chinese consumer life through home visits, focus groups, shadow shopping, and meeting with experts from companies and NGOs operating there. We also got a lot out of our personal observations in the field, whether this meant hearing firsthand from young Chinese consumers what they like and dislike about their mobile phone (see image) -- or learning about people's views on the environment through our evening focus groups.

If you missed the Shanghai Expedition, but need to understand how consumers in emerging markets are living and how they're going to shape the future, consider coming on one of our upcoming BRIC Expeditions. First stop: Hyderabad, India in February 2008, with subsequent trips to Russia (September 2008), Brazil (March 2009), and back to China in October 2009.

For a sense of the experience and the output, check out some excerpts from the Shanghai post-expedition report.

Image: Social Technologies

Shanghai's skyline. Image: Aku Virtanen (Flickr)And now for some lighter news:

Those of you who joined us on our Futures Expedition to Shanghai in May will be delighted to hear that S)T's assessment of that city -- as a model for the future of China and Asia as a whole -- has been confirmed by noted futurist Paris Hiton. You can read her comments here.

This has to come as a big relief to our man in China, John Cashman, whose work in that city is now validated.

Thanks, Paris!

India's growth. Image: Social TechnologiesBy now, we’re all familiar with the 2003 Goldman Sachs report "Dreaming with BRICs: The Path to 2050," which laid out their view on the growth potential of Brazil, Russia, India, and China. An interesting new report from Ernst & Young found that there continues to be enormous enthusiasm among investment firms around the world for initiatives and investments in the BRIC markets, “but that only about 29% of deals are completed because executives are not visiting the countries and learning about the local cultures,” according to a recent article in the New Yorker.

We urge our clients to educate themselves about and immerse themselves in the markets they are trying to understand. To help with this, Social Technologies will host a series of Futures Expeditions to Brazil, Russia, India, and China over the next two years. We will give participants a firsthand view of how changes in demographics, consumer life, values, and technology use are shaping the future of these critical markets. If you’d like more information on what we’ll cover on these BRIC Expeditions, see this (PDF).

As in the past, a big part of the BRIC Expeditions will be immersing ourselves in the daily life of these markets so we get a better sense of how important issues like urbanization, environmental concerns, rising income and changing consumption patterns are actually playing out for consumers and businesses. This means in-depth interaction (e.g., home visits, shadow shopping, focus groups), and engaging with experts who truly understand where these countries are headed. For a sense of what I mean, check out this excerpt from our May 2007 Futures Expedition to Shanghai and consider joining us on these fascinating and unique futures experiences in 2008 and 2009.

Futures Expedition schedule:

• India (Hyderabad) from Thursday, February 28 to Tuesday, March 4, 2008
• Russia (Moscow) from Thursday, September 24 to Tuesday, September 30, 2008
• Brazil (Curitiba) from Thursday, March 5 to Tuesday, March 10, 2009
• China (Shanghai) from Thursday, October 15 to Tuesday, October 20, 2009

Monday we took a small side trip, away from the hustle and bustle of Shanghai to the tier 2 city of Suzhou. Chinese cities are  usually divided into between four and six different levels, or tiers.

Suzhou is about 100km from Shanghai and provided some nice contrasts with the tier 1 city. Famous for its gardens, one of our translators joked that Shanghainese say Suzhou and Hangzhou (another neighboring city) are simply two of Shanghai’s gardens. While this might be the sentiment, it is anything but the truth—as Suzhou has some 6 million people.

During the day in the historic district of Suzhou we saw these highlights:

• We hopped on a water taxi and wound our way through a 400-year-old canal with traditional homes butting right up against the water. People were washing their clothes directly in the water, and the tiny streets around the canal area were full of one-room shops selling everything from duck and quail eggs to inexpensive ceiling fans and rice cookers. A true contrast to the ultra-modern malls and boutiques that pepper Shanghai, and the newer parts of Suzhou.
• We toured a Ming Dynasty garden filled with tourists. There were some French, Japanese, and a few Americans, but most were Chinese. Middle-class wealth brings middle-class leisure pursuits, and with car ownership domestic tourism is booming.
• Many of the apartments on the highway to Suzhou and the small houses in the canal area had solar hot water systems on their roof—and the families living there were clearly of modest means. For all the talk in the press about China’s testing and development of alternative energy systems this was the first day that our group saw an obvious use of “green power” technology.
• Finally, Suzhou just had a different feel about it. Driving through the downtown there just wasn’t the glitz and polish you see in Shanghai. The streets were dustier, there were some Western stores and restaurants like KFC, but local brands were predominant, there were more people walking and biking, and there were more Chinese cars than foreign brands.

While many China-watchers are forecasting that consumption in tier 2, 3, and 4 cities is going to be important for the next decade of growth in the country, infrastructure challenges and other factors such as local competition could be limiting factors for multinationals entering these markets. We saw evidence of this throughout our day in Suzhou.