Matt Sollenberger: March 2008 Archives

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, 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.

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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