What's happening in Dubai?
Few personal notes, observations and insights on Dubai
I am Aarihant Aaryan! Welcome to the Iron Sharpen Iron newsletter,
I share my weekly homework from my startup journey, learning about human behavior, and sometimes decoding industries and business models for fun.
I can’t control my curiosity :) )
The UAE context:
The next big economy is not China, USA, or India - I believe it’s going to be UAE, they have a decent fight to fight to become a superpower. Tech, resources, tourism, diversity - everything is in their favor, which is making the country attract great talent
In 2019, UAE introduced GOLDEN VISA, it’s a visa that they give for the long term basically to people who have made a significant contribution to their country, or are highly skilled in some given fields
Till 2022, they issued 79,000 golden Visas - by 2023 they issued close to 150,000 visas - now you might assume that’s a small number, but what I am looking at is the amount of wealth these 150,000 people will bring to UAE.
UAE per capita income is around, $55,000 - growing close to 3x from 1988
Diversity in UAE:
I wanted to understand the real diversity of Dubai at least, in all the high footfall or high traffic places I went, I wasn’t really happy with the diversity of people I was seeing
So I got this crazy idea and i just did that,
The idea was simple people who come on tourism are most likely to be super active on social media or dating platforms ( Dating platforms because they’re seeking short-term fun or want to be themselves) it was going to be absolutely hard to find those diverse people in one go in social media apps
Hence, I installed Bumble - got a weekly pro subscription and I started seeing what ethnicity of people stay in Dubai, I kept swiping for like 3 hours straight and “Uninstalled the app later on” - here’s the ethnicity of people I found, arranged in descending order:
Folks from Southeast Asia (Philippines, Bangkok, Malaysia, china, Korea)
Folks from India, Pakistan, srilanka
Folks from Europe ( Italian, French, Swiss, serbian, Spanish)
Africans mainly from Nigeria, Zimbabwe, Uganda
Saw a very less number of people from USA & London
Extremely fewer people from UAE or any other Gulf country
Cultural differences in UAE:
Go to any cafe or restaurant in Dubai, and you'll see local teens or adults (women and men) don't sit and eat together in groups, Women have separate groups, and men have separate groups
Unless you are married or dating they don't eat together, Ultimately which means there is no socializing between men and women
Ad-Tech in UAE:
Cost to get a lead for an Immigration company - 3 AED
The reason it is cheap because it is hard to get immigration access to the EU, UK, USA
If you are from a 3rd world country - but if you get to Dubai and work here for 2 years - it's easy to get an immigration visa for the above countries
Dubai NowApp ( it's like a bharat bill payment app) cost to get install is 28 AED, cost per activation lands at 60 AED)
The cost to get a lead for the real estate business is 60 to 200 AED
Fun fact: My friend apparently is a digital marketer who makes 5k AED per month, Indian companies offered him 20k INR per month for the same role lol
Fintech in UAE:
Apparently, no lending company does ads here in Dubai seems, They directly get data from big shops and make cold calls.
The credit limit the consumer gets here is insane, you get 3 to 4x of your salary as a limit
The time taken to open a bank account is 1 day, But to open a bank account you need to deposit 3.5k AED :')
The same way we see QR codes used by drivers, shopkeepers, and small merchants in India. People in UAE use POS machines, literally a driver, small shops have POS machines - Network International, A leading POS machine company did $438 Million in revenue last year, In 2021, they processed $42+ billion in total processed volumes (TPV) for more than 150k merchants - Razorpay did $46Billion in TPV I assume “In India”
Insurance is a mandate in UAE, for example
In Dubai it's a mandate to have health insurance ( premium starts from 60 AED - 1200rs) If you don't have health insurance, a fine of 400 AED (Approx 8000 bucks)
Financial Inclusion, Business insurance, Yearly Taxation has to be mandate without any exception - that’s when we see deep penetration
Cab Business in UAE:
Taxi services or cab Aggregator business makes sense in countries like India because most of us don't own cars
But in first-world countries, these businesses are at the mercy of tourism
In Dubai, Aug to Feb an avg cab does 30+ rides a day vs less than 10 rides a day from March to July
I have shared the economics of the cab business in the below image:
Food delivery in UAE:
Talabat ( A food and grocery delivery app for UAE) was launched around 2004, used to operate in a offline setting until proper internet penetration took place.
In 2016, they were acquired by rocket Internet for $160M, Last year they generated $630M in revenue that’s a really good acquisition by rocket internet
Have used the app multiple times, I feel swiggy and zomato are way well built interms of UX, product thinking and operations wise.
The way shopping is facilitated and consumers shop is extremely different:
I have rarely seen security guards in malls and supermarkets, haven’t seen anyone doing security checks when you enter the mall - this mostly happens in India
We Indians while shopping tend to walk left in the aisle, but have seen a lot of foreigners walk towards the right, using their right hand to catch the basket and left hand to experience the product
Supermarkets or Malls in India are designed and built for family shopping, it’s a big thing in India - The entire family goes and shops for an entire month, that’s their way to do a family outing / spend a weekend, whereas the western supermarkets are purely built for Individual shopping.
At supermarkets, consumers have the habit to do self-billing at express counters and leave the store, In India people can’t do this themselves - Ratnadeep a supermarket chain in south India tried this but miserably failed
I went to the Carrefour supermarket in Dubai Mall, the supermarket size is like 70% of a cricket ground, and they had only 2-3 counters and 5 self-checkout counters, a small supermarket in India has 4-5 counters - I think the strategy for carrefour is to make consumer spend more time in the line, that could eventually make him buy something more
Btw, Carrefour is like reliance retail in Dubai, fun fact is they have close to 70-80 hyper and supermarkets, + online sales (online sales contribute to 10 to 15% of revenue ) Last year they made $150M in revenue Revenue per supermarket is north of $2M
Ps: I made these observations by standing at the cash counter of the supermarket for close to 90mins - it was fun doing this :)
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