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#20/33
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September 22 – 28
2019

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MMA
A losing game?
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Arabian
Business
/Contents
24
32
T EC H N O LO GY
Software solutions
V K Mathews, founder and
executive chairman of IBS
Software, gives his analysis of
the Gulf’s aviation sector and
how technological advances
could help it return to growth
www.arabianbusiness.com
#20/33
September
22 – 28, 2019
C OV E R S T O RY By Bernd Debusmann Jr 40
MMA: A losing game?
It's a growing multi-
billion dollar segment of
the sports world, but will
mixed martial arts (MMA)
lose its best Middle East
fighters to low pay?
F I R ST WO R D A RT AS I N V E ST M E N T
q At the end of the day, Is art only for the rich?
hing
doesn’t everything As the Middle East's arts scene
and everyone have a welcomes a growing regional
price, or am I just
ust client base that is turning to
a cynic? artwork for an ideal investment
Shane McGinley asset, should creative pieces
Editorial director
shane.mcginley@itp.com become more affordable?
arabianbusiness #arabian business arabianbusiness SUBSCRIBE NOW +971 4444 3000 www.itp.com/subscription
3
C O N T E N TS

UPFRONT
1 0 TO U R I S M
Saudi Arabia is expected
to formally launch a new
visa scheme for tourists on
September 27

1 0 C O N ST R U CT I O N
The final piece of the Al Wasl
dome has been lifted into
place as the centrepiece of
the Expo 2020 Dubai site

10 CURRENCIES
Experts predict the Indian
rupee could slide further
due to concerns about a
rise in crude prices

COMMENT
12 TRADE
2 0 T H E B I G STO RY The US-China trade
dispute could have a range
ORACLE’S QUEST FOR THE WORLD’S of negative and positive
outcomes for the Gulf
FIRST AUTONOMOUS CLOUD region, Iain Ramsay believes
US tech giant Oracle is set to add four more data centres to the Gulf region within the next
15 months, chairman Larry Ellison announced at the annual Open World IT conference 16 MARKETING
Experts from MBLM Dubai
says brands today must
be agile, proactive and
hyperconnected with
their consumers

50 FIVE THINGS
TO K N OW A B O U T. . .

Saudi Arabia’s oil disruption

4 6 STA RT- U P 4 9 L I Q U I D AS S E T S The strikes against Saudi Aramco
Entrepreneur of the week: Hala Kazim Palm Grill: no fuss, all fun facilities in Abqaiq are expected to
The counsellor and founder of Journey Through Leave your worries behind and enjoy fresh seafood, cause weeks of disruptions to the
Change is helping women face their fears stunning views and laidback tunes kingdom’s oil output

4 Vol. 20/33, September 2019

 A COMMANDING NEW ADDRESS
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Dubai developer reveals AED120 per
day property payment plan
MAG Development says it is investing more than $2bn in residential projects in Dubai
MAG Property Development, the real estate
development arm of MAG Holding Group, has
announced the launch of a AED8bn ($2.18bn)
investment in residential projects in Dubai.
The investment will be injected into the
market to provide three major projects – MAG
City in Meydan, Al Furjan Villas and MBL Tower
in Jumeirah Lakes Towers.
The developer also announced a programme
of AED120 per day payment option to own a
property in Dubai without any additional terms
or fees.
“The programme will help to enhance the
attractiveness of the Dubai market globally by
attracting foreign investments into the sector,
and luring qualified people to move and live in
Dubai,” said CEO Talal Moafaq Al Gaddah.
“The new project, which is a special
programme for affordable housing, and
supports investors of all categories alike, is
based on the company’s vision that developers’
policies must change to meet market demands
arabianbusiness.com
u Talal Al Gaddah, CEO of MAG
Lifestyle Development
BRAND VIEW
“The programme will
help to enhance the
attractiveness of the
Dubai market globally
by attracting foreign
investments into the sector,
and luring qualified people
to move and live in Dubai”
and keep pace with its development and
growth rates, as well as the diversity of
projects,” Al Gaddah added.
He said the growing demand for medium-size
housing units in the coming years places a “real
challenge” to real estate developers assure
market balance and translate Dubai’s ambitions
into reality.
Al Gaddah added that all payment plans
would mean the customer will not have to pay
registration fees, service fees or any other
administrative fees, while the payment periods
vary between 10, 15 and 20 years.
7
F I R S T WO
O R D / Shan
Shane McGinley, Editorial Director

Q A LOT OF PEOPLE MAKE A LOT OF

MONEY OUT OF DETERMINING THE
VALUE OF ART, SO MUCH SO THAT A
LOT OF PEOPLE ALSO BORROW ON
THE BACK OF IT”

The price of everything, the value of nothing?

Have you read Oscar Wilde’s ‘Lady Windermere’s Fan’? Even if the answer is no, everyone is
surely familiar with the play’s most famous quip: A cynic is “a man who knows the price of
everything and the value of nothing” one character says, a theme which runs throughout a
lot of the articles in this week’s issue
H O W D O Y O U P U T A VA L U E
on something? That is the
eternal question posed by
experts and analysts across
the business world. It comes
into play when Apple are
trying to decide the price
for their new iPhone (when
they are balancing supply
with consumer demand), it
comes into play when people
are debating salary levels
for a new employee and it
even comes into play when
investors are trying to work
out how the price of oil or gold
or the Indian rupee will be
impacted by the recent drone
attacks on Saudi Aramco.
Our cover story this week
focusses on the world of
Mixed Martial Arts (MMA)
and investigates who is really
making the money out of this
popular sport. Those at the
top are certainly earning the
big bucks, as Russia’s Khabib
‘The Eagle’ Nurmagomedov
reportedly walked away from
his recent victory at UFC 242
in Abu Dhabi with $6m more
in the bank.
“We aren’t fighting for
peanuts,” Nurmagomedov’s
father Abdulmanap told
reporters. “We know our
value.” This goes back to the
phrase in Wilde’s famous line:
Nurmagomedov knows the
value he has and is not afraid
to demand what he sees as a
fair price in return.
However, while other
MMA fighters further down
the rankings may know their
value too, the price they are
commanding is nowhere
8 Vol. 20/33, September, 2019
u The $450m man Roger Federer is the world’s highest-paid tennis player
near the millions earned
by the Nurmagomedovs
or Conor McGregors of the
sport. “They’ll walk away with
$1,500… That’s not a lot,” one
fighter tells us.
“Why do MMA athletes
not live the lives of normal
athletes, whether from
football, tennis or cricket?”
veteran Bahraini fighter
Mohammed ‘The Hawk’
Shahid asks Arabian Business.
“Why don’t we try give
resources to MMA athletes
that any other athlete would
get to perform at the best of
their abilities?”
Big money
However, the issue of money
and sport is not straightfor-
ward. Just take a look at the
2019 Forbes list of the highest
paid athletes. Top of the list is
Argentinian footballer Lionel
Messi with $127m ($92m
from salary and winnings and
$35m from endorsements).
Similarly, in second place is
Portuguese forward Cristiano
Ronaldo on $109m ($65m
from salary and winnings and
$44m from endorsements).
But, if you look further
down the rankings a few
interesting things emerge:
At fifth place is Swiss tennis
superstar Roger Federer with
$93.4m, but his winnings only
amounted to $7.4m and his
endorsements have to made
up the rest. By comparison,
sixth placed less known
American footballer Russell
Wilson earned $80.5m from
his salary and only needed
$9m from endorsements.
A scan down the rankings
seems to show that footballers
– either soccer or American
football – earn massive
earnings, while tennis and
basketball stars earn much
smaller amounts on the
court and so need to bulk
up their earning power with
commercial endorsements.
But why is a tennis star’s
winnings so much lower
than a footballer’s? When
it comes to the gender pay
gap the argument gets even
more complicated. While
Federer earned $93m, Serena
Williams – the world’s highest
paid female athlete – took
home $29.2m over the same
time period.
Art attack
Determining value is also a big
issue in our article on the busi-
ness of art. “Art is more acces-
sible than ever, from afforda-
ble works on paper through to
masterpieces by modern Arab
artists – prices at Christie’s
can vary from $1,000 to more
than $100m,” Caroline Louca-
Kirkland, managing director
of Christie’s Dubai says.
You can argue the merits
of the value of a tennis player
versus a footballer but decid-
ing why one piece of artwork
is worth $1,000 and another is
worth $100m is an even more
complex and controversial
debate. But a lot of people
make a lot of money out of
determining the value of art,
so much so that a lot of people
also borrow on the back of it.
“By definition, art is the
expression or application
of human creative skill and
imagination. Is it fair to put
a price on creativity?” our
reporter Shruthi Nair asks
at the end of her feature. It’s
a fair question I’m sure low
ranking MMA fighters and
tennis players ask about when
they cash their winning pay
cheques at the end of a match.
At the end of the day, doesn’t
everything and everyone have
a price, or am I just a cynic?
Upfront
SEPTEMBER 22 – 28, 2019

The top news and business

headlines from the region

T H R E E R E AS O N S W H Y The final piece of the

Al Wasl dome has
been lifted into place, a
September 27 is a significant milestone in
the construction of the
‘game changer’ for centrepiece of the site.
The 130-metre-wide
Saudi Arabia domed steel trellis
encircles Al Wasl Plaza,
Tourist visas will be which will be the heart
of the Expo 2020.
available to people
from approximately
50 countries

Expo 2020
Dubai site

GOOD WEEK

BA D W E E K

Indian
rupee

u Saudi Arabia hopes that tourism dollars will contribute 10 percent of the kingdom’s GDP by 2030
A historic week
Saudi Arabia is expected to
formally launch a new visa scheme
for tourists on September 27, after
decades of being considered one
of the hardest countries in the
world to visit for purposes other
than business trips, religious
pilgrimages or family reunions.
According to some Saudi media
outlets such as Okaz, the visas will
be available to people from
approximately 50 countries,
issued on arrival for a price of $117.
10
Economic benefits
The tourism sector is
expected to provide a significant
boost as the kingdom seeks to
move away from dependence on
oil. Research from Colliers shows
that inbound visits from
international markets are
expected to grow by 5.6 percent
each year, helping bring KSA’s
overall number of tourist trips
– both international and domestic
– to 93.8 million by 2023, up from
64.7 million in 2018.
Business opportunities
A number of international
firms have expressed interest
to weaken further due
in expanding or setting up
operations in the kingdom once
international tourists begin
arriving. In May, Royal Caribbean
International Middle East’s
general manager Mohamed
Saeed said he believes that the
kingdom may one day have an
important role to play as a
stopping point for cruise ships
sailing through the Red Sea.
Market experts
said that the Indian
currency is expected
to concerns about a
further rise in crude
oil prices and the
potential impact high
prices will have on
India’s fiscal deficit
and overall economy,
in addition to rising
sell-off by foreign
portfolio investors
in the Indian
stock market
Vol. 20/33, September 2019
 SPOTLIGHT

THE CHANGING LANDSCAPE

OF DUBAI’S REAL ESTATE
Senior director at Mashreq Bank Sajid Siddique believes there is a shift
towards affordable housing in the emirate
The real estate market in Dubai is chang- ing needs. Another important impact
ing at a rapid pace and an aspect of polar- aspect is the availability of land at the right
isation is already being experienced in the price. It is impossible for developers to
residential market in some locations. execute affordable projects if the land that
Certain properties are showing greater is available to them is priced higher than
signs of stability compared to others. they anticipate. After all, if there is a
Then, an ongoing theme to capitalise on mismatch in the way the land is priced
greater returns through the holiday-home and what the market requires, it is difficult
model is increasingly becoming more to launch projects that the market actu-
evident. This is even more relevant for the ally demands. This aspect is being
period leading up to the Expo 2020 as increasingly addressed when the trend of
during this time; rates and occupancies new and more affordable projects espe-
are expected to be significantly higher. cially along the Al Qudra, E611 (MBZ Road)
That’s not to say that there aren’t chal- and Dubai South among several other
lenges. There is indeed some volatility in localities began accelerating.
the market, but hearteningly, various The impact that this has had on the
initiatives have already been introduced banking sector is certainly one of a bigger
to adapt to the changes in the market. mortgage market. There are two reasons
These range from developers absorbing for this; one being new sects of the popu-
land department transfer / registration lation making an entry in to the real estate
fees, offering periods where customers market, and the second being the propen-
do not have to pay the service charge and sity of this target population to require a
even through extended post-handover mortgage in the first place.
payment plans. But more than banks themselves, it is
Other strategies include introducing important for the banking regulator to be
new and efficient design concepts that able to arrive at a situation where mort-
reduce average unit areas in order to offer gages can be made cheaper and more
lower ticket prices. This is particularly readily available to a larger population
u Sajid Siddique, senior director of real estate finance, base. The rates that the market offers as
attractive for first time buyers that have,
as a result of lower per square feet prices, structuring and advisory, Mashreq Bank a result of being pegged to the US dollar
the opportunity to enter the market for the are, especially in a rising rate environ-
first time. ment, often prohibitive for mortgage seek-
Furthermore, the government has “It is important for the banking ers. This was clearly evident up until
undertaken several initiatives to make the regulator to be able to arrive at mid-2019 when interest rates in the US
were on the rise.
real estate market more affordable and
sustainable. These initiatives that have a situation where mortgages Trends in the real estate sector typically
been under consideration and / or are
being implemented are holistic in nature.
can be made cheaper and more materialize over an extended period of
time and not in the short term or near
This spans from making it more attractive readily available to a larger future. The key questions to be consid-
for businesses to set up operations,
including relaxing government fees and
population base” ered going forward are indeed about
defining “affordability”. The term itself is
visa norms, and simultaneously conduct- very loosely defined with very different
ing road shows worldwide to further enhance Dubai’s proposition. price points. It would be important at the regulatory level to first of all
The most recent initiative has been the setting up of a Higher Real clearly articulate the income distribution levels. Beyond this, good qual-
Estate Planning Committee in order to ensure balance between supply ity low- to mid-income housing, as well as social housing if and where
and demand in the real estate market and also to clearly articulate the required needs to be addressed.
value proposition of semi-government vs private sector real estate Dubai had one or two entities whose initial focus was to cater to the
players, thus contributing towards market stabilisation and improved median population with stable rents; however, a sense of direction was
sentiment. lost in the booming market with the same entities increasingly focussing
However, these affordable housing initiatives should not merely focus on hotels, and more recently, even the luxury freehold segment. The
on the low-cost aspect. Any real estate market requires a diversified government’s recent announcement of setting up of a Higher Real Estate
product range. It is similar to, let’s say, malls that have to ensure the right Planning Committee will thus be closely watched from an implementa-
product and tenant mix including high-end fashion, mid-range fashion, tion perspective.
specialty dining, fast food, supermarkets, electronics retailers and so on. Dubai already has some world-class infrastructure, transportation, a
The diversity in product mix is absolutely essential to increase footfall or, superb record of safety and a highly diverse population; with this in mind
as in the case of the real estate market, to attract investment across the and the Public and Private sectors working increasingly closer together,
affordability spectrum. Dubai has a great future ahead for itself when adapting to the changing
The marketplace is made up of a diverse population and equally vary- Real Estate landscape.

arabianbusiness.com 11
C O M M E N T / by Iain Ra
Ramsay, chief investment officer at GWM

u Tit for tat The two biggest economies have imposed billions worth of one another’s imports, thus affecting the growth of the global economy

are likely to see a slowdown imports around $19.5bn of

Gulf economies and the
US-China trade discord
Dispute could have a range of negative
and positive outcomes for the Gulf region
W I T H T H E T R A D E WA R
between the US and
China showing no sign of
de-escalating, Gulf economies
should be prepared to
deal with wide-ranging
12
repercussions, including
rising import and export costs
but also a potential increase in
long-term investment from
both superpowers.
Both the US and China
in economic growth driven
by lower output and higher
costs, which will inevitably be
passed on to consumers.
It is these two factors
that will ripple through
to economies here in the
Middle East in the form
of imports, exports and
foreign investment.
If we look at the current
trade balance between the
US and the UAE, the UAE
goods from the US.
Should we see higher
production costs in the US as
a result of increased tariffs,
this will filter through to the
UAE in the form of higher
cost of goods. Adversely, the
largest exports from the UAE
to the US include aluminium,
iron and steel products.
A decrease in economic
activity in the US, specifically
within the manufacturing
Vol. 20/33, September 2019
 COMMENT

Q THE GCC COUNTRIES MAY ALSO

BENEFIT FROM A RE-DIRECTION OF
FOREIGN INVESTMENT FROM THE
WORLD’S LARGEST ECONOMIES”

u Trade partner The UAE has been the top export market for US goods in the MENA region since 2009

sector, is likely to impact
these exports considerably,
albeit only a fraction of the
UAE’s current export market.
There are a number of
viewpoints when considering
the impact of the situation
on foreign investment in the
Gulf region.
From a general investment
perspective, uncertainty
in markets tends to lead
investors to take a more
cautious approach, avoiding
arabianbusiness.com
higher risk areas of the
market such as emerging
and frontier markets.
With all of the GCC
economies falling into these
investment categories, in
the short-term we may
see a slowdown in direct
foreign investment as asset
managers increase their
allocations to ‘safe-haven’
assets and reduce their
exposures to higher risk
investments. However, when
considering the long-term
implications of the US-China
trade dispute, the GCC
countries may also benefit
from a re-direction of foreign
investment from the world’s
largest economies.
Should the current dispute
escalate further, both the US
and China will inevitably look
to re-direct considerable flows
of their current investment
in each other’s economies
elsewhere and with favourable
foreign trade criteria across
many of the GCC countries,
this could put them at the
front of the queue.
We don’t believe GCC
countries should be ‘worried’
about the current trade war.
However, they should be
aware of the current situation
and accommodate and plan
for any potential direct or
indirect economic impacts
a worsening trade situation
will have on the region.
The economic fallout of the
current US-China trade war
will continue to be felt globally
until there is a resolution.
The living standards of
Q A RESOLUTION
TO THE US-CHINA
IMPASSE IS LIKELY
TO PROVIDE POSITIVE
SUPPORT FOR OIL
PRICES AND THE
ECONOMIES OF
THE GULF REGION”
$360bn
The tariffs imposed by the US
on Chinese goods, according
to latest reports
individuals in the region
should not be significantly
impacted in the short-term,
however, should the current
dispute continue there
may be effects on the Gulf
economies with everyone
across the region likely to
feel the pinch along with
consumers globally.
If the US-China trade
situation were to deteriorate
to such a point that it
had implications on the
price of oil, then the Gulf’s
economies would most
certainly be affected.
With many of the region’s
main economic returns still
derived from oil and gas,
should we see a slowdown
in global output this is likely
to result in a reduction
in demand and thus
negatively impact the price
of oil. However, with OPEC
recently taking steps to curb
production, a resolution
to the current US-China
impasse is likely to provide a
positive support for oil prices
and the economies of the
Gulf region.
13
C O M M E N T / by Fadi Maktabi, general manager of Hearts & Science MENA
u Online presence Cookies are the most well known type of web tracking technology, and the main avenue of ad tracking
Down to the last byte
As the cookie faces extinction, a new
order in digital marketing emerges
I T WA S N ’ T M E A N T TO B E
like this. In the 1990s, the
cookie was created to play a
fundamental role in helping
tech companies alleviate
storage problems. Back
then, people accepted it as
something that made the
internet work seamlessly. The
flip side of that acceptance is
14
that many companies took
advantage of it and abused
its power.
So much so that this
small (4,096 bytes) piece
of code has allowed the
dark side of big data to rise.
As the internet became
complexly intertwined,
cross-site cookies increased
the amount of data being
collected and shared between
platforms, publishers
and marketers for mutual
commercial gains. In return,
consumers were promised a
more “relevant” experience.
Yet, as the media explored the
impact of the digital world
on events such as the 2016
US presidential elections and
the Brexit campaign when
the European Union (EU)
began working on its data
regulation, the full, brute
force of the privacy debate hit
cookies hard, leading to calls
for their eradication.
Among the big tech
companies, Apple was the
first to capitalise on the
discussion when it added
its ITP (intelligent tracking
prevention) feature to its
Safari browser in 2017. What
ITP does in simple terms is
to reduce the amount of time
that cookies can remain on
a computer before being
deleted. It used to be several
days, but Apple has now cut
that to 24 hours. This limits
Vol. 20/33, September 2019

their usefulness and changes
the way marketers can target
consumers with relevant
ads on and across platforms.
With Safari constituting 15
percent of global web traffic,
other tech giants, including
Google’s Chrome and its 64
percent share (according to
StatCounter Global Stats)
eventually followed suit.
The search for what will
replace the cookie is on. In
a recent blog post, Google
announced a new initiative
to develop a set of open
arabianbusiness.com
standards to fundamentally
enhance privacy on the
web. Some observers see
this quest as part of a greater
battle between Apple,
Google, Facebook, Amazon
and the likes to enrich their
own ‘walled gardens’ or
ecosystem. Cutting out
tracking in general and
cookies will inevitably lead
to revenue losses for digital
publishers. Google estimates
this at 52 percent. But
even without cookies, data
collection goes on.
The ideal and most ethical
way forward is and will
continue to be log-in ID
data. This level of data is not
only deterministic data such
as email/phone number,
but also opt-in data by
consumers. Apple recently
introduced its own ‘log-in
with Apple’ solution for its
consumers, as they enhance
their ‘walled garden’ with
services such as TV, music,
news and others including
Apple Pay. This is particularly
important in the mobile app
space where cookies are not
applicable. As log-in data is
opt-in data, this approach is
the right thing to do from a
consumer perspective.
So, what does this all mean
for individuals, businesses,
the advertising industry and
the tech companies?
Consumers: They will be
the biggest winners. Track-
ing across platforms and
devices will decline and data
collection will focus more on
opt-in models.
People are increasingly
ready to pay more for both a
better experience (consider
the rise of subscription-based
services) and brands with an
ethical approach to privacy.
They may end up seeing less
Q DIGITAL MARKETERS AND
PUBLISHERS MUST EXPLORE A FUTURE
BEYOND COOKIES, AT LEAST IN THEIR
CURRENT FORM, AS CONSUMERS’
TRUST IS FRAYING QUICKLY”
relevant or hyper-targeted
ads, but these contextually
placed messages will be more
‘on-topic’.
Businesses: Companies
will need to decide on which
side of the privacy conversa-
tion they stand. Successful
businesses will be the ones
investing in data specialists/
partnerships to develop data
strategies that will ultimately
define their data purpose.
One goal is to build opt-in
experiences that can give
consumers both a person-
alised journey and continu-
ous communication.
Businesses will also need
to focus on value-based
brand messages for the top
of their funnel as perfor-
mance marketing will be
impacted by these changes,
as will reporting in the short
term. Businesses will need to
either reset their reporting
or plan for what measure-
ment will look like as these
changes take hold. Visitor
return and conversion rates
will be among the most
affected metrics.
Advertising industry:
Performance marketing
budgets will be negatively
impacted by the changes and,
as a result, so will publish-
ers. They will have to either
capture a greater share of
audiences or develop more
content that lives natively on
other platforms.
Publishers will need
consumers to see this content
$333.3bn
The worldwide digital ad
spending this year, according to
research company eMarketer
COMMENT
as an essential part of their
internet experience, paying
it more than occasional
visits. With retargeting being
affected, advertising will move
back up towards the top of the
funnel, with a growing focus
on brand-building campaigns.
They will tell stories with a
stronger purpose to bring
consumers closer to brands
until they ultimately opt-in
to hear more from them. The
over-reliance on performance
marketing we’ve seen over the
past couple of years will begin
to balance out.
Tech companies: Everyone
in the advertising indus-
try will have to work a lot
harder to adapt to the new
reality but tech companies
have a head start. They just
need to remain agile in their
objectives and dynamics.
One stands to gain the most
from all this. The rich-
ness of Amazon’s data and
its deep integration into
consumers’ lives will make
the e-commerce giant the
ultimate winner from all
these changes.
Digital marketers and
publishers must explore a
future beyond cookies, at
least in their current form, as
consumers’ trust is fraying
quickly. This doesn’t mean
they need to go back to square
one and abandon all forms of
tracking or user identification.
But the changes will be
significant enough to require
a readjustment.
There will be some pain in
the process but there will also
be gains. As consumers keep
expecting more, businesses
will adapt and lead marketing
back to its core, while tech
companies will grow by
offering convenience-based
services for all.
15
C O M M E N T / by Wi
William Shintani, ma
managing partner and Ashwin Kulothungun, associate director at MBLM Dubai

Q THE RELATIONSHIPS FORMED

BETWEEN A CONSUMER AND A
BRAND ARE RECIPROCAL, AND
MUST BE DEVELOPED WITH TRUST,
TRANSPARENCY, PRIVACY AND
SECURITY IN MIND”

u Best in the air Emirates Airline has been ranked the most popular brand in the Middle East, according to market research company YouGov’s BrandIndex

The building blocks sameness for consumers.

of an intimate brand
The most pressing issue for brands is how
to build better relations with consumers
A BRAND IS A VITAL AND
foundational component
of every business, start-ups
included. Today, brands and
their behaviours are heavily
influenced by the consumer:
their reputation and their
promises are constantly being
questioned, evaluated and
recommended by users.
The biggest challenge for
a brand is getting noticed –
the market is saturated with
16
hundreds of options, all
competing for the attention
of the same consumers. As an
example of this overload: a
person receives, on average,
more than 5,000 marketing
messages a day.
This also means that
competition is fierce – a
brand’s differentiators
are often rapidly copied
and integrated into rivals’
offerings, creating a sea of
This demands that
businesses think holistically
about their brands, constantly
questioning how they can
stay relevant, adapting
rapidly in an omnichannel
environment, and fostering
communities around
reciprocity and a real
exchange of control.
Brands today must
be agile, proactive, and
hyperconnected with their
consumers. The path to
success requires them
to consistently measure
behaviours, search for
technological advancements,
and have an inexhaustible
sense of urgency.
Creating a powerful brand
– Understand your
audiences
It is crucial to identify
and understand your key
audiences and the various
groups that influence them.
It is also critical to look at the
groups that your audiences
have influence over.
A brand needs to recognise
and address the priorities of
its audiences to build strong
emotional connections.
– Essence
The essence of your brand is
a foundational blueprint that
will guide it through every
engagement with audiences.
It starts with a purposeful and
Vol. 20/33, September 2019

u Icon Consumers could relate to
Apple’s hugely popular tech products
single-minded strategic focus
that articulates how the brand
wants to be perceived in the
marketplace. Supporting this
are the visual expressions of
the brand, from identity to
secondary graphics, colour,
and more. A strong essence
creates an ownable force
of attraction and succinctly
communicates the brand
to consumers.
Take Apple as an example,
the brand has consistently
ranked number one in the
Brand Intimacy Study in the
past three years. 46 percent of
all users in the study associate
the brand with the identity
archetype (when the brand
reflects an aspirational image
or admired values and beliefs
that resonate deeply) while 21
percent of users, the highest
in the study, report their
relationship with the brand
being in the fusing stage
(when a person and a brand
are inexorably linked and
co-identified).
– Story
With the brand’s essence
in place, focus on building
an emotionally driven
narrative that connects the
purpose of your brand with
your audiences’ needs and
arabianbusiness.com
aspirations. A brand’s story
establishes tools, content,
and campaigns that foster
engagement and build bonds
with consumers. A strong
story provides a distinctive
advantage in an increasingly
competitive business
environment by inviting
dialogue and speaking
to audiences effectively.
YouTube, the world’s largest
video-sharing platform, ranks
high in the enhancement
archetype (customers
become better through use
of the brand – smarter, more
capable, and more connected)
with 47 percent of users, and
in the ritual archetype (when
a person ingrains a brand into
his or her daily actions) with
48 percent of users reporting
for the same.
– Experience
The next step is to orchestrate
a unique brand experience.
It includes all of the physical,
environmental, and digital
worlds where a brand exists
and interacts with consumers.
A focus on making these
experiences engaging,
personalised, memorable and
crafted will delight audiences
in every interaction, across
more places and devices.
Emirates, ranked number
two, is deeply rooted in the
fulfillment archetype (exceeds
expectations, delivering
superior service, quality
and efficacy) as reported by
51 percent of users in the
2019 study. Sixty six percent
of users also report having
an immediate emotional
connection with the brand.
As technology becomes
an extension of consumers
through smartphones,
tablets and other devices,
brands have become
essential components and
Q THE RELATIONSHIPS FORMED
BETWEEN A CONSUMER AND A BRAND
ARE RECIPROCAL, AND MUST BE
DEVELOPED WITH TRUST, TRANSPARENCY,
PRIVACY AND SECURITY IN MIND”
Q THE BONDS BETWEEN
CONSUMERS AND
BRANDS MIMIC
HUMAN RELATIONSHIPS:
THEY EVOLVE AND
TRANSFORM OVER TIME”
tools for daily living. Brands
that participate in this new
environment, where they
become part of an individual’s
personal space, must learn
how to cultivate relationships.
The table stakes for start-
ups have now been elevated,
because expectations
are higher than ever. The
relationships formed
between a consumer and
a brand are reciprocal, and
must be developed with
trust, transparency, privacy
and security in mind. But
these are still just baseline
expectations, upon which
only a well thought-out and
developed brand can create
Average profit
growth 2008-2017
38.60% 24.52%
6.37% 20.45% 44.98%
Average revenue
growth 2008-2017
3.93% 5.01%
4.75% 3.66% 8.68%
Source: MBLM 2019
COMMENT
truly meaningful emotional
connections with consumers.
MBLM researches and
evaluates the emotional
relationships that brands
across 15 industries share
with consumers across
various demographics and
socio-economic levels.
Our research over the past
eight years shows that more
intimate brands benefit from
several advantages, including
consumer price resiliency,
higher revenue, and higher
profit margins.
The bonds between
consumers and brands
mimic human relationships:
they evolve and transform
over time. Thus, brand
building is an iterative,
continuous and ceaseless
process. It requires not only
the commitment to analyse
and assess progress over
time, but also the audacity
to take new risks and try new
approaches, as technologies,
media, and ultimately,
consumers, evolve.
Here are five questions
to help you build a more
intimate brand
Does your offering provide
unique solutions to an
unfound problem, and
are you communicating it
effectively across all channels?
Are you using yesterday’s
strategies to solve tomorrow’s
marketing problems?
What kind of bond, if any,
has your brand built with key
audiences, and how strong is
that bond?
Do you have a compelling
narrative that consumers can
relate to?
Have you developed ways to
leverage the ubiquity of device
usage to become a more
valuable part of consumers’
personal and work lives?
17
C O M M E N T / by Ziad Saad, partner in law firm Dentons’ Dubai office and member of the corporate practice

u Brightest minds The Cabinet decision aims to support the UAE’s economic growth and to reaffirm its position as a global hub for investment

needing to partner with a

From legislation to implementation UAE national.
The removal of barriers to business ownership in the UAE is a A timely but measured
move that aims to attract more investment to the emirates response to demand
The World Investment
T H E UA E L E G I S L AT O R S up to 100 percent of onshore the UAE’s efforts to attract Report 2018 issued by the
have initiated the UAE companies in certain and retain more foreign United Nations Conference
fundamental step for designated sectors. On July direct investment (FDI) and on Trade and Development
implementing UAE Federal 2, 2019, the UAE Cabinet met diversify its economy by (UNCTAD) highlighted the
Law Number 19 of 2018 on and subsequently approved permitting foreign investors UAE’s competitive advantage
Foreign Direct Investment the sectors and economic to incorporate and hold more as an attractive hub for
(FDI Law). The FDI Law activities eligible for up to 100 than 49 percent of the shares investors from across the
introduces a framework for percent foreign ownership. in the capital of companies globe. This report showcased
the UAE Cabinet to permit This represents a operating in certain sectors the UAE’s leading ability to
foreign shareholders to own significant milestone in of the economy, without attract FDI. FDI in the UAE
18 Vol. 20/33, September 2019

reached a total of $10.4bn
in 2018, in part due to rising
cross-border M&A, ranking
the UAE first amongst Arab
countries and 27th globally
(up from 30th in 2017).
Also, the UAE’s share of
FDI in 2018 accounted for
36 percent of the total FDIs
flowing to the group of Arab
countries as a bloc.
The UAE’s Foreign
Direct Investment
Committee (FDIC) is the
sole governmental body
which can legally propose to
arabianbusiness.com
the UAE Cabinet the list of
eligible commercial activities
and the economic sectors in
which greater levels (i.e. over
49 percent) of FDI will be
permitted (Positive List).
Following the FDIC’s
second meeting after the
implementation of the
FDI Law which took effect
on September 24, 2018,
the UAE Cabinet has now
subsequently issued
the hugely anticipated
Positive List.
The Positive List
The Positive List covers a
total of 122 economic activ-
ity groups, encompassing
over 900 activities across 13
sectors, including, but not
limited to, the agricultural,
manufacturing, renewable
energy and space sectors,
which would be eligible for
up to 100 percent foreign
ownership. Further, the FDI
Law provides the FDIC with
powers to regularly update
the Positive List and so the
Positive List may be amended
to encompass additional
activities in due course.
An in-depth examination
of the initial declared sectors
and activities reflects the
UAE’s focus on attracting
investments in specific areas
that are considered key to the
realisation of its vision and
strategic plans, in light of the
ongoing governmental efforts
to position the UAE as the
regional hub in such sectors.
By excluding, at least to
date, sectors that might be
considered as saturated such
as real estate and retail, the
UAE Cabinet’s choice of
sectors appears to be driven
by industries that can support
the UAE’s plans to promote
innovation and knowledge
transfer, attract international
Q THE UAE CABINET’S CHOICE OF
SECTORS APPEARS TO BE DRIVEN BY
INDUSTRIES THAT CAN SUPPORT THE
UAE’S PLANS TO PROMOTE INNOVATION
AND KNOWLEDGE TRANSFER”
expertise, create new job
opportunities and training
for national cadres and
strengthen and sustain the
economy in accordance with
international best practices.
Minimum capital
requirements
The Positive List speci-
fies certain requirements
for entities which are the
subject of an application for
an increased level of foreign
ownership, including mini-
mum capital requirements
ranging from AED7.5m
($2.04m) to AED10m
($2.72m) for the majority of
the agriculture-related activi-
ties and between AED2m
($544,000) to AED100m
($27.22m) for manufacturing
related activities included in
the Positive List.
The UAE Cabinet’s
resolution provides each
emirate with the authority
to determine the cap on an
increase in the ownership
percentage of foreign
investors above 49 percent
for activities included in the
Positive List. This flexibility
provides each emirate with
a degree of discretion in
deciding the appropriate
level of foreign ownership
in accordance with its
respective needs and local
economic interests.
Q FDI IN THE UAE
REACHED A TOTAL OF
$10.4BN IN 2018, IN
PART DUE TO RISING
CROSS-BORDER M&A”
3.7%
The rise in the UAE’s real GDP
this year, according to the IMF
COMMENT
What does this mean
for FDI in the UAE
going forward?
This may theoretically result
in varying foreign owner-
ship thresholds for the same
sectors across different
emirates in the absence of
a uniform requirement to
harmonise foreign ownership
levels across the UAE.
Could this have an impact
on the flow of FDI across
the UAE and potentially
result in the various emir-
ates competing in order to
attract investments, reflect-
ing the needs and economic
interests of each of the seven
emirates? Also, how will
this impact the existing free
zones currently operating in
the UAE as foreign inves-
tors become drawn into
the appeal of establishing a
majority or wholly owned
onshore entity, notwith-
standing the other benefits
of operating in a free zone
(i.e. duty free imports).
Whilst the answer to
these questions will unfold
over the coming months,
it is widely acknowledged
that the relaxation of the
UAE’s foreign ownership
restrictions is likely to
incentivise foreign businesses
through (i) establishing a
presence onshore and, in
turn, attracting new players
into the mainland market or
(ii) restructuring their
existing shareholding
arrangements to own a
controlling majority, or
even the entire issued share
capital, in an onshore entity.
At Dentons, some of our
clients are already exploring
the implications of these
developments which marks
a significant milestone
towards the UAE achieving
its economic vision.
19
T H E B I G P I CT U R E

A person enters the

new Institut Francais de
Civilisation Musulmane
(French Institute of
Muslim Civilisation, or
IFCM), on September
17, 2019 in Lyon. Created
in partnership with the
Great Mosque of Lyon,
the IFCM aims to spread
a better understanding of
the cultures of the Islamic
world, to understand
its origins, diversity
and contributions, in a
meeting space open to all.
PHOTO: JEFF PACHOUD
/ AFP / GETTY IMAGES
u Ellison said Oracle’s ultimate goal is to deliver the world’s first complete and truly autonomous cloud services

Larry Ellison: Oracle to launch four

Gulf data centres within 15 months
US tech giant will launch 20 new Oracle Cloud regions in total by the end of 2020
BY ALICIA BULLER

ORACLE CORPORATION IS SET TO ADD
four more data centres to the Gulf region
within the next 15 months, executive
chairman Larry Ellison announced in
San Francisco last Monday.
In a show of serious intent for the
region, Oracle will open two data
centres in United Arab Emirates and two

in Saudi Arabia. In February, the software
company – the second largest in the
world by revenue – opened its first data
centre in the Middle East in Abu Dhabi to
offer cloud storage to customers across
the region.
To support its customers around the
world, Oracle will launch 20 new Oracle
Cloud regions in total by the end of 2020.
In addition to the Middle East, this
expansion includes regions in new
countries and dual, geographically
separated regions in the United States,
Canada, Brazil, United Kingdom,
European Union, Japan, South Korea,
Australia and India.
Vol. 20/33, September 2019

“Oracle Cloud has 40,000 customers
and we are growing rapidly. Within 15
months we will have 36 Oracle regions
versus 25 AWS [Amazon Web Services]
regions. And this is happening fast,”
Ellison, who is also the co-founder
and chief technology officer (CTO) of
Oracle, told the audience at the annual
Open World user conference.
Battle for Middle East cloud
The public cloud services market in the
MENA region is projected to grow to $1.9bn
(AED 7.97bn) by 2020, double what it was
in 2016, according to Statista.
SAP is the current frontrunner in the
race with three centres in the Middle
arabianbusiness.com
T H E B I G STO RY / O R AC L E C O R P O R AT I O N
u With 430,000 customers in 175 countries, Oracle is a world leader in artificial intelligence (AI),
Internet of Things (oT), machine learning and other emerging technologies
“We are working towards
delivering the world’s
first autonomous
cloud. It marks a
new generation in
computer technology”
East region in Dubai, Riyadh and
Dammam, which house servers for
local cloud computing clients.
Comparatively a smaller player,
Alibaba Cloud – the cloud computing
arm of the Chinese e-commerce giant
– opened its first regional data centre in
Dubai in 2016.
Microsoft brought online its first
data centre regions in the Middle East
in June this year, opening one each in
Dubai and Abu Dhabi. AWS unveiled its
first and only data centre in Bahrain in
July this year.
For regional enterprises, moving
their operations to a cloud hosted by
$6.03bn
Oracle Corporation’s spending on
research and development for
fiscal year 2019
a specialised company, such as Oracle
or Microsoft, is proving cheaper than
creating their own infrastructure
of servers, hardware and security
networks. It also brings down the
overall cost of ownership.
Oracle, which posted revenues of
$39.5bn in 2018, is taking a huge punt on
the growth of the cloud globally.
Oracle Cloud has opened 12 regions in
the past year and currently operates 16
regions globally – 11 commercial and five
government – the fastest expansion by
any major cloud provider.
Ellison also announced last Monday
a major milestone in the company’s
autonomous strategy with the availability
of Oracle Autonomous Linux – the first
autonomous operating environment
that eliminates complexity and human
error to deliver cost savings, security, and
availability for customers.
The CTO also announced Oracle Cloud
Free Tier, including new Always Free
services for anyone to try the world’s first
self-driving database and Oracle Cloud
Infrastructure for an unlimited time.
“Autonomy is what separates second
generation cloud from what came
before,” Ellison said. “We are working
towards delivering the world’s first
autonomous cloud. It marks a new
generation in computer technology.”
23
C OV E R STO RY / M M A
u Four years after it was established in Bahrain, Brave Combat Federation (BRAVE CF) is one of the fastest rising MMA organisations in the world
F
OR EVERY MINUTE HE
spent knocking
down his opponent
at the UFC 242 in
Abu Dhabi, Khabib Nurmago-
medov became $500,000 richer.
“We aren’t fighting for
peanuts,” his father told report-
ers. “We know our value.”
With the $6m pay check he
took home, the Middle East’s
favourite fighter could have
bought a lifetime’s worth
of peanuts.
And his win was no surprise.
Thirty year old Nurmago-
26
“They [promoters] medov, a native of Russia’s
Dagestan, has maintained a
invest and invest, perfect record of 28 wins and
and if the return no losses.
doesn’t quite UFC President Dana White
happen, they called him “pretty special”
while executive vice presi-
tend to go bust” dent Lawrence Epstein said
the win will give a “huge”
boost for the Middle East’s
fighting community.
21
The number of worldwide events
But for the vast majority of
MMA fighters who are based
in the Middle East, payouts
BRAVE CF has organised during like Nurmagomedov’s are little
its first two years of operation more than a pipe dream.
Dubai-based Russian-Leba-
nese fighter Roman Wehbe
knows all about fighting for
peanuts, or $1,500 to be exact.
“Most of the guys that are
active fighters here are trainers
in gyms or freelancing to pay
for their lifestyle. The fighter is
very poorly paid,” he says.
Wehbe, who stands at 5”10
and weighs in at an imposing
120kg, is one of the Middle
East’s top heavyweights,
having started in combat
sports in the underground
world of bare-knuckle fights in
Vol. 20/33, September 2019

the United Kingdom. He took
part in his first MMA fight in
2006 and has since stepped
into the octagon 15 times.
He says the highest pay
check for most fighters work-
ing with local promoters in
the GCC is approximately
$3,000 per fight.
“If [a win] doesn’t happen,
they’ll walk away with $1,500.
That’s not a lot”.
Whereas local fighters are
eligible for a $500 submission
or performance bonus, the
UFC’s performance bonuses
arabianbusiness.com
alone amount to $50,000 – four
of which were handed out
following the Abu Dhabi event.
For each of the sport’s
millionaires like Nurma-
gomedov or Irish arch-rival
Conor McGregor, dozens,
if not hundreds, of fight-
$47m
The estimated earnings of MMA
superstar Conor McGregor,
according to Forbes
u UFC President Dana White defended the company’s payouts to fighters
u Irish UFC champion Conor McGregor is one of the biggest draws of the sport
ers barely scrape by, forced
to prepare for fights while
juggling the demands of a
second job, devoid of the lucra-
tive contracts, hefty bonuses
and training opportunities
that MMA’s minority of stars
depend on.
The UFC, or Ultimate
Fighting Championship, is
the sport’s most prominent
promotion company. What
began in 1993 as an obscure
and bloody spectacle to find
out which fighting styles
would win over others – and
/ MMA
in which the only rules were
that fighters couldn’t bite or
gouge each other’s eyes out
– has morphed into a global
behemoth, with over 40
events a year and a following
of millions around the world.
In 2001, the still-fledging
UFC was sold to Station
Casino executives Frank and
Lorenzo Fertitta for $2m,
before Endeavor Group Hold-
ings bagged it for $4bn in 2015.
Three years later, UFC’s White
claimed the company was
worth a whopping $7bn.
27
C OV E R STO RY / M M A
u Brave Combat Federation founder Sheikh Khalid Bin Hamad Bin Isa Al Khalifa (left) with reigning UFC lightweight champion Khabib Nurmagomedov
Yet even at the pinnacle of
the sport, the majority of the
fighters on the UFC’s fight
cards are making far less than
stars like Nurmagomedov.
Websites such as The Sports
Daily estimate that several
undercard fighters at UFC 242
earned as little as $13,500.
While the UFC is just one of
many promotion companies
in the sport, it is conspicu-
ously lacking in Middle East-
based fighters. Of the ones at
UFC 242, only one – German-
Moroccan Ottman Azaitar – is
based in the MENA region in
far-off Rabat.
Show me the money
The absence of regional fight-
ers from the UFC means it is
more difficult for those like
28
Wehbe to pursue opportuni-
ties. Ahead of a fight, or some-
times almost the same day as
the event, Dubai-based Wehbe
has to work up to eight hours a
day and train for at least three
“Active fighters
here are trainers in
gyms or freelancing
to pay for their
lifestyle. The fighter
is very poorly paid”
28
The wins of ‘The Eagle’
Nurmagomedov. He holds the
longest streak in MMA history
or four hours. It’s not the train-
ing that’s the problem, he says,
it’s the recovery process.
“You’re not getting that
since you’re putting time into
work, so you aren’t really bene-
fitting from the training itself.
If you’re not recovering, you
can’t train as hard the next day,
and the day after that,” he says.
Dubai-based Rafat Shawi,
a former member of Iraq’s
national Karate team, shares
Wehbe’s concerns and says
companies will sponsor fight-
ers with products rather than
pay like “a food company that
gives you their food...
“The risks you take in MMA
are very high; much higher
than in boxing or any other
sport, but the money is not
really there.
“If you’re lucky, you’ll find
a way to get paid in cash, but
most of the sponsors will
sponsor you to promote their
product… You don’t really find
those sponsors who give you
cash,” he says.
According to both Wehbe
and Shawi, promoters over-
estimate the potential profit
from fights, run out of funds
and ultimately disappear.
“[Promoters] invest and
invest, and if the return
doesn’t quite happen, they
tend to go bust. They run out
of financial bankrolling. They
tend to put money into these
things thinking they can make
it grow, but sometimes maybe
there is no return. That’s
where they fail,” he says.
Amman-based MMA
Vol. 20/33, September 2019

“If that [a win]
doesn’t happen,
they’ll walk away
with $1,500.
That’s not a lot”
promotion Desert Force
abruptly halted operations in
2017 with no prior notice just
weeks ahead of a scheduled
event, leaving fighters with no
contracts, while Beirut-based
Phoenix Fighting Champion-
ship has also been liquidated.
Representatives of both
organisations were contacted
by Arabian Business for a
comment, but did not respond
at the time of printing.
Middle East’s Messi
In 2015, Bahraini army officer
and royal Sheikh Khalid Bin
Hamad Al Khalifa offered
an unexpected boost to the
industry with the launch of
KHK MMA alongside veteran
fighter Mohammed ‘The
Hawk’ Shahid as its CEO.
Sheikh Khalid Bin Hamad,
who is the son of Bahraini
Ruler King Hamad Bin Isa Al
Khalifa, is a graduate of the
UK’s prestigious Sandhurst
military academy and has a
particular penchant for MMA.
In 2016, together with
Shahid, he launched Manama-
based MMA promotions
company Brave Combat
Federation (BRAVE CF), which
now claims to be the Middle
East’s largest of its kind with
operations in Dublin, Sao
Paulo and Mumbai, holding
events around the world in
Abu Dhabi, London, Colombia
and more.
“It started with a question,”
Shahid says. “Why [don’t]
MMA athletes live the lives of
normal athletes, whether from
football, tennis or cricket? Why
don’t we try to give resources
arabianbusiness.com
u Fighter Ottman Azaitar has a professional record of 12 wins and no losses
u Roman Wehbe (left) is among the top heavyweights in the Middle East
to MMA athletes - [which] any
other athlete would get - [in
order for them] to perform at
the best of their abilities?”
Shahid says the answer lies
in marketing, whereby the
better fighters are at marketing
themselves, the more support
and pay they receive.
“It’s a tough sport, and it’s
an English-speaking sport. If
you can’t market yourself, and
aren’t a person that can go
trash talk or doesn’t know the
$100,000
The amount Nurmagomedov has
raised for opponent Dustin Poirier’s
charity this month
English language, you’re going
to be in a little bit of trouble, no
matter how much talent you
have,” he says.
KHK MMA, which also
operates beyond the Middle
East, was Nurmagomedov’s
temporary team following
his ligament injury, with the
champion having publicly
credited the organisation for
helping rehabilitate him.
Shahid believes providing
that same support, including
full-time training and interna-
tional promotions, to Middle
East fighters would not only
boost their performance but
also increase the popularity of
MMA in the Arab world.
“Somebody has to take the
responsibility for any other
/ MMA
UFC payout
structure
u MMA champions could earn
$40,000 per bout
According to official UFC pay
structures which took effect
in 2018 – which manages the
money generated by a
multi-year sponsorship deal
with Reebok – fighters who
have previously fought one
– three bouts receive $3,500 in
fight week incentives per
appearance, compared to
$4,000 for those with four
– five bouts, $5,000 for six – 10
bouts, $10,000 for 11-15 bouts,
$15,000 for 1-20 bouts, and
$20,000 for 21 bouts or more.
Additionally, champions earn
$40,000 while title challengers
earn $30,000. The payouts also
note that UFC fighters will
receive in perpetuity royalty
payments totalling 20 to 30
percent of UFC merchandise
that bears their likeness. The
figures do not include other pay
that fighters may have received,
such as pay-per-view broad-
casts and other sources.
The payout tiers only count
fights that have taken place in
the UFC, as well as in fights
previously held in World
Extreme Cagefighting in 2007
and Strikeforce, a now-defunct
MMA organisation, after 2011.
As Reebok is the UFC’s
exclusive apparel partner,
fighters cannot be sponsored
by other entities during fights,
fight week, and weigh-ins.
29
C OV E R STO RY / M M A
u BRAVE CF – apart from supporting fighters from the region – is continuing to promote the sport of MMA in the region and beyond
factor than the talent that it
takes an athlete to be where he
wants to be. That’s the unfair
side of MMA we see today.
If you really make MMA an
actual sport, you’ll get 10
times better performances and
athletes can reach wherever
they want…” he says.
Shahid suggests MMA could
grow to become as popular as
football in the Middle East.
“We could have a Messi in
MMA from this region. This
will make them more valu-
able. We think it would be able
to create more international
stars from regional stars just
by [them] fighting,” he says.
Tapping in
Luckily for those fighters
whose ultimate goal is to
30
u Brave Combat Federation will return to Abu Dhabi on October 4
$620m
The capital UFC parent
company Endeavor aims to
raise with an IPO later this year
become international fighters
with promotion companies
like the UFC,there is progress.
In April this year, the UFC
signed a five-year partner-
ship with the Abu Dhabi
Department of Culture and
Tourism (DCT Abu Dhabi)
to host events in the capital,
with executive vice president
Esptein revealing that he has
high hopes for regional fight-
ers, particularly following
Nurmagomedov’s win in the
UAE capital.
“We’ve done events here
in the past, bringing in global
UFC stars, and that’s been
very successful. But having an
athlete that’s both a star and
has a local following is even
better. He’s a Muslim athlete
and has spent a lot of time in
the region. That makes him
really attractive here. Our goal
is to expose as many people to
the sport of MMA and the UFC
brand. Having an athlete cut
through and that gets people
interested in a particular
Vol. 20/33, September 2019

region is going to help us accel-
erate that growth,” he says.
The UFC’s White also expects
a Middle East champion in
the next six-seven years. “It
happens everywhere we go, it
kick-starts the market, gyms
pop up, and people are train-
ing. Talent is coming out of the
area,” he says.
It helps that the UFC
promotes local events through
digital platform FightPass on
its mobile app, and increas-
ingly invites global fighters
to visit and train at its $14m,
2,787 sq m UFC Performance
Institute in Las Vegas or sister
facility in Shanghai.
“You’re going to see more
and more investment from
the UFC in terms of helping
athletes develop their skills, get
arabianbusiness.com
“The risks you take
in MMA are very
high, much higher
than in boxing or
any other sport”
u Karate blackbelt Rafat Shawi is a professional fighter and trainer
u An ex-fighter himself, Mohammed Shahid knows the intricacies of the sport
better at strength and condi-
tioning, and provide nutri-
tional assistance and the like to
make sure these athletes have
the best resources and best
training to ultimately reach
their potential,” Epstein says.
But the UFC alone is not
capable of hosting the number
of events needed to sustain a
profitable MMA industry in
the Middle East, according to
Epstein.
“The biggest challenge we
have with the UFC is that
frankly we can only do a
certain number of events per
year. We’re going to do 42
events in 2019, which is a lot
when there are only 52 weeks.
The challenge of being capac-
ity constrained is something
we have to deal with.”
The solution? Local promot-
ers “filling the gaps and giving
talent the opportunity to hone
their skills,” Epstein says.
For love, not money
For now, fighters like Rafat
Shawi say they are willing to
take the beating for the love
of the sport. “Maybe I was
seeking adrenaline more than
anything else. It’s about testing
myself. The feeling when you
go into the octagon is amazing,
especially if you win. We’re not
doing it for the money.”
It seems that the low pay
and absence of sufficient local
promoters is not enough to
steer Middle East fighters away
from MMA just yet.
“I love it and I’ll never regret
doing it,” says Shawi.
/ MMA
Fighting for
glory
u Soon to rise: Mohammad Yahya
In 2017, then 24-year old
fighter Mohammad Yahya
became the first Emirati to
sign for an international
promotion – California-based
Bellator – with a four-fight
contract. After winning his first
Bellator fight in 2017 and being
sidelined by injury, Yahya
returned in May 2019, when he
suffered a loss at an event in
Birmingham, UK.
Dana White
on pay scale
In a TV interview with
American sports reporter
Graham Bensinger in 2016,
UFC President Dana White
defended the UFC’s payouts
to fighters, saying it is “on
par” with other professional
sports leagues.
“If you’re the champion or a
big star, usually your deal is to
be cut into the pay-per-view.
You’re a partner with us,” he
said. “Every time we put on a
pay-per-view, we’re rolling the
dice. We don’t know what’s
going to happen. When we hit a
home run, they hit a home run
too. Trust me, these guys are
making a lot of money.
“The opportunities today are
like playing in the NFL, NBA, or
Major League Baseball.”
31
F E AT U R E / V K M AT H E WS

32 Vol. 20/33, September 2019

 / V K M AT H E WS

Can an Indian
tech company
help Gulf airlines
soar out of
their slump?
V K Mathews earned his stripes in the aviation technology
sector working for Emirates, before setting up IT firm IBS
Software. With offices in the UAE and a frequent traveller
to the region, the Indian executive chairman gives his
analysis of the Gulf’s aviation sector and how
technological advances could help it return to growth
BY JAMES MATHEW

arabianbusiness.com 33
F E AT U R E / V K M AT H E WS

W
H E N V K M AT H E W S WA S
general manager of IT at
Dubai-based Emirates airline
in the 1990s, he saw a clear gap
in the world of aviation technology. The
carriers’ demands were not being met by
global technology players, let alone local
IT companies, so when Mathews led the
team to set up Emirates’ Mercator, a
strategic business unit (SBU) aimed at
providing technology services to other
airlines, his ambition to fill the gap he
spotted years ago grew even stronger.
The result? The birth of IBS Software.
Mathews established the product
development company in 1997 to cater
to worldwide aviation and transporta-
tion industries, and, since then, he has
not looked back.
“Airlines all over the world were still
using their legacy technologies when I
had left Emirates to set up IBS. Today, we
can say with much satisfaction and confi-
dence that over these years our company
has changed the way airlines are carry- u Emirates continues to invest in personnel, technology and infrastructure to keep its competitive edge
ing out their fleet and crew management,
passenger reservations, accounting, cargo
management, etc to get optimal opera-
tional and cost efficiency,” says the execu-
tive chairman, who was the youngest GM
from Asia at Emirates when he decided to
leave the Gulf airline. We meet him in the
sprawling, green IT complex Technopark
located on the outskirts of Kerala’s capital,
Thiruvananthapuram.
The walls of the meeting room are
dotted with photographs of historical
personalities, ranging from American
inventor Thomas Edison to Indian politi-
cian Mahatma Gandhi and English social
reformer Florence Nightingale. Mathews
says the pictures act as inspiration for him
and his team to become the preferred tech-
nology partner for global airlines such as
Etihad Airways and Lufthansa.
“The IT industry globally is a $5 trillion
industry. As, against this, the entire aviation
industry was only about $700bn in 2018.
The IT operation of the airline industry
accounted for a smaller share of it. So, the u Dubai International Airport will adopt the next generation technology to harness its capabilities
IT business of airlines was a small pie for
the IT industry, and airlines mostly had operation management, cargo manage-
to develop their IT technologies in-house ment, etc. to drive efficiency in the opera-
back in the earlier days.
“But the airline industry required
advanced technology to manage the highly
105,286
Emirates Group’s total workforce
tions and make huge savings on their costs.
This is the only way for the airline industry
to keep growing at the current rate of 4-5
complex but most crucial operations such across its more than 120 subsidiaries, percent,” says Mathews.
as passenger and crew management, flight representing over 160 nationalities While IBS has no plans to expand its
34 Vol. 20/33, September 2019

operations to other industry segments, it
plans on bringing more innovative prod-
ucts to maximise efficiency levels.
In order for airlines to keep up with the
current growth pace of technology, they
need to invest says Mathews.
“Investments are done by companies like
IBS – three to five percent of their revenue
annually to sustain and ensure the grow-
ing pace of the industry. Spending less than
this will lead to them acquiring flab over
time, slowing down their growth,” he says.
Financial constraints
Their growth has already slowed down.
Leading airlines in the Middle East have
reported losses or declines in profit in the
last few quarters, with Emirates having
reported a 69 percent year-on-year decline
in profit for the 2018-2019 financial year,
while Etihad posted a third consecutive
annual loss in excess of $1bn in calendar
year 2018. Many airlines in the Middle East
have also posted negative air passenger
traffic growth in recent months.
“Middle East airlines have been facing
headwinds for some time now. This is
because of a host of reasons. The geopo-
litical and socio-economic tensions in and
around the region are adding to their trou-
bles. A major reason for the slowdown in
the scorching pace of growth of the lead-
arabianbusiness.com
u IBS is a leading provider of modern IT solutions for the travel, transportation and logistics industries
“No airline in the
world would have
dared to do what
Emirates has done to
implement its growth
strategy – going
for a massive fleet
expansion”
ing Gulf-based airlines, such as Emirates,
Flydubai, Etihad and Qatar Airways, is the
fast changing dynamics of the aviation-
travel industry today. To understand this,
one has to understand the backdrop in
which the leading Middle East-based
airlines, especially Emirates, were able to
achieve the phenomenal growth they had
for over a decade until 2016-2017.
“Their business model depended on
taking passengers and cargo from nearby
regions – India, African countries, etc –
$29.66bn
The revenue posted by the
Emirates Group in financial
year 2018 – 2019
/ V K M AT H E WS
and connecting them to all parts of the
world. The geographic centrality of the
region [Middle East] helped airlines like
Emirates to optimise this business model
to its full potential. Besides, no airline in
the world would have dared to do what
Emirates did in order to implement its
growth strategy – going for a massive fleet
expansion by ordering about 200 Boeing
777s and another 110 or so Airbus A380s
(in their early growth phase). They have
flights originating from and returning to
Dubai from all parts of the world.
“This has helped Dubai to emerge as the
largest globally connected hub. As many
as 1 million Indians transit Dubai every
month. Similarly about 700,000 Indians
transit Saudi Arabia every month for vari-
ous destinations.”
Mathews says Gulf carriers are losing
passenger traffic from destinations such
as India as more international and Indian
carriers launch direct flights to Europe
and the US from various Indian cities,
bringing down airfares significantly.
“Currently, a Kochi-Europe ticket costs
double that of a Bangalore-Europe ticket
as the flight from Kochi to Europe is via
Dubai,” he says.
While Gulf carriers were experienc-
ing fast growth, they also acquired some
“flab”, Mathews says.
35
F E AT U R E / V K M AT H E WS

“During this time, airlines all over

the world had been continuously
resorting to continuously cutting
down on their operational costs by
spending on technology.

Future strategy
Mathews says that Middle East airlines
will have to follow a three-pronged strat-
egy to regain their past growth perfor-
mance: firstly, they have to undergo
a significant amount of cost ration-
alisation by spending on technology;
secondly, airlines such as Emirates will
have to look at retaining their status
as differentiators in providing travel
experiences and, thirdly, they have
to introduce aggressive social media-
based marketing strategies to attract
millennial travellers.
“If Emirates has to remain an endear-
ing airline, it has to get the youngsters to
fly with them. But the question is whether
millennials are travelling for the seat or
the destination. Various trend studies
say youngsters go by what their friends
recommend. So airlines have to use social
media aggressively to attract the new
age travellers,” he says.
Despite the sustained growth in air
passenger traffic globally, why do airlines
periodically go bust in many countries? In
India, two airlines – Kingfisher and now Jet
Airways – were grounded in a short span of
three to four years.
“The airline industry – the travel and
transportation industry – has been growing
at 4-5 percent annually in the last several
years, and is projected to grow at similar
pace in the coming 10 year-period (as per
the core user group of airlines and other
related agencies). The travel industry glob-
ally is estimated at $8 trillion, which is about “Some investors who
9.5 percent of (global) GDP. It is projected did not have enough
to grow to $10 trillion – 10 percent of global
GDP – by 2028. This means $1 out of every
knowledge about the
$10 spent is on travel. With further expan- aviation industry also
sion in GDP, this sector is only going to started airlines”
grow further,” Mathew says.
“Occasionally these blips [airlines going u Mathews is helping companies and organisations maximise their efficiency and manage their growth
bust] will happen. They are mainly linked
to country-specific or global develop- unsustainable levels in recent years. As
ments,” Mathews believes. against the global average airfare of $103
In India, he says irrational competition
is the major cause of financial strain on
airline operators.
4.4%
The Middle East aviation industry’s
per flying hour, the Indian average is just
$40-$50. Besides, some investors who did
not have enough knowledge about the
“The yield per RPKs (revenue passen- compound annual growth rate (CAGR) for aviation industry also started airlines.”
ger kilometres) has been dropping to 2018 – 2037, according to IATA projections After working for Emirates for 15 years,
36 Vol. 20/33, September 2019

u Etihad Airways was the most punctual Middle Eastern carrier in the first seven months of 2019
Regional outlook
u Emirates carried 58.6 million passengers
over the financial year 2018-2019
Middle Eastern carriers are expected to
report an $800m net profit in 2019 (up
from a weaker $600m in 2018). The
expected net profit per passenger is $3.33
(1.2 percent net margin). The region has
been challenged by the earlier impact of
low oil revenues, conflict, competition from
other ‘super-connectors’ and setbacks to
particular business models, leading to a
sharp slowdown in capacity growth (after
more than a decade of double-digit growth,
passenger capacity growth was halved to
6.7 percent in 2017). The region reported
4.7 percent capacity growth in 2018 and is
expected to slow to 4.1 percent in 2019,
which together with restructuring is helping
to generate a recovery.
Information courtesy of the International Air
Transport Association (IATA)
arabianbusiness.com
“Airlines in India
have huge potential
to emerge as global
players if their business
model is right”
Mathews still has a strong connection to
the UAE, with IBS having offices in Dubai
and Abu Dhabi, meaning he travels to the
emirates on a regular basis.
“I am connected to Dubai, [am] passion-
ate about aviation and grateful to Emir-
ates,” Mathews says.
“Besides, Dubai is a great place to do
business. Most of my business meetings
take place in Dubai as people love to travel
to Dubai.
What he hopes to see, however, is Indian
airlines competing on the global scale, in
the same way that Emirates has done.
“Airlines in India have huge potential to
emerge as global players if their business
model is right,” he says, adding “I under-
stand the airline industry well and I am
confident that I can make a difference”.
$5bn
Etihad Airways’ recorded passenger
revenue for 2018, when it handled
17.8 million travellers
/ V K M AT H E WS
Cautious optimism
Airlines heading for a
decade in the black
The International Air Transport
Association (IATA) forecasts the
global airline industry’s net profit to
be $35.5bn in 2019, slightly ahead
of the $32.3bn net profit in 2018.
Highlights of expected 2019
performance include:
– The return on invested capital is expected
to be 8.6 percent (unchanged from 2018)
– The margin on net post-tax profits is
expected to be 4 percent (basically
unchanged from 3.9 percent in 2018)
– Overall revenues are expected to reach
$885bn (+7.7 percent on $821bn in 2018)
– Passenger numbers are expected to reach
4.59 billion (up from 4.34 billion in 2018)
– Cargo tonnes carried are expected to reach
65.9 million (up from 63.7 million in 2018)
– Slower demand growth for both passenger
traffic (+6 percent in 2019, +6.5 percent in
2018) and cargo (+3.7 percent in 2019, +4.1
percent in 2018)
Lower oil prices and solid, albeit slower,
economic growth (+3.1 percent) are
extending the run of profits for the global
airline industry, after profitability was
squeezed by rising costs in 2018.
It is expected that 2019 will be the 10th
year of profit and the fifth consecutive year
where airlines deliver a return on capital that
exceeds the industry’s cost of capital,
creating value for its investors.
“We had expected that rising costs would
weaken profitability in 2019. But the sharp fall
in oil prices and solid GDP growth projections
have provided a buffer. So we are cautiously
optimistic that the run of solid value creation
for investors will continue for at least another
year. But there are downside risks as the
economic and political environments remain
volatile,” said Alexandre de Juniac, IATA’s
director general and CEO.
37
 “I think the
industry is
definitely
saturated”
u The new weekly debate show will feature two speakers with opposing views on a key topic
ABTV Crossfire debate:
Is influencer marketing
worth the investment?
In the latest episode of our new online weekly debate
series we looked at the divisive issue of influencers
A FIRST-OF-ITS-KIND IN THE UAE,
Crossfire will explore a range of
contrasting views on some of the region’s
key issues, tapping into some of the
everyday conversations generating
heated debate across the region’s offices
and social platforms
A weekly show from ABTV, the online
television arm of Arabian Business, the
format will feature two speakers with
opposing views on a key topic, with the
debate running for around 20 minutes.
The discussion will be moderated by
ABTV’s Shruthi Nair, followed by an
interactive Q&A session with a live
in-studio audience.

On the second episode, which aired
last Wednesday, September 18, Taghreed
Oraibi, Business Director at BPG Orange
and Anthony Permal, Multichannel
Marketer at Julphar, argued whether
influencer marketing is really worth the
investment.
According to a survey carried out by
BPG Orange and YouGov, 71 percent
71%
Survey respondents who said
influencers impact their spending
of respondents said their purchasing
decisions were affected by the content
posted by influencers. Another survey,
by the same researchers, revealed that 94
percent of in-house marketers in the UAE
believe that social media marketing has a
very significant impact.
Mixed reactions
Despite this, influencers have attracted
mixed reactions regionally and globally,
with credibility being one of the key factors
called into question.
Quoting an example, Permal said:
“There’s one very well-known influencer
and content creator who in general
creates great content on his own. He was
hired by one of the cellphone companies
to do a promotional campaign and he
was so out of place... as that’s not his style.
He was paid good money but, in the end,
it was a laughing stock online.”
Another problem with influencer
marketing today is that 47 percent of
influencers charge for their messages - in
terms of freebies - and another 47 percent
charge for each post/video uploaded.
Vol. 20/33, September 2019

Followers are often left wondering if the
content posted is genuine virtual word of
mouth or if the influencers they choose
to follow are just acting as marketing
tools for a particular brand or company,
especially when they fail to mention if a
post is sponsored or not.
For a brand, one of the key issues here
is measurability. “Measurement is one
of the most difficult parts of influencer
marketing. But there are ways, like a
redeemable coupon. If your business
is online, then you can locate the URL
link that measures the click-throughs,
acquisitions and so on,” said Oraibi.
However, Permal argued that a
discount is not something that a
customer in the region is used to asking
for. They are, in fact, used to demanding
it using apps like The Entertainer, Zomato
Gold etc. which they purchased.
“We have a very high disposable
income in the region and people usually
tend to spend money on things that will
make them look good. You don’t expect
a lot of people to say, ‘here’s my coupon I
want to get a discount’. They will instead
arabianbusiness.com
A BT V / C R O S S F I R E
u Crossfire’s aim is to tap into some of the most important conversations generating heated debate
across the region’s offices and social media platforms
use an app like an The Entertainer for
discounts,” he argued.
Payment issues
However, Permal and Oraibi both agreed
that the way influencers charge and are
CROSSFIRE
paid by brands - i.e. through freebies and
by payments per post - is wrong. Less than
30 percent of influencers charge for any Get involved!
legitimate action taken by their followers Do you want to be an
to support the reach and sales of the subject
they are marketing. audience member at one
Only 29 percent charge per click and 6 of our upcoming shows?
percent charge per acquisition. “The way
we pay now in the industry is based on Here is a selection of our
outputs and not outcomes. And this has upcoming debates:
to change. When I charge an influencer,
micro or macro, based on acquisition r Does artificial intelligence (AI) bias
or cost per click or an action, this makes exist?
more sense to me,” said Oraibi. r Vegan restaurants vs steakhouses
Oversaturation of the influencer r Are UAE school fees too high?
market in the UAE was also addressed r In the midst of streaming video services,
during the debate, after an audience is cable TV dead?
member addressed the question. “It r Is advertising dead?
seems there are a lot of influencers per r Should South African expats pay
capita in the region. Is there such a thing income tax?
as being over-influencered?” asked Bernd r Bricks vs clicks: Is e-commerce
Debusmann Jr of Arabian Business during replacing malls?
the audience Q&A. r Will cryptocurrencies go mainstream in
“I think the industry is definitely the near future?
saturated but it goes back to the r Is taxation good for the economy?
definition of influencer. We put bloggers,
Instagrammers, Youtubers under the We film the series every Thursday
term influencer. Not all of them are. So afternoon. Email shruthi.nair@itp.com
this needs to change,” replied Oraibi. for more information on Crossfire, ABTV’s
Who won the influencer debate and newest weekly debate show.
was our Crossfire audience swayed? Catch up with all the latest ABTC videos at
Check the online video to find out. www.youtube.com/user/arabianbusiness
39
F E AT U R E
/ ART
 / A RT

Artwork is growing into the ideal asset class

for investors in the Middle East, as the region’s art
scene continues to flourish
arabianbusiness.com 41
BY SHRUTHI NAIR
u The 500-year-old artwork by
Leonardo da Vinci was auctioned two
years ago for a staggering $450m
C
OMPETITION, SATURATION
and a global economic slow-
down have forced residents in the
Middle East to stray away from
the science of doing business and explore
the art of making money. As Andy Warhol
once said, “Being good in business is the
most fascinating kind of art. Making money
is art and working is art and good business
is the best art.”
Strangely, Warhol was an artist first and
these are not comments usually associated
with someone like him. Unsurprisingly,
his views did not go down well in the art
community. But, is it impossible to dissoci-
42
ate money and art in today’s world?
If you’ve been to any prominent art show
or art gallery, perhaps you know exactly
what I am talking about; the elitist atmos-
phere and the smell of heavy bills in Louis
Vuitton purses held against Gucci gowns
that aren’t half as fake as the ones you’d see
$75m
The starting bid for ‘Salvator Mundi’
painting, before reaching the final
price of $450m
at a local fair or exhibition like the Global
Village in Dubai.
In the rich man’s world
There aren’t documented reasons for the
correlation between the taste for the arts
and possession of riches, but there are
some obvious ones. To begin with (and to
put it simply), purchasing art is expensive.
Prices at Christie’s, an international
auction house with a strong presence in
the UAE and the Middle East, can go up
to $100m. Leonardo da Vinci’s Salvator
Mundi recently sold for a record $450m at
auction. A 1986 sculpture by Jeff Koons was
Vol. 20/33, September 2019

u Caroline Louca-Kirkland, MD of Christie’s Dubai,
says art is more accessible than ever
u Sylvain Gaillard, CEO of Dubai Opera Gallery,
says ‘Dubai is a small representation of the globe’
sold for $91.1m, setting a new record for the
most expensive work sold by a living artist.
Secondly, for many, art collection has
been a legacy trade that has been passed on
to them by their parents and grandparents.
And, finally, it is also a status symbol.
According to the Knight Frank Luxury
Investment Index, wealthy people have
spent more money last year on art than
investment grade wine, watches, coins,
and even luxury cars.
So is art just for the rich? The manag-
ing director of Christie’s Dubai thinks
otherwise.
“Art is more accessible than ever, from
arabianbusiness.com
/ A RT
u Opened to the public on November 11, 2017, Louvre Abu Dhabi is considered the first universal
museum in the Arab world and is strategically located in the heart of the Saadiyat cultural district
u Alserkal Avenue is a cultural district consisting of art galleries, non-profit organisations and home-
grown businesses in the Al Quoz industrial area of Dubai
“Unquestionably, there in the region is to demystify the auction
process, which we do through transpar-
is an increasing appetite ency and accessibility, regularly host-
across the Middle East ing events to meet with new and existing
for both contemporary collectors and art enthusiasts. Members of
the public always attend our exhibitions to
art and Islamic art from learn more about art from the region, and
the region” then they can experience the sale first-
hand, bid in person or online, and join the
affordable works on paper through to events and activations that Christie’s hosts
masterpieces by modern Arab artists – throughout the year.”
prices at Christie’s can vary from $1,000 But can you even put a price on art and
to more than $100m,” says Caroline creativity? While it is easy to put a price
Louca-Kirkland. on an active artist who has already sold
She adds: “A key part of Christie’s work his work by using the scientific business
43
F E AT U R E
/ ART
u A sculpture by US artist Jeff Koons was sold for
$91.1m in May this year by Christie’s in New York –
more than $20m over its estimated price
formula based on the rarity, provenance,
and previous sales for the artist’s work,
putting a price on a new entrant’s work
involves a lot of negotiation, back and forth
with galleries, and could, in fact, require a
lot of expert guess work.
Despite this, galleries, auction houses
and collectors are participating in the
gamble, and, why not? According to
Deloitte’s Art & Finance Report 2017, the
market is predicted to grow in worth (held
in collections) by up to $53.6bn by 2026
from $86.4bn in 2016. Last year, sales for
just Christie’s artwork totalled $7bn.
Hungry for more art
The appetite for art in the region has always
been strong and this thirst was quenched
by the works on display in Cairo, Damascus
and Tehran, which was, back in the 20th
century, deemed as the cultural capitals of
the region. However, geopolitical tensions
and economic instability have shifted
the spotlight to the young, but more
contemporary and diverse, hub of Middle
East – the UAE.
As Sylvain Gaillard, CEO of Dubai Opera
Gallery puts it: “Dubai is a small represen-
tation of the globe”, with the diversity not
just in nationality, but also in tastes, culture
and, most importantly, wealth classes.
“Through the last 15 years, we have
witnessed a shift in taste within the
collector’s community, who previously
purchased art from their homelands,
44
u Palestinian modernist Ismail Shammout’s The
Way will be part of Christie’s third Middle Eastern
Modern & Contemporary Art auction on October 23
“We see people
coming to the gallery
and they’re looking to
purchase a piece purely
from an investment
perspective”
whether in Lebanon, Egypt, or elsewhere.
Today, collectors are looking for the very
best examples of Middle Eastern art, while
their tastes are also becoming more inter-
national,” Louca-Kirkland says.
To underscore the growing appetite for
art collecting across this region, buyers
from the Middle East who participate
in Christie’s regional and global sales
increased by 37 percent in 2018.
According to Sotheby’s, another auction
house, the number of Middle Eastern
clients participating in its global sales has
risen by 76 percent over the past five years.
The surge in interest from the UAE is even
stronger – participation there is up 157
percent, CNN Money has reported.
Artistic initiatives in the region are on
$63,000
The estimated price of Syrian
artist Louay Kayyali’s portrait of
Umayma Hussein Ibish
u Iranian artist Hadieh Shafie’s 2011
creation is projected to fetch between
$56,000 to $75,000
the increase – there is tremendous oppor-
tunity in Saudi Arabia, where there is focus
on art and cultural development as part
of the Vision 2030 road map. The Louvre
Abu Dhabi, apart from its permanent
collections, hosts four temporary exhibi-
tions every year giving an opportunity to
talents within the country. Sharjah Bien-
nial, Warehouse 421, Alserkal Avenue,
and even Dubai Design District are all
manifestations of the country’s thriving
art scene.
“Unquestionably, there is an increasing
appetite across the Middle East for both
contemporary art and Islamic art from
the region. The opening of the Louvre
Abu Dhabi, the Sharjah Biennial, and the
growth of non-commercial art centres in
the region have all increased awareness of
and demand for artwork from this region.
There is a widely-held understanding that
a robust cultural landscape contributes to
the present economy and ongoing legacy
of the region,” Louca-Kirkland says.
Priceless?
Another shift in taste has been with regards
to the purpose of purchases. Up until a few
years ago, art was purchased with the sole
aim of consumption - either by art lovers
who genuinely understood and valued the
priceless piece of work they “acquired”
or by the wealthy who wanted to buy for
the sake of their status symbols - but, in
both cases, it would be a binary two-step
Vol. 20/33, September 2019

u Iranian painter Jafar Rouhbakhsh’s abstract
composition in turquoise and blue, circa late 1980s
transaction of selling and buying. However,
in the last few years, individuals, as well
as organisations, have come to realise
the investment potential of legendary art
pieces and are exploiting it efficiently.
The economic impact of art in west-
ern nations has been well documented.
Earlier this year, Forbes had reported that
the growth in arts and cultural economic
activity made up 4.3 percent of US gross
domestic product (GDP) for 2016. That
equates to more than $804bn in economic
activity for that year alone.
From a social standpoint, many organi-
sations globally, and in the region, have
been investing heavily in the arts as part
of their cultural philanthropic efforts. This
does benefit companies monetarily too, as
consumers and customers are increasingly
arabianbusiness.com
u A work by Egyptian artist Tahia Halim in 1975
will be auctioned by Christie’s this October
u Syrian master artist Louay Kayyali’s
portrait of Umayma Hussein Ibish in 1962
leaning towards brands and firms that are
embracing efforts in social responsibility
and community involvement.
Narrowing it down further to an individ-
ual level, art is a great personal investment.
And the most immediate way to discern its
value is by borrowing against it. Deloitte
estimates that the outstanding value of
loans against art in America reached $17bn
to $20bn in 2017, up 13 percent from the
previous year.
“Five years ago people would just come
to the gallery and buy pieces because they
knew the artist and they liked it. More and
more, we see people coming to the gallery
and they’re looking to purchase a piece
purely from an investment perspective.
When I recommend something for some-
one that is passionate about art, the discus-
/ A RT
sion would be very different compared to
the discussion I would have with someone
that’s looking at art as an alternative asset,”
says Gaillard of Dubai Opera Gallery,
adding that when someone goes to him to
buy purely from an investment perspec-
tive, he has to, sadly, strip the emotional
quotient and manage the buyer’s expecta-
tion accordingly.
Economy – you got nothing on me
Now that we are talking big bucks,
investment and huge sales, you might be
wondering about the effect the ongoing
economic cycle has had on it. The answer is
zilch. Art is one of those few rare industries
that isn’t affected by the economy or
economic cycles, exactly how the ultra high
net worth (UHNW) individuals aren’t really
affected by economic cycles. It is always the
middle class and the surrounding classes
(i.e. upper and lower middle classes)
that are first affected by any small or big
economic ripples.
“The art market is like another market.
But the only thing the art market is never
correlated to the economics. The only small
ties we have been able to link the art market
with is the real estate market. Usually when
the real estate market goes up, the art
market goes up. Just like any other market,
now and then some styles and artists tend
to go out of favour for a couple of years and
the market tends to pick them up again. It
is very unpredictable.”
He adds: “As far as we are concerned we
have seen a shift in the buying behaviour of
the collectors. We have seen a shift to the
opposite end of the spectrum. People have
started buying more expensive and more
decorative art. What seems to be out of
favour are the mid-priced artworks. People
would rather allocate money to a two-way
tested name or go for young and up and
coming artists because the price point is
going to be low. That’s what we have seen
in the last two to two and a half years.”
But what is considered inexpensive
in the art world is still a matter of heated
debate. By definition, art is the expression
or application of human creative skill and
imagination. Is it fair to put a price on crea-
tivity? If it is, then is it really fair to make
the prices so unaffordable that only the
rich and wealthy are allowed the privilege
of enjoying it, especially when the artist
behind the work seldom benefits from the
auction sales?
45

ENTREPRENEUR OF THE WEEK
Hala Kazim,
founder of Journey
Through Change
A SERIES OF REMOTE
hiking trips helped Hala
Kazim detach herself from
daily familiarities in a bid to
fight social restrictions and
rediscover herself. In a bid to
help women across the Arab
world to do the same, Kazim
became a certified counsellor
and Neurolinguistic
Programming coach, setting
up her own consultancy
company Journey Through

Arabian Business shines a light on the all-important SME sector
in the region, from success stories and VC news to expert insights
Change (JTC) in Dubai.
Today, she helps her clients
take a journey to their inner
selves through various
physical activities,
workshops and lectures.
$8,710
The cost of JTC’s six-day
journey of self-reflection in
Como Shambhala Resort in Bali
Hala Kazim
Why hiking?
I read about the famous path
in Spain, Camino de Santiago,
in a Paulo Coelho book, and
one day I decided to hike it. I
did the hike for seven days
and then did another in
Austria – by myself – that was
very hard, I hiked in the forest
alone for the first time, and
then I did Switzerland too. It
was very rich and I thought,
why don’t I bring women
from our region to do
something like this? So I
started. I just wanted to try
something new, because we
don’t have hiking [in our
culture]. We’re a desert
country. It was eye-opening.
What are the trips meant to
teach or offer clients?
It’s a journey to yourself.
When I did it, first I learned to
be my own friend. When you
Vol. 20/33, September 2019

q WHEN YOU WALK
ALONE FOR HOURS,
YOU MAKE A CHOICE
TO BE YOUR OWN
FRIEND AND IT
TEACHES YOU HOW
TO FACE YOUR FEARS
AND DO THINGS YOU
DON’T WANT TO
THINK ABOUT”
walk alone for hours, you
make a choice to be your own
friend and it teaches you how
to face your fears and do
things you don’t want to
think about.
Lots of things happen while
you walk. It’s a process, you
don’t just accept yourself.
So I take you away from your
community, your husband,
your children and you’re alone
with me and a few ladies you
arabianbusiness.com
u Apart from hiking trips, JTC also conducts corporate events including lectures, workshops and team building
hardly know. We do a lot of
lectures, workshops. We have
activities like horse-riding,
hiking, kayaking, cycling,
cooking classes. Each trip has
its own [itinerary].
What was the reaction to JTC
when you first started, and
who is your target market?
The pilot was three people I
knew and it worked very well.
I knew that while walking, you
really could learn so much
about yourself. It was just
hiking then I added
consultation then lectures
and activities. It’s been 10
years now and we have
women aged 20 to 70. I didn’t
expect to have so many
different ages. It’s mostly
women from the GCC but I’ve
also had clients from India,
Jordan, Palestine and Syria.
What did you do before
starting JTC?
I’m an artist so I used to paint,
but I didn’t enjoy it. I just
knew I was good at it. I used to
have exhibitions and sell my
art. It wasn’t my passion, I just
knew how to do it.
Do you consider yourself to
be a life coach?
I give my life experience and I
share it with people from
whatever I’ve learned and
studied. I’m a combination of
things. I do counselling and I
mentor. I have different
activities through JTC and one
of them is the trips that I take.
We do workshops,
counselling, hiking, and
meditation. I help anybody
who wants help whether you
don’t like to go to work or you
have an issue with your
husband or you’re curious
about life and want to find
your passion. I help people
q I HELP PEOPLE
HELP THEMSELVES. I
DON’T CHANGE
ANYONE”
$30,000
The average salary for a life
coach in the Middle East,
Africa and Asia, according to
research by Ziprecruiter
help themselves. I don’t
change anyone.
What are your thoughts on
life coaching?
Not anybody can just go and
council and coach. So many
[life coaches] I know have so
many issues. Go solve your
problem first before you go
and help someone. They
come under a lot of
temptation and say, “I can
help you cure your
depression”, but I saw them
in workshops. Only a
psychiatrist or psychologist
can help you [with that]. It’s
very sad that we misuse the
word life coach.
There’s been a lot of
controversy over high prices
for life coaching. What is your
take on pricing?
It’s a market. I don’t think
anybody can tell you how
much you should charge.
People should be wise. If I’m
putting that much money,
what am I getting? People
have to understand [what
they’re paying for]. We have to
spread more awareness.
47
Liquid assets
AED36,000 to get fit?
Fitness has a high price at
Symmetry Gym in Dubai
u Symmetry Gym claims to be Dubai’s most expensive fitness centre
Arguably Dubai’s most
expensive gym has
launched a 28-day
programme costing
AED36,000.
Symmetry Gym, based in
Al Quoz, was launched in
Dubai in 2011 by Amir
Siddiqui, targeting wealthy
individuals in the emirate.
The New Yorker charges
anything from AED4,397 per
month for his long-term Fit
Body Forever 12-month plan;
AED5,497 per month for the
Radical Physique
Transformation 12-week
plan; and AED8,947 per
month for the Extreme
Fitness Recharge six-week
plan. And now he has
launched what has been
described as “the most
expensive and intensive 28
days of fitness in the UAE”.
He told Arabian Business:
"It’s basically a 28-day deep
48
dive into the client’s lifestyle,
but they hand over everything
to me, their schedule,
everything, their sleep,
weight, food, everything is
given to me; not their wife, not
their assistant, me.”
The 28-day programme
involves intensive workouts,
using the Fission Fusion
training system, designed by
Siddiqui – “created,”
according to the gym’s
website, “with the
understanding that the
human body can be trained
as constituent parts (Fission)
or as a whole or set of wholes
(Fusion), but not both at the
same time” – as well as the
latest performance mind
techniques with support from
the entire gym personnel.
This includes 24-hour
support from Siddiqui on the
phone, online, face-to-face,
food shopping, fridge detox,
mentoring and more.
The programme also
includes daily meals, a
weekly massage and daily
performance assessments.
Asked to describe it
further, Siddiqui said: “It’s
black ops. It’s covert.”
And whether it would
involve an intensive boot
camp with periods away
from home, he added:
“Depends what I decide, I’ll
put them in a goddamn hotel
in Barsha if I want.”
Siddiqui explained the
reasoning behind the fees he
charges: “I started with one
rate and I had to increase it.
Everyone asks why is it so
expensive? Because there is
demand for it. It’s just a
supply and demand thing, it’s
basic economics."
He says his gym, which
has 100 members, hasn't
been hurt by the recession.
SOCIAL MEDIA
Dubai named among
world’s top cities for
'Instagrammability'
#Dubai was posted on
Instagram 79 million times
over the summer months
Dubai has been listed in the top five most
popular ‘Instagrammable’ holiday
destinations for the summer of 2019,
according to Wego, the largest online
travel marketplace in the MENA region.
#Dubai was posted on Instagram 79
million times to secure fifth place in the
rankings. The emirate is also the most
‘Insta-worthy’ place on the planet for
food, where 26 percent of all Dubai
hashtags include #food. Overall, London
won by a huge margin, with over 118
million hashtags, beating Paris with a
margin of 17 million, followed by Nice
with 87m and New York with 83 million.
MUSIC
Bruno Mars to headline New
Year’s Eve on Yas Island
Event will be followed by a family-
friendly festival on January 1
Grammy Award-winning American
singer, songwriter and record producer
Bruno Mars will perform at Abu Dhabi’s
du Arena on Yas Island on New Year’s
Eve, according to Flash Entertainment.
Mars is one of the world’s most
successful musicians, with total record
sales exceeding 130 million since the
release of two smash hits in 2010.
Vol. 20/33, September 2019
REVIEW | By Lubna Hamdan

Palm Grill: no fuss, all fun

A beachfront joint you can trust with fresh seafood, stunning views,
and a carefree atmosphere (leave your fancy wear at home)
The irony of beachfront
restaurants is that they are so
easy to run that most people
end up doing an exceptionally
bad job at keeping them alive.
How difficult is it to manage a
successful restaurant if the venue
practically sells itself? I mean, who
doesn’t want to chill by the beach
while sipping on a mocktail?
Add some summer tunes and
a good meal (sushi, burger, club
sandwich - it’s amazing how
much you can get away with if
you’re a beachfront joint) and
you’re good to go.
Yet, time after time, we are
disappointed by Dubai’s
beachfront restaurants. u You’re bound to enjoy your time with Palm Grill’s laid-back atmosphere
The reasons range from
throbbing house music (add
dehydration and it’s a recipe for a
headache), inattentive staff
(understandable when the
weather is hot), loud crowds (or no
crowd) and disappointing food
(no, sir, that does not taste or look
like the cod fish that I ordered).
Now enter an underrated yet
remarkably managed beachfront
restaurant: Palm Grill. Don’t let its
location at the glamorous
Ritz-Carlton, Dubai, fool you.
This joint will put you in a
carefree, happy-go-lucky mood
before the waiter even takes your
first order; and they will take your
order fast. Well-versed on the
menu and pleasantly welcoming u It overlooks city views on one side and the beach on the other
(they’re very much entertaining
conversationalists), staff at Palm as you don’t have to worry about which we highly recommend. You able to hear each other and won’t
Grill seem to genuinely enjoy their fishy dishes (pun intended). We won’t find exotic sauces or too have to scream over the tunes) to
jobs. We reckon part of the reason have tried and tested them and many spices on the meat, the delicious grilled specialties,
may be the venue’s unobstructed you won’t be disappointed, but if because it tastes rich on its own - make Palm Grill the ideal
and stunning views of the seafood is not your preference, and is better for your waistline destination to leave your heels and
Arabian Gulf and the magnificent the good news is there is plenty of sans extra sauce calories. suits at home.
Dubai Eye. tender and fresh meat to go As for the overall atmosphere, This is a no fuss, all fun, safe
Now for the food: go for the around too. the restaurant takes relaxation to place if – like us – you haven’t had a
grilled seafood specialties like the We tried the Australian lamb a whole new level. Every detail, minute to breathe (metaphorically)
king prawns, salmon and seabass chops and grain fed beef tenderloin from the island music (you’ll be this entire working week.

arabianbusiness.com 49
 The attacks on Saudi Aramco
The missile strikes are expected to cause weeks of
disruptions to Saudi Arabia’s oil output

Severe damage Responsibility Aramco IPO Impact on India Gold market

The attack is the single worst
sudden disruption to the oil
market. According to Saudi
Arabia’s Foreign Ministry,
the attack cut oil produc-
tion by 50 percent of the
Abqaiq facility’s 5.7 million
barrels per day of oil, totalling
approximately 5 percent of
global supply.
While Yemen’s Iranian-
backed Houthi rebels claimed
responsibility for the attacks,
American and Saudi officials
have cast doubts on those
claims. A senior US official
was quoted as saying that
while the Houthis claimed
to use 10 drones, one facility
was hit at least 17 times.
According to Aramco chair-
man Yasir Al Rumayyan, the
attacks will not derail prepa-
rations for the state-owned oil
giant’s highly anticipated IPO.
The chairman has refused to
commit to a timetable, saying
that the company is ready
to do it at any point over the
next 12 months.
Analysts have noted that
a prolonged disruption to
Saudi production could have
a major impact on India’s
import bill and fiscal deficit.
A surge in crude prices
beyond $70 per barrel is also
likely to have a cascading
effect on domestic industry
and inflation.
In the immediate aftermath
of the incident in Saudi
Arabia, gold prices rose as
much as 1.5 percent before
settling back under the
$1,500 per ounce level. If oil
prices were to surge above
$80 per barrel, further price
increases are likely as inves-
tors seek safe haven assets.

50 Vol. 20/33, September 2019

 SAVE
THE
DATE
MONDAY 30TH SEPTEMBER 2019
Rove Downtown Dubai
The StartUp SME Academy serves as a hub for
conversation about the latest business opportunities, start-up disruptions,
funding deals, legal and regulatory steps to follow, and much more.

From an entrepreneur with just an idea, to established SME leaders,

government representatives and well-known investors,
our quarterly breakfast workshop is a perfect place to get introduced
to the region’s growing start-up community.

For more information contact:

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