Unveiling a Pakistani Fashion Sensation in the markets of UAE

Unveiling a Pakistani Fashion Sensation in the markets of UAE

Submitted by Alisha Zaheer (21-445)

Esha Amir (21-059)
Zainab Mukhtar (21- 263)
Zarlish Najeeb (21- 284)

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Unveiling a Pakistani Fashion Sensation in the markets of UAE

Unveiling a Pakistani Fashion Sensation in the markets of UAE

Executive summary

Embarking on international expansion, "Forecast" aims to penetrate the diverse UAE

market. The cultural landscape is a fusion of tradition and modernity, emphasizing Islamic

heritage and a consumer culture driven by luxury and digital trends. Fashion preferences strike a

balance between traditional Islamic garments and global trends, adapting to a hot climate with a

preference for breathable fabrics. Political stability and adherence to government regulations are

vital, considering the VAT system and leveraging economic partnerships like the GCC. The

UAE's high per capita income and consumer-driven economy offer opportunities for premium

and luxury brands, with awareness of currency fluctuations and compliance with local customs

regulations essential.

Cultural sensitivity and understanding diverse fashion preferences are crucial, aligning

with the fast-paced lifestyle of UAE residents who demand comfortable and stylish casual

clothing. Digital adoption is high, emphasizing the need for a robust online presence and e-

commerce capabilities. Strategic planning involves human resource management, risk mitigation

strategies addressing currency fluctuations and political instability, and cultural analysis to align

with local values. Language considerations include recognizing Arabic as the primary language,

and adapting fashion trends to the modest and diverse preferences in the UAE. Environmental

analysis emphasizes leveraging the UAE-Pakistan Free Trade Agreement, complying with

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labeling requirements, and protecting intellectual property rights. Understanding local business

regulations, taxation, and joining relevant trade associations is crucial.

Background information

Forecast Clothing, a Lahore-based brand located in Johar Town, operates in the dynamic

landscape of the Pakistani fashion industry. The region has witnessed a steady growth in the

apparel retail market, with total revenues reaching $6.5 billion in 2020 and exhibiting a

compound annual growth rate (CAGR) of 2.1% from 2016 to 2020. Notably, the menswear

segment emerged as the most lucrative, contributing $3.2 billion, constituting 49.1% of the

overall market value in 2020. The surge in online shopping in Pakistan has significantly

impacted consumer preferences, driven by the allure of convenience, a diverse product range,

and cost-effectiveness offered by online retailers. As per research from researchandmarkets.com,

this shift in consumer behavior provides a lucrative avenue for brands like Forecast Clothing to

explore.

Pakistan, characterized by strategic endowments and development potential, is grappling

with the challenge of harnessing the demographic dividend presented by its youthful population.

The increasing proportion of youth in the country not only signifies a potential demographic

dividend but also poses the challenge of ensuring adequate services and employment

opportunities, as outlined by the World Bank.

To capitalize on the burgeoning fashion industry and the rising trend of online shopping,

Forecast Clothing could strategically position itself for growth. One avenue to explore is the

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establishment of an online store, thereby broadening its reach and offering customers a more

convenient shopping experience. Additionally, tapping into the power of social media marketing

and collaborating with local influencers could enhance brand visibility, fostering a wider

audience reach.

Navigating the Dynamic Landscape of the UAE Market with a Comprehensive Analysis

The United Arab Emirates (UAE) emerges as a thriving market, strategically focusing on

economic diversification and embracing digital transformation, particularly within the dynamic

realm of the fashion industry. Since 2009, it has consistently ranked as the primary U.S. export

market in the Middle East and Africa, attracting over 1,500 American fashion companies. While

the COVID-19 pandemic has left a noticeable impact on the UAE's economy, causing

contractions in oil prices and reduced revenues, the nation's resilience is expected to pave the

way for a return to pre-pandemic levels of economic activity by 2022 (United Arab Emirates -

Market Overview 2020)

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Aligned with its economic diversification agenda, the UAE is channeling substantial

investments into the fashion sector, fostering innovation and growth. Proactively seeking to

position itself as a fashion hub, the country is witnessing increased attention and budget

allocations for the development of its fashion and design landscape. (United Arab Emirates

Market Analysis:: Fitch solutions 2022) Forecasts project a significant Compound Annual

Growth Rate (CAGR) for the UAE's fashion industry in the coming years, driven by strategic

investments and a growing appetite for diverse fashion offerings. In the realm of technology, the

fashion industry in the UAE is experiencing notable advancements, supported by a robust

telecommunications network and a burgeoning Information and Communication Technology

(ICT) sector. Recognized globally, the country holds the 24th position out of 132 nations in the

Global Innovation Index, solidifying its status as a leading player in the Middle East for the

export of fashion-related ICT services. (UAE Market Review and forecast 2021 2021)

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Furthermore, the UAE's commitment to economic diversification extends to the fashion

industry, as seen in its emphasis on sustainable and eco-friendly practices. Embracing a forward-

thinking approach, the nation seeks to integrate environmentally conscious measures, promoting

sustainable fashion and reducing the industry's ecological footprint. Despite short-term

challenges arising from the aftermath of the pandemic, the UAE's visionary stance, coupled with

a robust financial standing and considerable sovereign wealth, positions it as an enticing and

enduring market for the evolving landscape of the fashion.

Market Entry Strategy

Forecast Clothing aims to strategically enter the UAE market through a phased approach.

Initially, the brand will explore collaborations with established influencers to showcase its T-

shirts. This approach allows for quick market penetration and leverages the existing customer

base of the local retailers. Simultaneously, launching an e-commerce platform is crucial to tap

into the tech-savvy consumer base prevalent in the UAE, where online shopping is a popular

trend. This dual approach ensures a broad market presence and caters to diverse consumer

preferences. Hellgren, N. (2018)

Distribution Channels

To establish a strong physical presence, Forecast Clothing will open branded stores in

prominent shopping districts of major emirates such as Dubai and Abu Dhabi. These locations

attract both local residents and tourists, providing a significant opportunity for brand visibility.

Lloyd's Bank Trade. (November 2023).Additionally, forging partnerships with well-known local

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boutiques will further extend the reach to a wider audience. Strengthening the online presence is

equally vital, requiring optimization of the e-commerce platform to provide a seamless and

convenient shopping experience.

Pricing Strategy

Implementing a competitive pricing strategy is crucial, taking into consideration local

market conditions, currency exchange rates, and potential import duties. Periodic promotional

offers, especially during key events like Ramadan and Eid, can enhance brand visibility and

attract customers during peak shopping seasons. This approach ensures the brand's affordability

while maintaining its value proposition. U.S. Commercial Service. (2019, August 7).

Competitive Pricing Strategy Development; PKR 7,500,000

This allocation covers the research and development of a competitive pricing strategy. It

involves analyzing competitors, understanding local market conditions, and considering currency

exchange rates and import duties.

Promotional Offers during Key Events; PKR 5,250,000

Allocate funds specifically for promotional offers during key events like Ramadan and

Eid. This includes discounts, special bundles, or other promotional activities to enhance brand

visibility and attract customers during these significant periods.

Adjusted Budget for Pricing Strategy; PKR 13,750,000

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This adjusted budget includes both the competitive pricing strategy development and the

budget for promotional offers during key events. This ensures that you have dedicated funds for

both establishing a competitive baseline pricing structure and executing targeted promotions to

boost brand visibility during important cultural events.

Promotional Tactics

Leveraging social media platforms extensively is essential for reaching the tech-savvy

and digitally connected UAE population. Collaborating with local influencers who align with the

brand's ethos helps in building credibility and trust. Creating engaging and culturally relevant

content is key to resonating with the diverse preferences of the UAE population. Sponsorship or

participation in local fashion events provides opportunities for direct consumer engagement and

increased brand recognition. AlQubaisi, A. B. (2001)

Market Risks Mitigation

Diversifying the product range is essential to cater to various preferences and stay

adaptable to evolving fashion trends. Establishing strong relationships with multiple suppliers

helps mitigate supply chain risks and ensures a steady flow of inventory. El-Sayegh, S. M. (2014,

March 11). Close monitoring of market trends allows for anticipatory adjustments to strategies,

ensuring alignment with shifting consumer behaviors.

Supply Chain Management

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Developing a robust supply chain management system is critical to minimize delays in

production and distribution. Establishing strategic partnerships with local suppliers for key

materials reduces dependency on international sources, mitigating risks associated with

geopolitical events or disruptions in the global supply chain. Implementing efficient logistics

ensures timely delivery of products to stores and customers. Albaloushi, H., & Skitmore, M.

(2014, February 10).

Currency Exchange Risk Mitigation

Implementing hedging strategies is crucial to minimize the impact of currency

fluctuations on pricing. Consider setting stable pricing in local currency while periodically

reviewing and adjusting based on market conditions. This approach provides transparency and

stability for both the brand and customers, fostering trust and confidence. Abbas, W. (2019).

Regulatory and Compliance Assurance

Engaging legal experts to navigate local regulations is imperative for ensuring

compliance with import/export laws and labeling requirements. Maintaining meticulous records

demonstrates adherence to all regulatory standards and facilitates a smooth business operation.

Proactively staying updated on any changes in business regulations helps in avoiding legal

complications and disruptions. Sanaa Ashour. (2020).

Customer Engagement

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Prioritizing customer engagement is key to building a loyal customer base. Implementing

personalized experiences, loyalty programs, and responsive customer service fosters a positive

brand image. Actively seeking and incorporating customer feedback allows for continuous

improvement of products and services. Participation in community events enhances the brand's

connection with the local audience, creating a sense of belonging and loyalty. Moncey, A. A., &

Baskaran, K.

Adaptation to Cultural Sensitivities

Tailor marketing campaigns and product offerings to respect and resonate with local

cultural sensitivities and values. Ensure that designs and messaging are culturally appropriate,

and consider launching limited-edition collections inspired by local traditions or festivities. Kiran

Thampi & Jed Metzger. (2022)

Sustainability Initiatives

Incorporating sustainable practices in both product manufacturing and packaging to align

with the growing eco-consciousness in the UAE. Kiran Thampi. (2017)Communicate these

initiatives through marketing channels, as environmentally friendly practices can appeal to a

broad spectrum of consumers.

Local Talent Collaboration

Explore collaborations with local artists or designers to create exclusive collections that

blend international fashion trends with local aesthetics. S. Ahammed & I. Cherian. (2014) This

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not only adds a unique touch to the product line but also fosters goodwill within the local

creative community.

Data Security and Privacy Compliance

Prioritize data security and privacy compliance for the e-commerce platform. Implement

robust cybersecurity measures to protect customer information and ensure compliance with local

data protection laws. This will build trust among customers and safeguard the brand's reputation.

Government Relations

Establish positive relations with local government authorities, seeking guidance on

regulations and exploring potential incentives for businesses. Participation in industry

associations and forums can provide valuable networking opportunities and keep the brand

informed about any regulatory changes. BenjaminJ. Lough. (2009)

Continuous Market Research

Investing in ongoing market research to stay abreast of changing consumer preferences,

competitor activities, and overall market dynamics. Regularly analyze sales data, customer

feedback, and market trends to identify opportunities for improvement and innovation.

Flexibility in Operations

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Maintaining operational flexibility to swiftly adapt to unforeseen circumstances or

changes in the market. This includes having contingency plans for disruptions in the supply

chain, economic downturns, or unexpected shifts in consumer behavior.

Employee Training and Diversity

Providing comprehensive training to employees on cultural nuances, customer service,

and product knowledge. Embrace diversity within the workforce to better understand and

connect with the diverse customer base in the UAE. Walaa Elsayed, Nagwa Babiker Abdalla

Yousif & Salah Gad. (2022)

Localized Marketing Strategies

Customizing marketing strategies for different emirates, considering variations in

consumer behavior and preferences. This approach ensures that the brand resonates effectively

with the unique characteristics of each market, contributing to stronger brand loyalty.

Long-Term Relationship Building

Focusing on building long-term relationships with customers through loyalty programs,

exclusive events, and personalized communication. This not only enhances customer retention

but also fosters positive word-of-mouth marketing, crucial for sustained success in the UAE

market.

Forecast competitors in UAE

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Splash is a well-established UAE-based fashion retailer that has been operating since

1993. It offers a wide range of products for men, women, and teens, including clothing,

accessories, footwear, and cosmetics. Splash has over 200 stores across 14 countries in the

Middle East, Africa, and India. Forecast Clothing is a Pakistani clothing brand that specializes in

T-shirts with unique designs and slogans. It was founded in 2020 and has gained popularity

among young and urban consumers. Forecast Clothing sells its products online and through

selected retailers in the UK and Europe. Global Data. (2023)

To analyze its performance and compare it with Forecast Clothing, if Forecast launches

its T-shirts in the UAE, we can consider the following factors:

Marketing Strategies

A study comparing the marketing strategies of Splash in the UAE market highlighted that

Splash's marketing strategy consists of aggressive selling with various offers and promotions for

its customers. This indicates that Splash has been proactive in its marketing approach to attract

and retain customers. Statista. (2023)

Market Size and Growth

The UAE apparel market is projected to grow by 2.61% (2023-2028), resulting in a

market volume of US$11.66 billion in 2028. This growth presents opportunities for both Splash

and Forecast Clothing to capture a share of the expanding market. However, they may also face

challenges from other competitors and changing consumer preferences. Statista. (2023).

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Competitive Landscape

The UAE retail market includes leading retailers such as Max, Splash, Carrefour, Lulu,

and others. Splash competes in this dynamic market, and if Forecast Clothing enters, it will need

to navigate the competitive landscape. Forecast Clothing may have an advantage in terms of

product differentiation and innovation, as its T-shirts feature original and creative designs and

slogans. However, it may also face competition from other niche brands and online platforms

that offer similar products. Global Data. (2023)

Customer Environment

Splash targets men, women, and teens with its product and service offering. It also caters

to different tastes and preferences of its customers by offering a variety of styles, colors, and

sizes. Splash has a loyal customer base in the UAE, as it has been operating in the market for a

long time and has established a strong brand image. Forecast Clothing, on the other hand, may

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need to understand the evolving preferences and purchasing behavior of consumers in the UAE

to effectively cater to their target audience. Forecast Clothing may appeal to customers who are

looking for unique and trendy T-shirts, but it may also need to consider the cultural and social

factors that influence the clothing choices of consumers in the UAE. Global Data. (2023)

Splash has a strong presence in the UAE market with its aggressive marketing strategies

and a focus on diverse customer segments. If Forecast Clothing launches its T-shirts in the UAE,

it should consider the competitive landscape, market size, and customer preferences to position

itself effectively and compete with established players like Splash. Global Data. (2023)

Rules and regulations

Expanding your clothing brand in the UAE involves understanding and complying with a

number of rules and regulations. Here is a detailed analysis:

Location Selection

The UAE offers two types of locations for your business: Mainland or Free Zone.

Mainland businesses are overseen by the Department of Economic Development (DED), while

Free Zones are operated independently by their own regulatory groups. Each has its own rules

and benefits, so you should examine each carefully to decide which is best for your clothing

business. James Elliot-Square (2022, April 5)

Company Name Registration

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Once you have chosen a location, you need to register your company name. This process

is granted by the DED or free zone, depending on the jurisdiction in which your company is

incorporated. Business names are strictly regulated in the UAE. You must be very careful not to

use any words or references that could be considered offensive including profanity, sexual

obscenities, or references to Allah.

Legal Structure

Determine the suitable legal structure for your online clothing business, such as a

Mainland or Free Zone company. Understand the regulations, ownership requirements, and

business activities associated with each jurisdiction type. Pro Partner Group.

Trade License

If you want to set up a clothing business in Dubai, you will need to obtain a Dubai trade

license. There is no need for any additional licenses or permits, which is a plus point. Business

Setup Consultant (2023, November 10)

Market Research

Conduct in-depth research to understand the clothing market business. This will help you

understand everything the business entails and devise means of how to beat your competitors.

Collaboration with Manufacturers

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Consider partnering with other clothing manufacturers to get reliable products. When

selecting a manufacturer, consider factors such as the cost of the products, quality, and

trustworthiness. Dubai Business Setup.

Intellectual Property Protection

Before registration of the trademark, run a comprehensive search that covers all federal

trademark registrations, business names, domain names, social media accounts, and websites to

define if there is someone already in the market using a similar mark or who could raise their

rights against you.

Cost of Starting a Fashion Brand

The cost of starting a fashion brand in the UAE can vary depending on the location of

your premises, materials, staff numbers, and much more. The cost of your trade license, of

course, which you can expect to be in the region of AED 18,000 to AED 30,000.

Company Formation Specialist

It's important to note that the application process is only straightforward if your license

application is complete at the time of submission and free from errors. To help you ensure that

this is the case, it's a good idea to work with a company formation specialist such as Business

Incorporation Zone (BIZ) when establishing a new company in the UAE. Luminita (2020,

November 15)

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