Top 5 business models doomed to fail in Dubai

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Business models that didn’t survive revamp of  economic environment

The Top 5 businesses that are doomed to fail in Dubai, according to the Dubai Chronicle editor’s observations, may be very prosperous in other cities and countries. Unfortunately, in Dubai these business models became either very competitive or costly to run.

Reflecting the constantly changing business environment, new promising business models emerged and have been revealed in a separate article – Top 5 Small Businesses to start in Dubai.

Apparel Manufacturing

Apparel manufacturing was a very prosperous business until nearly ten years ago, with a significant number of factories producing ready made garments for exports from the UAE’ free zones. Now, it has become very expensive to set up a manufacturing unit and to keep up with the constantly rising cost of bringing in and maintaining  foreign labour.  The local market is over supplied with imports from every corner of the world. Price range is also very broad. Fresh business start-ups will not be able to carve a niche, as the competition is stiff and cost of business set up and licensing is high. Remember, Dubai is already a shopping paradise, with the highest retail space  built per capita.

Brokerage Companies

Since 2008, after the collapse of Lehman Brothers and financial markets across the world, 60% of the brokerage companies in the United Arab Emirates have closed down. Modern day stock market players are very intelligent and operate on the trading platforms solo, equipped with high-tech devices and web applications. Now you can trade stocks on the DFM through your BlackBery or iPhone and earn the money for the device while having coffee at Starbooks. Most of the major banks in UAE, such as ADCB and ENBD, have their own inter-linked brokerage companies which is a very convenient service for traders.

Photo Finishing & Print Shop

Everyone and everything goes digital. Application forms are submitted online, with scanned photos in the attachments. Think CV, school admission application, car insurance or even a health insurance card. Photo albums are also digital, with countless web applications offering state the of art editing and storing options, such as Picasa and Flickr etc. Digital photo frames are replacing the classic frames. Your tablet, android or mobile phone can store plenty of megabits memories about past great moments.

Print Media Publishing

Print media revenues are on decline worldwide since at least a decade. Year by year, giant publishers are struggling with enormous losses. Many try to fix  budgets with revenues from the online versions of their publications, which are not competitive yet. The subscription model is nearly dead and mostly advertising revenues are accountable. It is impossible to imagine what one could bring up in order to surprise readers and prompt massive buying. Most of the popular editions in Dubai are printed in between 2,000 and 5,000 copies. Suppliers are collecting the unsold magazines from retailers on a daily basis.

Grocery Store

Not so long ago an essencial part of any neighborhood, the grocery store is now a tired business model in Dubai. This is because major supermarkets chains, such as Careffour and Spinneys moved to open smaller outlets. Carrefour opened 17 small supermarkets only in 2011, along with its online shopping unit. These centrally managed, well-stocked stores are overtaking residential communities, not leaving room for smaller  individual competitors.

1 COMMENT

  1. When the higher-ups start owning small retail businesses then the businesses by private individuals start failing. From Groceries to malls all controlled and sustained on bank rolled loans that will work for temporary period only. Customers are limited for every business. It’s the sales of licenses that are important and not sales of goods really that matter to them. Hence private expat businesses are fully at risk.

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