Being the topic that it is, asking someone how they are doing or how their business is doing gets you varying answers from ‘people are loosing jobs’ to the ‘economy is in tatters’ and a few ‘Alhumdolillahs’ here and there. What does anyone know about the economy anyway? We’re not economists.
The question often answered is not how they are doing, it’s how they were doing in the early 2000s or 2010s in Dubai versus how things are today some nineteen years later. Today UAE’s economy is gigantic, it’s more stable, it’s been growing and it’s up for takes. The only problem is, there’s been steady growth, modest changes and little tweaks here and there. There’s no oncoming boom for speculative markets or ideas. There’s no way you can become a multi-millionaire over night. There’s no returns like before. It’s still vibrant, livable, lovable, a fresh of breath air when compared to back home.
Wherever back home is.
If you’re a small business owner like me, you may want to, from time to time evaluate the actual course of the economy at a more natural level as compared to studying or trying to study macro-economic indicators, which to us poor souls mean too less at the micro level. So here are some micro-level indicators with my observations on how the UAE economy is actually doing:
Observe McDonald’s pricing. They’re unreasonable at the moment. McDonald’s have been promoting various price focused deals from 2018. Some of them were good from a price-point perspective.
My take: They’re cashing in on their loyal customers. They want you through their door rather than someone else’s. They’re shy of repricing their cash-cow products to lower prices. Bundling is the way they’re going at the moment.
Observe Billboards. One out of three advertises an ‘advertise here.’ Most adverts are for multi-billion dollar brands. Other advertisers are too few or advertise too little.
My take: Empty billboards tell a story. There aren’t many takers for that expensive ad space. There’s an air of caution. There’s not much to say at the moment.
Observe what the Hypermarkets are doing. Most are ‘hyperer’ today than ever. They’ve got an offer or two on great products in every major category that undercuts pricing of all other brands in that category.
My take: You can live way cheaper if you simply drove around the city and chose well. Most offers aren’t from unknown brands. There are excellent offers from some of the top brands in the market. You’ve got to know what you buy, at how much you have bought previously and how much they cost today. It’s excellent.
Observe how frequently top-brands are Bombarding you with SMS messages and what’s being said. There’s an onslaught of SMS messages right now. Some of them are silly.
My take: First you can block SMS spam, so do that. Second, ‘frequency’ is the question here. The desperation that you sense behind it. It’s the same old product or service, the frequency of messages makes you want to believe it’s time-bound. It’s not. Is it desperation? To some extent it is.
Observe car dealerships. Car prices are almost where they were last year, where they were the year before, where they’ve been for some years. Service centers have reasonable offers on service (at discounts), extended warranties and accessories. You can ‘buy today and pay next year’ or make your ‘summer dreams’ come true.
My take: Most people are buying the right cars today when compared to yesteryears. The right car would last you way too long, just way too long. So you’ve got great offers at your table if you’re in the market for a new car. Add to that, if you live in Dubai, you really don’t want to buy a new car. You can use the metro or hire Uber, it’s just that simple (and cheaper if you do it right). New utility car? Meh.
Observe big spenders. Public or private, they’re spending modestly. There’s a sense of planning, an ongoing effort to enable lower-costs and ‘keeping’ customers is more important today, than before.
My take: This is the best time to setup business in the UAE if you really, well like me, understand to some extent what’s going on. Some of our costs at home and business have been lower this year. If you track this kind of a thing, it’s fantastic. We’ve got lower bills, renewed products and services and an ease-down on fees. It’s easier and it’s attractive.
Observe your customers. Our customers haven’t shut-down. Some of them are experiencing slower than usual cash-flows and everyone does, every summer. All of them pleasantly renew our services at the same rates (we revise prices every three years). Some have ordered new accounts this summer. Some idea/concept based customers have cancelled some services or altogether gone out of business.
My take: The economy is holding up. There’s enough business out there. If your customers are experiencing a slow-down, adjust your costs, get rid of debt, focus on acquiring new customers and stay put. Have you wondered being in the UAE, you can sell to the world? Do that, just don’t give in, not yet.
Observe your vendors. Utility companies are at it to get their money. You’ve got 2-4 weeks to pay up, that’s it. Businesses are flexible with payments ever more than before. You can negotiate lower fees for services you buy at good readjustments. It’s a more welcome ‘today’.
My take: Your vendors may be willing to give you a one-time, one-off, just-this-year discount that can help. Even a modest discount of 10% is great. Just be truthful to them about your situation and remember, they’re facing the same issues you may face, so be humble. As for large businesses or vendors like Utility companies or Amazon Web Services or Google, you can still lower your costs.
Observe yourself. Are you consumed by the fear of having to pay VAT on every nominal transaction you make? Are you consumed by the fear of days when corporate tax will be a reality? Are you afraid that you may loose your job? Are you living a lifestyle that’s not in line with your income? Are you dreaming dreams of a time well gone away?
My take: If you’ve lived in the UAE for longer than you can remember, or would have to calculate (2019-1996=23 years) your economy has been good. There are ups and downs, there are times you love and times you want to forget, yet there is always time to rethink, rewind, recuperate, recover, readjust, replenish, rediscover, rebound, retrench, reinvigorate, refine, redo… reconquer.
The only question is, are you willing to bite at the steak of the economy?