Following our most recent blog featuring a Q&A from Little Farms Singapore, today we’re turning our attention to the next market of interest: the GCC. 

In August, we were lucky enough to work alongside the South Australia Department of State Development, FoodSA and Global Victoria to host buyers from Lulu Hypermarket Kuwait, Qatar and the UAE, and pick their brains on the exciting trends in the GCC’s food and beverage space. In this blog, we’ll share the key takeaways from our Q&A with the Lulu Hypermarket buyers to find the major areas of opportunity in the GCC.

About the Buyer: Lulu Hypermarket

Lulu Hypermarket, the retail division of the multidimensional and multinational Lulu Group International, is one of the GCC’s leading retail chains. Today, Lulu has grown to over 260+ retail stores across the UAE, Saudi Arabia, Qatar, Kuwait and other global markets. Across its vast hypermarket network, the company sells grocery items, fresh food, electronics, homewares and more, offering a large range of both imported and local products.

Q&A Session Insights

Question 1: At a general economic level across the GCC, what’s it like right now in terms of growth prospects?

When we look at the GCC, we believe that over the next ten years, Saudi Arabia will experience strong growth, much like Dubai has already seen – the UAE has already seen significant investment and growth. As a retailer, we’ve grown significantly faster than other retailers in the Middle East market, and our facilities and our expansion means that we already have 270 outlets. So all in all, the market is very good, we’re growing, and expecting more retail business in the GCC in years to come.

Question 2: What is the Kuwait market like for imported products?

We import a lot of items from around the world for our Kuwait customers. Kuwaitis love to travel and because of that, are exposed to lots of products from around the world. We’ll often get inquiries about whether we can source a product that customers found on their trips, and some customers even send us a photo of the product that they’d like to buy. So we have facilities in the US, UK, now Australia and in fact across 24 countries, and when we have such an inquiry, we send the photos to our sourcing teams in those countries and within two or three days, we can arrange the delivery of those products to our stores and get them on the shelves for customers.

Question 3: Is eCommerce an important channel for Lulu grocery lines?

E-commerce is growing for Lulu Hypermarket. We have our own e-commerce platform, and we also have relationships with third-party platforms like Amazon to deliver products to consumers. So if someone goes to the Amazon website, they can see the products available at Lulu. The same goes for apps and sites like Talabat, which offer faster delivery of Lulu products. If a consumer uses Talabat, once they place an order, within 30 minutes it will be delivered to their door. 

Question 4: Can you share the different ways that you source products?

At Lulu, we list products in three ways.

1. Distributor: The first is through an in-market distributor. They will take care of the sales and logistics. In the Middle East, the margins are very high because listing fees, marketing budgets and transport and logistics costs are so high. For this reason, many distributors will only bring core brands to the market, as opposed to niche products.
2. Direct import: At Lulu, we directly import products. In the FMCG category, thousands of product lines are being imported from different countries. 
3. Private label: And the third method is private label. We have our own private label for fashion, electronics, as well as food. 

Question 5: Are you looking for any specific type of categories that have the most potential in the market, or are you looking more broadly? 

We have a large retail concept with lots of products across many categories. We’re not particularly looking at any one single category–if we see a brand or product that has potential in the market in any category, we’re happy to source it. Once we’ve identified a brand or product, we’ll see whether it could work in Qatar, the UAE or all over the GCC. So essentially, we don’t have any category gaps we’re looking to fill, but we have room to get a new or exciting product into our stores to expand our offering or replace existing offerings.

That said, there are still some customers looking for some particular items, like in niche categories. So, as new trends come along, we may look more closely at certain categories. For example, we’ve recently listed more vegan and gluten free products, as well as organic products. When I come to Australia, I always spot new products as well.

Question 6: Now, there are many different brands across each category. And of course, every brand wants to stand out. How do they go about promoting in the market?

We have lots of ways to promote a brand or a product. It’s entirely up to the brand, like how they want to invest in that market.  We deliver a booklet promotion – every 11 days, we release a booklet with around one hundred products covering all categories from fresh food to non-food, health and beauty etc.

For some items, we can do sampling in-store so the customer directly gets to know the product. For example, Australian products are known for their superior quality, and consumers can see and feel this when they touch, see and taste the product in-person. This is especially important as Australian products are priced at a premium, so customers like to know what they’re paying for. 

We also have social media platforms. When we get new products in our stores, we put that on social media where we have around 2 million followers. We sometimes work with influencers on TikTok and Instagram to help us with new product announcements. 

Question 7: Do you offer up-market and gourmet brands, or do you focus more on supplying better value mainstream ones?

We have all different kinds of consumers, so we’re not just focusing on one demographic. We do classify our stores by demographic. For instance, in areas where there are lots of European expats living, we tend to promote more high-end, premium level products. We have an area in-store that we call World Food where we showcase only food from certain countries, like the UK, USA and Australia. We’re also opening up stores in locations like airports where we promote more premium products. But that said, premium is still a niche category for us.