From Navi Mumbai to New York, every immigrant society converges – different religions marry native customs, languages borrow from each other,people share values and belong, and the city becomes a melting pot. In Dubai however, there exists a series of parallel universes, meeting but not mingling, living but not belonging, inviting but not enchanting. Dipayan Baishya explored the city to find cues to develop consumer strategies for a consumer goods companies and discovered metrics that could be useful in customer segmentation in extremely diverse cities that are now evolving across the world.
Living in Dubai is like living in the Arabian night’s dream of fantasy, gold and mystique. It is a desert converted into an oasis of opportunity for millions of people from every part of the world. Here, the natives are a small minority, accounting for less than 15% of the total population. For the overwhelming rest, Dubai is a parking lot, a springboard to either live off a lifestyle they can hardly afford back home or build a large-enough monetarycorpus to take back home, that would allow them a lifestyle vastly superior to what they were born in. In the meantime, the city neither allows anyone to influence the local culture or customs, nor demands anyone to fall in line with it.
From a demographer’s perspective, Dubai throws up patterns that can be seldom seen anywhere else in the world. Only 16% of the population is women and of them half are below the age of 25 years. Viewed statistically, families are rare in this city. Almost 35% of the population is laborers while another 53% are non-labor salaried class. Another 9% are engaged in government jobs – entirely Emiratis. That leaves just 3% of people who are self-employed, indicating the high concentration of business ownership in the hands of thevery few.
There are 0.7 million laborers living in four labor camps located in the outskirts of the city. In addition there are another 46,000 households that are just made of bachelors living together, called in Dubai’s demographer’s langauge as ‘collectives’. Even though the average family size in Dubai is 4.4 members, but the data is heavily skewed due to the large size of these collectives and also because 29,000 Emirati households have on average 10.2 members each.
What the government doesn’t collect in taxes, it recovers in high transport costs accounting for 18% of the householder’s consumption budget and another 38% goes in high cost rentals in Dubai, spiraling a property boom. Spending on food and grocery is just 16.4% – lower than even developed markets standards, and of that a miniscule 0.27% or around USD 10 million is spent on baby foods – again indicating the rarity of families in the city.
Scratching the surface, one realizes this isn’t just a city or there isn’t just a government. Dubai is one vast corporation of the Sheikh.This corporation focuses purely on ports, airports, construction and real estate and does everything to fuel these businesses. Dubai is by the Sheikh, for the Sheikh, of the Sheikh. The Sheikh welcomes businesses from across the world with open arms (and minimal taxes, non-existent labor laws, superb infrastructure) as long as they use the Sheikh’s ports and airports for imports and exports and attract employees from outside the country who in turn will fuel the consumption and real estate boom in the country.
Under the benevolent gaze of the Sheikh operates the multiple universes of Dubai. For the Emiratis, it is a Santa Claus state – that provides and protects their jobs, handouts multiple subsidies and pays for social security and who in turn never question the authority of the Sheikh. For the remaining Arabs from the neighboring countries, Dubai is a quick escape from their own Sultans who forbid them from so called ‘vices’ in their homeland. For the Western Expats, Dubai provides a once in a lifetime opportunity to live off a lifestyle they can seldom afford back home. For the large and extremely entrepreneurial Iranian diaspora, Dubai is where the world meets for trade and commerce, across the strait from their homeland that has suffered decades of economic isolation. For the Pakistanis, this is the land of ‘sukoon,’ or peace and for the Filipinos, Dubai is an adult Disneyland.
For the large Indian population who account for almost half of the foreign workers, this is the city that holds the power of alchemy. It is the land of gold – both literally and figuratively. Almost everyone harbors the Hindu notion of this life and the after-life. This life – in Dubai, marked by hardwork and social isolation is going to pay rich monetary dividends for their after-life – back home in India. These self-made universes never collide. In a deeply divisive society, one’s nationality act as a caste, segregating housing communities, public transport, work spaces and environments and almost every facet of daily life. Except for one. In this giant corporation of parallel universes, it is the shopping environments – whether within the over-sized malls or airports, wherein these universes collide. The magic of commerce brings together various classes, nationalities and income-groups together. From the cheap merchandise from Dragon Mart to the most expensive luxury brands, everything finds buyers within these malls. Almost every major retailer from across the world is present within Dubai’s shopping malls. There is shopping for necessity, shopping for vanity, and most importantly, shopping for gifting to folks, friends and relatives back home that form the largest portion of discretionary consumption.
In fact, among Filipinos there is a well established practice and complementing supply chain of sending ‘balikbayan box’ – small boxes filled with non-perishable food, toiletries, household items, electronics, toys – to families back home. Amongst Indians, apart from the gold and electronics, some of the most popular products taken back home is Colgate toothpaste packs with Arabic lettering on it and Middle-east packaged Tang – inexpensive products that still clearly convey that they have folksliving abroad. As marketers we seek homogeneity, common threads and tools that help us understand consumers better. However, such peculiarities in consumption – especially in packaged consumer goods – make it difficult to adopt conventional approaches around income-groups, socio-economic groups or even family size.
The chief factor that determines life and behavior and therefore consumption inDubai turns out to be ethnicity and time commitment to the city. It is how much time in life that a consumer plans to spend in the city that often determines what he will consume for himself, his family and relatives back home.
The city’s day-time population is three million, but amongst them around one million are floating, i.e., a million people do not stay back in the city for the night – these are transit tourists, global businessmen on quick deals in and out of the city, local businessmen and workers coming in from the nearby emirates.
Among the remaining two million who live in the city, almost half have arrived only in the last five years and will be leaving the city sometime soon. Around half a million intend to stay back in the city for longer, possibly till their retirement from work. It is only the remaining half million who are either natives or permanent residents who call the city their home.
Almost all consumers in Dubai can be classified into these four buckets or what wecall – Dubai Crush, Dubai Flirts, Dubai Live Ins and Dubai Married. Understanding Dubai through this lens along with ethnicities provides one of the best ways to interpret this market, identify opportunities, explore categories and build brands in this city.
Dubai will never develop a homogenous culture – it is not supposed to by desire and design. But it will surely influence many governments and rulers replicate its success story. In fact it is already influencing the growth of many such cities within Middle East and beyond. It is estimated that by 2030, 60 percent of the world’s population will live in cities. And whether we like it or not, many of its cities will be like Dubai – composed of parallel universes that do not blend or mingle with each other. They will attract diverse communities and have their own demographic peculiarities. Building common threads for developing new businesses, branding and communication will be difficult unless we move beyond income or socio-economic segmentation and look at new ways to define and engage with customers.